- 24 Feb 2014
Is the UK Heatwave making retailers sweat?
The UK Heatwave is the driest and longest in over 30 years, but is the 32 degrees heat steering Brits away from the High Streets?
In the UK the weather is often erratic and unpredictable, it can put us in a good mood or it can put us in a bad one, especially when you get caught in the rain without an umbrella. But can the British weather really have an impact on consumer spend, or how we buy?
Previous studies have revealed there are two key factors influencing consumer spend:
- The general state of the economy
- The weather
So far, the summer heatwave has rewarded retailers who have seasonally appropriate stock. However, if unprepared for weather changes, retailers can lose millions of pounds through low stock levels, empty shelves and disappointed customers. This isn’t just with regards to stock; supply chains and logistics also need to be equipped.
As a result, seasonality must be considered to some extent, making it easier to predict trends. However, due to the volatility of the British weather, this isn’t always a reliable method. Therefore, retailers need to provide regular weather and corresponding stock predictions, made from copious amounts of data gathered about what and how people buy dependent on the weather.
An industry example would be Tesco, who have accumulated years’ worth of data with information about every product in every store, every day of the week. This allows them to accurately predict what people want, allowing them to appropriately stock their stores whilst accommodating changing weather. Their system is so specific it can even indicate the temperature at which sales of burgers will go up.
It was only several months ago we were embracing inches of snow and -14 degrees spells, but the dynamic shift in temperature has taught us a lot about how people spend at each end of the spectrum. In January, online retail sales were up 13.9% year on year. This demonstrates that during periods of cold snaps, consumers like to shop from the comfort and warmth of their own homes. However, from April to June, the figure remained stagnant, increasing footfall on the high streets.
Weather effective sales account for around 4.5% of overall sales, a number that could determine between a profit and a loss. Therefore, retailers need to embrace omnichannel retailing, providing customers with more ways to shop through innovative technology.