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Weather, Weather Everywhere

redumbrellaEvery time earnings season is upon us companies of all types and sizes are quick to blame or credit the weather for their fluctuating fortunes. Recently Wal-Mart and Wendy's have blamed weather for slumping sales. Even the British get into the act crediting sunnier weather with increased sales. This is nothing new. The phenomenon of business using weather fluctuations keeps a raft of consulting companies busy as retailers, suppliers and those in the middle look to improve their management of weather related sales fluctuations.

Perhaps a master of customer intuition, Disney monitors the weather to alter their business practices:

One thing Disney can't control is the weather - which is not to say that it doesn't scrutinize the skies over Orlando as carefully as any air traffic control center. One Central Console screen shows a radar image of the property, as well as current data about wind speed, temperature, and rainfall. Says Blackwell: "We keep an eye on the weather in case we need to cancel outdoor shows or shut down certain attractions like the Skyway," a gondola that runs between Fantasyland and Tomorrowland. "The decisionmaking is guest oriented," he goes on. "We want to keep things operating as long as we can."

Blackwell, who began his career at the Magic Kingdom as a 15-year-old balloon vendor on Main Street nearly a quarter century ago, explains that there's a merchandising consideration, too: the weather station allows the Central Console to warn the dozens of shops around the park so they can set out Mickey umbrellas and bright yellow ponchos before the first raindrop falls. As he talks, it becomes clear that the Disney "cast member" structure is a case study in the networked system. Though Blackwell's bailiwick is engineering, he takes pains to point out earnestly that "shelf space is very valuable - it wouldn't make sense to have rain gear out on a sunny day."[link]


Weather impacts sales of a broad range of products not just rain gear or sunscreen. Even doughnut sales fluctuate based on the weather. From an interview with Jim Keyes the CEO of Seven Eleven
Keyes: You know, that is a great example because in the old days we had a very difficult time knowing how many doughnuts to order. Doughnuts sales will actually differ based on the weather: A rainy day, a sunny day, hot temperatures, cold temperatures... these will affect the sale of even a chocolate-glazed doughnut versus a regular-glazed doughnut or a cream-filled doughnut.

Interviewer: I guess that makes sense.

Keyes: It really does. It is interesting to see those changes. We could never stay in stock because it was always a guess. Now, when making tomorrow's order, we can look at 8-10 days of actual sales data and compare the weather pattern on those to the sales data. Then we actually forecast tomorrow's weather for the store. When the managers are making tomorrow's order, they are placing that order with knowledge about previous sales patterns and the external factors that could affect tomorrow's sales. It helps us stay in stock and it helps us reduce the write-offs. The bottom line is the shareholder benefits and the customer benefits from this use of technology. [link]

Keeping an eye on the sky over your business is part of developing your customer intuition. Knowing what products, service and experiences sell seasonally and in good or bad weather is crucial not just for retailers but for B2B organizations as well. If you are in supply chain logistics or marketing you need to know how weather impacts your customers. Not just what weather does to your sales but how it impacts the lives of your customers.

Before you call that customer or prospect take a few seconds to drop their zipcode into a search box at Weather.com and find out what the weather is like where they are. Make mention of it in your conversation. It's a small thing but it can really help build your customer relationship.

July 2, 2004 in award winning newsletter, Blog Outsourcing, build credibility, Web/Tech | Permalink

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