How weather affects retail sales?

This is a no brainer – weather definitely has its own impact on retail sales. The substantial question is to which extent. This blog post is based on our own analytical insights extracted out of a project we developed and implemented for a chain of pastry shops in Europe.

Our example is giving deep insights on how day-to-day weather change affect daily revenues for a particular retail location. Careful examination of a representative sample of pastry shops shows clearly that the revenues of such kind of retail business may change up to 40% on a day-to-day basis. No doubt, this is big!

Digging within data gave us following correlation between weather change and retail sales. 1oC is equal to 1% sales impact for the bakery and pastry retail businesses we have evaluated. Have in mind that such correlation exists only when outside is cold and the temperatures are below 0oC.

3. Andrew Hogue is currently VP Engineering at Blue Apron. Former Foursquare and Google engineer.

Interestingly enough, when the temperature climbs so are sales and this correlation is stronger in weekends. When the outside average temperature climbs up to 0oC, there is a flat line in sales. Keep in mind that the abovementioned findings are valid for a specific geographical region. On different markets, the values will be different too as well as the correlations.

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Is it just average daily outside temperature which we have to perceive as the main indicator? Not at all. We have to keep the wind in mind as well as the rain amount, humidity. Weather extremities like hurricanes, snowstorms are an entirely different story since they have a huge impact on retailers of any kind.

At A4E we developed a tool for retailers aligning weather and sales by data analytics driven forecasting. Get your free trial at a4RetailStores.

At A4E we developed a tool for retailers aligning weather and sales by data analytics driven forecasting. Get your free trial at a4RetailStores.

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