Consumer Insights

Don’t Blame Poor Sales On A Warm Winter

The 2015 holiday shopping season might go down as one that pulled retailers in more directions than ever before. The need to satisfy customers on all fronts, physical and digital, including those who chose click-and-collect for their purchases, was greater than years past. Many hailed the confluence of spending pathways as a guarantee of booming sales as it’d never been easier for customers to shop wherever and whenever they wanted.

But then Old Man Winter decided to take a few weeks off — months in some parts of the country — and the lukewarm winter that was is now taking the brunt of the blame for retail’s poor sales.

“The warmer-than-average weather continues to dampen demand for heavier winter items and has also resulted in a rash of discounting across a number of retailers, which has, in turn, driven some volume — but largely at the expense of total value,” Neil Saunders, CEO of retail research firm Conlumino, told Advertising Age.

This heavy reliance on discounts and deals to drive not only sales but foot traffic into stores during the holiday shopping season is already causing problems at pillars of the retail industry, including Macy’s, which announced more store closures last week after a blitz of in-store and online discounting the past several months. According to data from retail weather forecaster Planalytics, apparel retailers, in particular, lost a combined $421 million in sales due to the snow-melting temperatures across the country in November and December, Fortune reported.

“Not until [Dec. 23] do we show a day [in NYC] that’s colder [than in 2014], so in theory, the next two weeks are a continuation of a disastrous trend,” Bill Kirk, CEO of Weather Trends, told BuzzFeed News. “The after-Christmas sales are going to be ginormous. If you saw 50 percent off sales last year after Christmas, you might expect 75 percent off next year. It will be exponentially better because there’s so much inventory to clear.”

But now that Christmas has come and gone and winter temperatures have finally settled into many cities above the Mason-Dixon line, it’s about time to test whether it’s really fair for retailers to pin their poor sales on a little bit of rising mercury. Some of the anti-climate claims hold water. If it’s not as cold as customers thought it would be, why would they go ahead with planned purchases of cold weather items, like jackets, gloves and the like?

However, limiting weather’s influence on sales to the inverse — warm weather depresses cold weather gear sales and vice versa — is putting blinders on the issue. In fact, researchers at the National Bureau of Economic Research (NBER) pointed out in 2012 that warmer-than-usual weather can have several surprisingly positive effects on retail verticals outside of the unfortunately afflicted apparel segment. When temperatures are 20 degrees higher than the seasonal average, convertible sales increase by 8.5 percent. Similarly, bright, clear skies induce shoppers to look at lighter colored vehicles.

Warmer weather also has a subtle psychological effect on consumers that works against the myth of warm winter temperatures submarining winter sales. The NBER study found that unseasonably warm days artificially inflate people’s moods, unlike blizzards and hailstorms, and when consumers are happier, they’re more likely to indulge in larger and more frequent purchases.

In all likelihood, unseasonable temperatures and fluctuations to retail sales aren’t a zero-sum game — some combination of effects is the probably culprit. However, retailers who throw their hands up at the sky and bemoan their awful luck at being hamstrung by Mother Earth during the holiday shopping season are missing the point. While warmer weather might have adjusted the rules of selling to consumers leading up to Christmas, it wasn’t what that drove them and their dollars to other competing brands.

And, of course, why wouldn’t brick-and-mortar retailers want to deflect attention toward unseasonable weather and away from the culprit doing the most damage to their bottom lines: their online eCommerce rivals?

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