Tune into any earnings call and, at some point, you’re almost guaranteed to hear the chief executive either credit or blame cold snaps, monsoons, heatwaves or a combination thereof for how his or her company performed that quarter. Unfortunately, there’s no way to predict when these things will occur, throwing growing seasons, deliveries and shopping patterns into complete turmoil. While not every fluctuation in the weather will have the impact of Hurricane Florence, the ability to control the weather would be a huge competitive advantage.
Barring that, having foresight into how weather will affect demand for specific products can enable companies to align inventories and business resources, take advantage of opportunities or deploy strategies to mitigate risk in response to the variability of climate.
To that end, weather analytics provider and consultancy Planalytics Inc. this week announced it has partnered with The NPD Group to provide consumer-focused businesses with these valuable insights.
“Planalytics can now apply its weather impact modeling technologies to NPD’s point-of-sale data from retailers to provide companies with much-needed visibility into how a key critical external variable influences sales,” the companies said in a statement.
In addition to having the ability to plan ahead, the partnership allows businesses in weather-sensitive segments, such as apparel and footwear, to understand weather’s impact on past performance on a week-by-week basis by regions or markets.
The companies said the combined NPD data-based Weather-Driven Demand (WDD) analytics will enable retailers and consumer goods suppliers to “more clearly understand performance from a weather-adjusted viewpoint.” The analytics will provide insight into both the beneficial and detrimental effects weather has had on things like advertising and promotions.
“Working together with NPD offers an exciting opportunity to bring valuable insights to leading retail and consumer brands, many whom rely on NPD’s data assets and expertise,” said Evan Gold, executive vice president, global partnerships & alliances at Planalytics, in a statement. “These companies know that weather volatility will always play a part in their sales performance and together we allow them measure and more effectively manage this reality.”
According to Planalytics, the company “helps improve planning accuracy by accounting for weather biases embedded in sales histories, with gains of 20 percent or more typical for many weather-sensitive products.”
Antoine Verrier, vice president of corporate business development at The NPD Group, said, “Combining NPD data with weather insights will enable customers to more proactively manage weather-based sales volatility in their business and capture both top-line and bottom-line benefits as a result.”