Temperatures soared in the UK in July and once again the clouds have made way for another burst of hot weather. Weather is often universally blamed for poor sales and low footfall figures by retailers.
John Lewis recently said hot weather hampered sales and supermarket sales hit a two-year low after a bout of wet weather. But should the weather be having such a drastic impact on sales and should it come as such a surprise to retailers? Come rain or shine, retailers should have the systems and processes in place to be able to adapt to changing conditions.
It is possible to predict demand accurately for individual products at specific stores on a daily basis, incorporating crucial external factors such as competitor pricing and weather. If high temperatures are forecast, consumers are likely to buy items such as ice cream, sun cream and other heat wave survival products. These heat wave shopping missions present an opportunity for retailers, but they need to ensure they are prepared with both the right replenishment and pricing strategies. Failing to get these two critical areas right will either leave retailers selling out of vital items and missing out on sales, or being left with too much product, leading to heavy discounting and lost margins when the mercury falls back to normal.
Our consumer survey
Last year, we conducted research into consumers’ purchasing habits for essential items during a heat wave. We asked people from across the UK how much more they would be willing to spend per item to ensure they had it during a heat wave, reviewing attitudes to the price of ice cream, sun-cream, cold drinks, BBQ food, bikinis and deodorant among others.
The survey of 2,000 UK adults found that for all items, younger generations are willing to pay more for items during a heat wave.
- Millennials are almost three times as accepting of higher prices during a heat wave – 71 per cent vs 28 per cent.
- More than 80 per cent of Millennials are happy to pay more for ice cream and cold drinks during a heat wave. 40 per cent of over 55s are still happy to pay more for these items.
It also found that:
- The nation is most accepting of paying more for ice cream, sun cream and cold drinks during a heat wave than any other items.
- To ensure they have the following items during a heatwave, Brits are, on average are willing to spend an additional:
The solution for the “weather problem”
Retailers’ ability to react in real-time to market and consumer conditions is a sink or swim issue today. Shoppers want ‘any place, any time convenience’ and during highly seasonal events such as a heat wave or wet weather, they are prepared and expect to pay marginally more for specifically related items. Retailers need to ensure they are making the most of this to help overall profitability, while also ensuring they have the right stock on the right shelves at the right time.
To do this, retailers can use internal data, and monitor external factors such as the weather, to ensure they are prepared. By combining data with powerful machine learning algorithms to predict demand, retailers can ensure they deliver the best customer experience to the consumer by providing them with the product they want and at the price they want it.
The research was conducted by Censuswide, with 2,000 respondents aged 16+ in GB between 18-23 June. The survey was conducted from a random sample of UK adults. Censuswide abide by and employ members of the Market Research Society, which is based on the ESOMAR principles.