Stormy Weather: How Retailers Can Prosper Despite Mother Nature’s Fury
Weather can have a negative impact on revenue, but it can also drive last-minute opportunities to increase sales and profitability: that is, if retailers are prepared to “seize the day.”
Weather and its impact on retail has been in the news quite a lot this winter. An article in the New York Times notes that “… the economy started the year on a softer footing as unseasonably cold weather took its toll.” Who can forget the stories of people stuck on the highways in ice storm-driven gridlock? Many retailers are expected to announce lower or flat sales due to the many storms and foul weather that hit from the U.S. to the E.U. When the highways are covered with ice and choked with abandoned vehicles, people just don’t want to take a trip to the local store, unless it is to get in a little last minute panic buying of bread and milk.
But aye, there is the rub: while the weather can have a negative impact on revenue, it can also drive opportunities such as last minute spikes in sales of everything from power generators and snow blowers to groceries. One retail chain’s store might be empty of customers, but another one in the same chain 15 miles down the road can be slammed with foot traffic due to local weather patterns. So while weather can be a huge headache, retailers who can rapidly respond to the blowing winds of change can actually increase sales and profitability. What if retailers could:
- Reduce the negative impact of weather on the sales-to-labor ratio: Customer traffic fluctuations require staffing fluctuations. What if a manager could get an instant alert from a news story mined by a technology such as IBM Watson that a store’s main access road was closed due to weather (impassable, accidents, etc.) The alert could automatically include a list of who is punched in on the sales floor and who should be sent home early or called/messaged and told not to come in. Employee morale would be improved (because really, who wants to make the harrowing drive into work only to be sent home a few minutes later) and the labor spend for the store would be reduced, with employee shifts managed in compliance with business rules such as full-time to part-time ratios.
- Increase sales through weather alert-driven presentation changes in a store or multiple stores. Small changes can make big impact in retail. Moving a SKU from an aisle to an end cap, pulling a category to the front of the store, changing a sign, etc. (Think putting windshield washer in the front, not back of the store. More on this later.)
- Leverage your web site and others’ reviews to drive sales to stores. A retailer’s website and blogs often contain reviews that have positive and negative sales impact on seasonal items. If a DIY chain has received positive reviews from customers on a new snow blower, promote that before the big storm hits. And send an alert with signage (e.g., a quote from a review) to impacted locations to have item with complementary products — gloves, hats, goggles, etc. — moved to the front of the store. Use the web to drive sales, but make sure the stores are ready with product, properly displayed, and associates are notified to help customers.
- Better response to late truck arrival. Even when things seem beyond your control, you can still respond following the right practices to make the best of a bad situation (such as a truck stuck on the highway). Instead of having unloaders waiting around for a truck that is not going to arrive, have the truck send a text message to the store. Management can send the unloaders home following the process explained in the first bulleted item above (saving the labor spend for when the truck does finally arrive) or re-task the employees to do something else.
Some of the above actions seem like “no brainers.” Of course you should move windshield fluid to the front of the convenience store after a snowstorm. But remember the high turnover in retail. What may seem like an obvious action to a seasoned store manager is not so apparent to a brand new hire. Example: just last weekend, I took my 7-year-old son skiing a day after a fresh dump of powder. But by the time I was halfway to the mountain, due to all the road grit, I was out of wiper fluid. I pulled into the local convenience store to discover a brand new employee working the store (yes, we stop there a lot and know who works at the store).
Guess where the windshield wiper fluid was? It was at a far corner of the store all lined up in tidy rows. I suggested to her that maybe she might want to move the product to the front of the store, as I was surely not going to be the only one to run out of windshield wiper fluid. The store could sell more product, and customers wouldn’t be tracking in snow and salt and making the store messy. “Oh,” she said. “That’s a good idea.” A small detail, perhaps. But in retail, companies have to “seize the day” to increase sales, even if the day’s forecast calls for lousy weather.