Weather On Retail Sales Trend

Published Date: 02 Nov 2017

Sajeed Mohammad (1010624)

University Canada West

Professor: Dr. Tongpil Min

MBA 522 – HLD and A Research proposal

Date: 20 January 2013

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Introduction

Weather is often identified as one of the factors which contribute to the customer’s preference of spending. According to the management of a Macs store in Vancouver B.C, one of the important reasons customer’s change their priorities of shopping could be the weather condition of that particular day. Therefore, it is observed in Mac`s grocery store that if there is a great need to shop a customer will sacrifice his comforts and come to the store for shopping, but if the weather becomes too uncomfortable then the customer might avoid his shopping. According to the grocery store manager of one of the reputed Mac`s stores in Vancouver BC, whether it is planning for a party, a sports event or a business event for retail enterprises like Best Buy, Wall Mart or even a small grocery store, all businesses are affected when the weather changes. For example; 2011 sales in Mac`s store were very low in the winter as it was constantly raining for 2 whole months. Currently, the Mac`s store manager plans store inventory, customer needs and store layout on the basis of assumptions about the weather conditions, but the store does not have any organized data or information on which they can make a perfect strategy. Therefore, this research to evaluate the effects of weather on sales would be beneficial to retail stores which are trying to plan sales targets and inventory more accurately than conventional forecasting.

This research will present a report to analyse weather effects on the sales trend of Mac`s retail store. Every city has its own weather conditions that retailers have to deal with. However, this kind of study is more important in a city like Vancouver where the weather changes are continuous. In a similar discussion, the Mac`s store manager has also shared his experience that ever since he has moved his retailer business to Vancouver he has to plan for the weather`s effect on the retail business in a continuous manner, but since present planning is not very accurate they need more strategic approach. How can retailers like Mac`s store plan their sales trends and forecasting according to weather? To analyse the impact of weather, we can use the monthly data sales report for each item and compare it with the Vancouver weather report. However, lagging effects might offset the original effects and there are many more factors which impact business in the retail market, so this research will attempt to determine the impacts of the weather on retail.

Weather plays an important role in sales and inventory forecasting. Store operators often struggle to understand the impacts of weather on sales. There are many internal and external aspects which affect sales of a grocery store. Internal aspects are store management, inventory management and customer service. On the other hand, the external factors are weather, events, political and economic stability. Weather conditions are one very important external factor. It has been noted that in different weather conditions consumers’ buying trends change. Products which are popular in the summer may not be very popular on a rainy day. Weather is a risk factor for business because we can only change our planning according to weather but can never change the weather itself. Retailers often talk about how adverse weather impacts their sales and/or earnings because it is changing constantly. For the purpose of this study this research is focused on weather impact on sales trend, not other aspects which are tangible to the sales trend like festivals or events; however, they are also planned mainly according to the weather.

To conduct this study, Mac`s store is a suitable choice as they are retailer daily grocery items required by people in all seasons. The goal of this research to provide a report to the Mac`s store on how weather changes could impact the sales, which could be done by evaluating weather reports vs. sales reports. In any ideal situation, the more data and more years of data the more accurate our predictions for the future will be. However, this research is limited to the data provided by the target Mac`s store. For each product we can conduct a study on what was sales trend considering weather. The reason Macs store is chosen for this research is that it is a highly organized grocery store in Canada. This store could provide a structured data which might not be possible to collect from other grocery store in Vancouver, B.C.

According to the Mac’s store publishing department, the first Mac’s store started in 1961 in Richmond Hill, Ontario. Within 11 years 375 convenience stores across Ontario were established. In 1975, the Mac’s Milk Ltd. name was changed to Mac’s Convenience Stores Ltd. Since then Mac`s store has been able to establish successful stores across Canada. According to the Mac`s Store staff members, like many other stores (7-eleven, Superstore and Wall Mart), Mac’s store is also facing a challenge to plan the inventory, bakery products and dairy products because of weather changes and rain. Sales’ planning is a big challenge for these stores. Mac’s store in particular is affected because it is open 24 hours and it has to do planning on all dimensions. Hence, primary research including manager interview could be done at a Mac’s store which would benefit them in their planning. While measuring the sales based on data collection and further weather analysis, aspects like Quantity, Quality, and timeline and cost effectiveness of overall sales would be included.

Significance of the study and research scope. The Goal, scope and intended outcomes of the project are defined and would be measured into a mixed method (qualitative and quantitative manner) so we can capture the quantitative information gathered from store data and also qualitative information based on store manager’s experience in dealing with similar issues. Strength in numbers obtained from the store data characterizes the many advantages of quantitative research and Qualitative approach is to look beyond the percentages to gain an understanding of the store managers feelings, impressions and viewpoints on this issue.

To provide Mac`s store a report on how their sales could be impacted because of weather changes,

To create an analytical and structured report for retailer Mac’s store, which could help them to understand their customer’s behavior while considering weather changes.

To make recommendations to make changes in retail and bakery planning considering weather conditions

To develop criteria for Managers and supervisors of the Mac`s store to train their staff members on various weather change's impacts on their customer’s expectations.

To create a detailed report for managers which would help them in planning their store’s hours and staffing schedule considering the store layout.

The research will provide an analysis with relevant information necessary for Mac`s store growth. This paper will help Mac`s store management to understand the current challenges of the store which they are facing in relation to weather to enable them to plan strategically. Based on the data analysis report, the Research will make recommendations on short and long-term improvements to the Mac’s store business considering the weather conditions and its impact.

In line of ethical considerations and research partner, Mac`s store would be considered as major source of data collection. The manager of Mac’s store is willing to help and support in research and has promised to engage his staff members in the research. As a few Mac’s store branches have already shown interest and other Mac’s stores are linked to them directly or indirectly, it is quite optimum in the interest of the Mac’s stores itself that this study is focused on their business needs exclusively. Hence Mac`s store staff and manager have agreed to provide unconditional support to help in this research. Direct Project Partner is Farhan Haider, working as a Store franchiser at –4464 Dunbar Street Vancouver.

Purpose of the study

The purpose of the study is to understand and evaluate the impacts of weather on the retail market with a focus on one specific on Mac’s store in Vancouver, B.C. This study will provide significant information to the store operators and planners to understand how customers normally behave when the weather patterns are changing and how this affects the sales of the store. The fluctuations and retail change patterns should be clear after reading this paper and its facts based on comprehensive primary research and a review of literature on the subject.

It would be beneficial for Mac`s store operators to understand the impact of weather on trends of sales and customer behaviour. Hence, when I presented my research plan to Mac`s store, they also showed interest in this research and agreed to provide all the required support. The present research is done with only one Mac`s store in Vancouver, but once it is approved and proven, it could be useful to other similar stores sharing same challenges of impact of weather. At this stage of research the focus of the research is only on one store. In a discussion with Macs store manager, it came up that, in city like Vancouver where store operators have to manage their inventory for seasonal changes, holidays, and city events, they have to plan their inventory based on the weather and prepare their shift timings according to that. Stores which do not consider weather conditions end up dealing with lots of waste or low sales. Therefore, the purpose of the study is to see if there is a constant impact of weather on sales trends in Mac`s store or not.

According to Mac`s store manager, Mac`s store in future would like to expand the product range and would like to know what kind of product they should market in each season. Right now they are spending marketing efforts and preparing marketing material of all sorts of products for all seasons. If they had clear statistics about what kind of product moves fast in one season and slow in another season, they would plan accordingly. This would benefit them to plan for their inventory and minimize marketing efforts. For example, in summer, Macs store would not market products like medicines which are more saleable in winter. Products which move fast on rainy days would not be marketed in the summer as well.

Mac`s store also comes up with the discount and combo packs. For example, buy one cold drink and get another one free. Sometimes they have promotional coupons for the various products. If they knew which products move slowly or fast in one particular season, then they could plan for their promotional schemes in certain way. Therefore, the purpose of the this study is to provide a clear vision to the Mac`s store on their marketing, seasonal promotions and similar challenges so they can not only benefit financially but also optimize store management.

Statement of Problem

In today’s competitive world, it is different to sustain the retail businesses like convenience store franchises. Store operators are trying to understand the trends of sales impacted by weather, holidays and external events so that they can plan the inventory in a more accurate manner. This is an issue which will remain a challenge for the coming future as well. Scholars like Ai King (2003) have concluded in their studies that many external factors are impacting the sales trend, and weather is one of the important factors.

The problem is that sales trend is fluctuating based on weather. Customer’s behavior changes according to the weather patterns, this research would provide an insight to the store operators about the impact of weather on sales. These research findings will lead to some useful

Changes in the best practices of sales planning according to weather changes. There is evidence in other retail sales trends which reflect that weather plays an important part in customer buying trends ( Lazo, Lawson & Waldman, 2011). In the same study it is concluded that Weather may impact the economy by affecting supply and demand for the sales, product requirement and necessary services of any industry including the retail industry.

One of the problems is observed by Mac`s store operators that when it rains or snows people either prefer not to shop in a grocery store are only interested in specific items. But the problem is Mac`s store operators do not know if weather impacts on the whole sales trend throughout the year or not.

Research Questions and Hypothesis

Hypotheses:

The impact of weather on retail sales trends can be measured.

Weather conditions impact the customer behavior in buying of grocery products and produce.

Retail stores can minimise inventory and returns if they consider weather effects on sales planning.

Question:

What is the impact of weather on sales trends?

Can we measure the impact of weather on sales trends at Mac`s store?

Does weather impact the overall sales trend or only a few selected items?

Does the weather impact forecasting of store inventory and planning?

Can we examine the accuracy of predicted results of the sales trend verses the inventory planning influenced by weather conditions?

Literature Review

Introduction

Literature review is an important part of research as it describes the understanding of the present researcher on the topic of the research. In this research review, the present researcher will focus on retail market trends and weather conditions in the City of Vancouver. Having the research review based on these two major topics, the present researcher will conclude the impact of weather on the retail market by comparing the information received in the literature. The aim of the literature review will be to provide insight to the readers on the topic of weather impact on retail by summarising the previous literature work. The literature will be chosen on a simple parameter that it should be aligned to the present research hypothesis and questions.

More than 30 literature article will be reviewed in this literature review out of which 20 will be academic and rest would be industrial documents. Conclusion of this research review will be drawn based on the compilation of the literature articles, methods of research concluded in those articles, and opinion of the researchers.

Importance of Customers Behaviour in the Retail Business

Customer behaviour is a key in business growth therefore it is important to understand importance of customer behaviour in retail business. According to the article called customer behaviour and its importance on management study guide (MSG, 2012); companies make investment in understanding their customers by observing their pattern of buying and market trends. This study helps companies in making their marketing strategies. The researchers of MSD studied that there is a difference between customer behavior and consumption behavior. Consumer behavior can consists of activities and processes which followed in making decisions of buying goods or service, whereas consumption behavior is focused on consuming services or units.

Customers buying process is five step activities.

First step is to collect information about the product

Evaluation of the product or its necessity

Making a purchase decision

Purchase activity takes place

Post purchase reaction where customer could be either satisfied or dissatisfied.

If customer is satisfied or happy then the customer will go through these steps again for another or same product but if customer is not satisfied he will not go further than step 2. In our research step 2 is critical because if the weather is not suitable for the customer, he will not proceed farther than step 2

Ian Geddes (2012) studied that for different retailers the solutions to deal with the challenges are different because there are different internal and external factors for each retailer. The solution for each retailer to deal with customer behaviour changes are different but three key areas are common for all retailers when they study their customer behaviour. First is to take steps to understand customer behaviour as early as possible, second is review each and every channel which affects the customer behaviour, and third is to determine the role of your consumer and then clear proposition for the store from consumer’s point of view. This study is relevant to this present research as one of the external factors of retail can be weather as studied by Murray (2010).

In the same study, Ian explained in his study that the retail business is changing because of the factors that consumer spending is being squeezed, Business costs are escalated, Technology is evolving, suitability agenda is an important factor, and competition is getting tougher. Ian concluded that customers are smarter these days because they are time poor, connected and empowered, more informed, socially connected, environmentally aware, and promiscuous. Having these tools, a customer has more power than a retailer. Therefore in present research if the weather is not considered as an external factor the retailer may face more challenges than the one which are listed above.

Shyamala Devi (2011) studied customer behavior and demands in fast moving retail industry. She analyzed that to understand customer needs, each retailer should have continuous customer feedback system either verbal, written or through online surveys. Once the feedback is received, the retailer should immediately change the strategy to provide solutions to customer’s requirements. By this cycle a retailer would be able to stay close to customer needs. She also agrees to MSG approach (MSG, 2012) of five steps to understand how and when customer can make decision on a purchasing cycle of five steps given above.

Rajkumar Sharma (2012) studied a department store which is similar to the present research department store called Macs store. Rajkumar observed that there can be different categories of the customers like salaried professionals, Business owners who come under upper class category and general type customer who are looking for items on which they can save some money. Each customer has different purchasing needs but the basic requirement of each customer is to get satisfaction from the purchasing experience, which can be modernization of the grocery store or customer service. This is again relevant to present research as the customer satisfaction is an aspect of store preparation towards dealing with weather changes.

Weather Change Patterns of the City of Vancouver

Environment Canada (2012) has been observing weather conditions in the city of Vancouver to predict future weather conditions. It has been noticed by the department of weather in the government of Canada that there is a similar pattern in the weather conditions of the City of Vancouver. Nevertheless, there is a possibility of global warming and raise of rivers like Fraser river in Vancouver city (Environment Canada, 2012) but still for the purpose of this research, it would be useful that the present researcher will read recorded historical data and published literatures on weather conditions of City of Vancouver as it will provide an understanding on how to compare the weather data with the sales data of the Macs store.

According to the study by Liz Osborn (2012) for research news and current trends, the temperature for Canada has as a whole rose by 1.4 degree Celsius. This is a trend and it is still going upwards every year. The temperature rise leads to snow melt, storms and rise in water level (currentresults.com, 2012).

Table 1. Annual Climate trends in the city of Vancouver

Temperature (°C)

J

F

M

A

M

J

J

A

S

O

N

D

Maximum

6

8

10

13

16

19

22

22

18

14

9

6

Minimum

0

1

3

5

8

11

13

13

10

6

3

1

Mean

3

5

6

9

12

15

17

17

14

10

6

4 

Precipitation

J

F

M

A

M

J

J

A

S

O

N

D

Rain (mm)

132

116

105

75

62

46

36

38

64

115

167

161

Snow (cm)

21

9

4

1

0

0

0

0

0

0

3

19

Total (mm)

150

124

109

75

62

46

36

38

64

115

170

179

Snow Cover(cm)

1

1

0

0

0

0

0

0

0

0

0

4 

Other Weather

J

F

M

A

M

J

J

A

S

O

N

D

Sunshine (h)

55

87

132

172

237

242

296

265

189

124

67

54

Rel.Humidity(%)

85

84

80

76

75

75

74

77

81

86

85

86

Wind Speed(km/h)

12

12

13

13

11

11

11

11

10

11

12

12

It is important to consider weather changes while planning for sales trends because weather impacts like snow, rain and storms could affect the customer’s choices when buying groceries; for example, during cold, customers do not buy cold drinks or ice. On the other hand, customers will buy coffee and cakes more in the winter time. Similarly, if there is heavy rain or a storm predicted on any day, the customer might not turn up in the grocery shop.

Some northern or eastern Canadian provinces could see different weather changes than British Columbia; therefore, the planning of a grocery store will vary in most of the regions. However, basic parameters to consider weather effects are the same everywhere.

Example of Daily High and Low Temperature: Figure 1 shows the temperature throughout the year. The temperature in Figure1 shows variation, which will be helpful in the final research analysis to understand how customers change their buying pattern according to the weather change.

Figure 1 – Vancouver’s weather trend - Warm and cold season

http://fs.weatherspark.com.s3.amazonaws.com/production/reports/year/000/028/404/b4a86d3b/daily_high_and_low_temperature_temperature_f.png

Figure 1 shows the daily average low (blue) and high (red) temperature with percentile bands (Weatherspark.com, 2012). From this figure it can be predicted that what cold and warm temperature of Vancouver is in a whole year`s period. Warm is actually the normal temperature when customers would go out for shopping at the grocery store; therefore, the upscale period of a retail store is the four months (May to Sept) which are more suitable than the rest of the months.

Figure 2 – Vancouver’s weather trend - Variation of precipitation observed

http://fs.weatherspark.com.s3.amazonaws.com/production/reports/year/000/028/404/b4a86d3b/probability_of_precipitation_at_some_point_in_the_day_percent_pct.png

Figure 2 shows the tendency of precipitation (Weatherspark.com, 2012). From this figure it can be predicted that November to February is four months of snow and rain, which can directly affect sales. The colored area shows the level of severity which is from the top down in this graph, with the most severe at the bottom and light rain at the top. This observation can be validated in the further part of the study while comparing the data obtained from Mac`s store.

Figure 3 – Vancouver’s weather trend - Daylight and Twilight

http://fs.weatherspark.com.s3.amazonaws.com/production/reports/year/000/028/404/b4a86d3b/daily_hours_of_daylight_and_twilight_hours_h.png

Figure 3 shows the hours of daylight and twilight of Vancouver city in a one year period. (Weatherspark.com, 2012). From this figure it can be seen that the black line shows number of hour’s sun is visible throughout the day. According to the table, the variation of daylight goes from approximately 08 hours to 16 hours. Average of this could be almost 5 hours of daylight difference, which can be impacting the sales of retail business because the customer’s preference of shopping changes according to the amount of daylight (According to the Mac`s store manager).

Importance of Weather in Retail Business

Weather is an important factor in retail business, which is why it is necessary to understand the importance of weather for this present research. Studying importance of weather will help in establishing the impact of its intensity on business performance. A study conducted by Murray (2010) on "The effect of weather on consumer spending" shows how customers behave differently when the weather conditions are changing and it eventually impacts the sales. The study of Murray has identified the major categories of effects on consumer behavior because of weather:

In a condition of extreme weather conditions for humans like cold, hot, heavy rain or storm, people normally prefer to stay at home. They don’t want to go out and shop unless it is very important.

Retailers themselves do not expect good sales and they avoid display and promotion during bad weather. Hence retailers are also aware of such effects and use weather as a cue to begin and end merchandising seasons.

The purpose of Murray`s study was to test the weather variables verses consumer spending. Murray wanted to see how weather may influence daily retail sales. In this study, he analyzed data from an independent retail store located in an American city. The store specialized in a single product line -- which is tea and products related to it. He concluded that weather plays an important part in customer buying. This information will be beneficial to the present research because one of the Mac`s store products is cold and hot drinks.

In a retail demand research (King, 2003) it is stated that retail demand is one of the most important value drivers for retail forecasting and trends. He concluded that to understand and study retail performance within a given time, it is important to understand what drives retail demand. One of the factors which often appear in the discussion among scholarly literature is weather conditions. Other aspects like economic growth and political trends also impact the sales, but on a daily basis and in almost every geographical condition of the world, retail is impacted by the weather trend.

Furniture, Electronics, food items, clothing, health and personal care, clothing accessories, sports items, books and music CD's, general merchandise and medicines are the products which are observed to be impacted by the weather. Similarly, in a trade –journal article (Gavin Management, 2012), warm winter weather boosts activity in various sectors of the economy. For example, the retail industry sees significant improvement in sales as the temperature rises. This makes sense as people who would usually be sitting on their couches avoiding the cold are actually getting out and spending money.

A report issued by (Starr, 2000) U.S. Federal Reserve Board, reported on The Effect of Weather on Retail Sales, and the report confirmed that weather which has unusual trend in a city may impact monthly sales. Starr concluded that hot / humid weather may have a strong effect of shifting demand for certain kinds of products, which eventually would impact the monthly sales. In a similar kind of analysis in the UK, (Brien and Gonzalo, 2012) it’s concluded that sales may also be hampered by rainy and wet weather.

Most of the researchers have acknowledged the fact the weather would somehow impact the sales of retail. Research may vary in that the results could be analysed by the long term and short term weather impacts. For example, some of the cities in the Asian continent and American continent are facing regular weather shifts. They are facing more rain or less rain which impacts the temperature of the city. However, this research will discuss only the short term effects of rain and snow, summer, winter, spring, and festive seasons.

In a study researcher Lazo (Lazo & Donald Waldman, 2011) raise the question of how weather variability may affect retail and the economy as a whole. It is very important to have a clear definition of weather sensitivity based on a normal accepted theory of economic that is agreeable to the objectives of business analysis. Previous researches done on the impact of the weather concludes that not only can weather affect small business and customer behaviour of buying but it can also impact a whole economy. A Research (Lazo, 2011) shows that the states of North America where the weather is changing on a frequent basis have lower economic growth than the states where the weather is more constant because people have to spend more money and resources to fight with extreme weather, which increases their overhead and expenses. This is the big picture; however, this research will focus on one single store. The conclusions, nonetheless, may apply to a variety of similar retail businesses.

Mark Leidner (2011) examined the effects of weather on retail and economy. He found that 30 percent of the gross products in domestic market are directly or indirectly impacted by weather or climate, nevertheless weather impact is location and activity specific. There are long term and short term weather impacts on business. Short term are the daily weather like heat, rain, and snow whereas long term can be hurricane and massive storms. He examined that local weather controls commodity demand and their supply. Weather conditions also interrupt supply chain and transportation.

M.D. Agnew and J.P. Palutikof (1999) studied the impacts of climate on retailing. They concluded that retail market is part of a very dynamic environment where technology, policies, social trends, marketing techniques and climate changes are the factors which shape the market. Retail industries like food, clothing, and cosmetic is directly related to weather changes whereas other retail industry like furniture and electronic products are less related to weather conditions. They studied that one summer of 1995 which was particularly hotter than previous years retail industry in UK made 24.5 million pounds to the fruit and vegetable market. Addition to that, beer and wine industries gains 122.6 million pounds in just one season because of hot weather compared to previous seasons (M.D. Agnew and J.P. Palutikof , 1999)

To understand the latest trends in retail, Jamison concluded some key facts about weather impacts on retail analytics. He concluded that aspects which can impact retail sales are social media trends, changing margins, new products, seasonality, surpluses, hot weather, day of the week, and constrains. The impact can be dual; how customers behave and how the retail companies behave. These two behaviors capitulate profit and loss in company’s annual revenue. For example if not properly managed a winter season the inventory accumulated for that season will carry forward till next year which will block the cash flow of that retail company. Knowing this kind of supply chain and retail information, allow retailers to plan their sales strategically. This is normally done by a discipline known as retail analytics. By applying this analytics retails can bring stability in their business while predicting what will happen, when it will and how? Jamison established important key performance indicators in retail analytics which are Average sales per customer transaction, sales per hour and sell through percentage of units sold. He concluded that sales profit can be increased by increasing the number of customers in retail business, decrease retail product costs, increase the mix of higher margin products to existing sales, and increase the spend of existing retail customers (Jamison Chochrek, 2012).

IDEX (International diamond exchange) conducted a research on how weather affects retail sales. In this study, The International Council of Shopping Centers (ICSC) summarizes previous research on retail and weather. In that research ICSC found that weather can affect business in three ways, direct, indirect, and timing.

Direct: There can be a direct impact on sales like snow and rain can keep the customers away from shops. But at the same time snow in holiday times can increase the customers shopping spirit and rain can increase food industry in Asian country.

Indirect: there can be indirect impact on retail sales like if there is cold weather people will not go out of the house for buying discretionary purchases but they will spend money to store food in their house and on heating systems.  

Timing: In most of the cases the sales may be delayed or moved from one location to other location but it will not be lost because of weather conditions. For example if summer is delayed or in some countries rain is delayed then customer may delay purchases related to summer or move to places where they can enjoy summer on holidays but the sales will not be entirely lost from the market. (IDEX, 2006)

In this study ICSC concludes that:

 

Weather conditions can cause delays and shifts in the timing of purchases.

Weather conditions can cause purchases to be made that otherwise they may not occur

Weather conditions can be responsible for lost of agriculture and energy production which will indirectly impact on consumer wages and demand.

Weather conditions can be responsible for dynamic of consumption cycles of customers.

Weather conditions will have long term and short term impacts on business which will influence the customer buying behavior. (IDEX, 2006)

Influence of Weather on Customers Purchasing Choices

Weather can influence customer purchasing choice in direct and indirect manner. Paul Walsh (2011) studied impact of weather on customer behaviour. In his research Paul concluded that there is a direct relation between weather and customer demand. His research is beneficial for the companies which want to help themselves in making more money or business by systematically planning for the influence of weather conditions on customer behaviour. Paul suggested that weather is a fundamental yet mostly looked as a driver of customer demand. If planned strategically, a business can get unexpected results while understanding weather impacts. Paul suggested that early a manager measures the impact of weather on his business, easier it would be to predict customer’s behaviour. For his study Paul targeted shopping malls, department store, restaurants, and clubs where he could record customer behaviour and demand getting effected by weather. Paul suggested that weather impact on customer behaviour are a factor of:

Merchandise assortment

Market geography

Demographics

Spending power

Fiscal calendar

Prior month

Addition to the above conclusions, Paul also concluded that if the weather is known in advance by studing trends or climate predictions, the shopping on special days like weekends, holidays, and special hours like morning hours can be planning in a better way by understanding customer bahaviour. (g2weather.com, 2011)

Jooa Julia Lee (2012) conducted a study on why bad weather means good productivity. She concluded that a commom belief that bad weather affect negatively on productivity is actually not completely true. Julia conducted a cognitive psychology research in the city of New York city where she observed that when the weather is bad individuals actually focus more on their work rather than going outside or thinking about finishing their work fast and go out of the office. She reviewd historical research on alternative incentives which may influence people to work productively besides perks (KC and Terwiesch, 2009; Schultz, Schoenherr, and Nembhard, 2010; Staats and Gino, 2012). One of the alternate incentive could be inability to go out of office which eventually ends up in working more productively. While working on given assignments at work, individuals generally tend to consider their personal prioritites which are unrelated to that assignment (Giambra, 1995; Killingsworth and Gilbert, 2010). However, while having a bad weather outside, people may not be able to think continuously about personal tasks as they are unable to go out. For the present research this could be understood as customer not coming to the store for buying merchendise but also Macs store employees work more productively when there is a bad weather. Julian established two hypothesis within her research:

Bad weather conditions, such as rain, snow, or low visibility, may increase an individual productivity at workplace.

Bad weather conditions may increase worker productivity by decreasing the salience of one’s personal tasks and an option of going out of workplace.

Arther Upgren (2000) explains in his book, Weather - how it works and why it matters that the weather conditions can impact the energy usage of a workplace. The workplace could be more effective or less productive if dealt with the weather conditions correctly. Arther emphasis on the long term weather impacts on a business or economy. He explains that regardless how human beings have modernize the workplace to dela with weather conditions, there would always be some challenges like snow, rain, and storms which will be difficult to deal with while managing a workplace. Companies often spend more money on the aftermath of these calamities rather than understanding them in advance. If companies plan in advance, they could manage weather condition more strategically.

Tiffany Xaychaleune (2003) studied weathers influence on travel and people’s preference of going on long term and short term travel. She gives example of the location of Walt Disney. Since Walt Disney is located in florida where the weather conditions are always pleasant, the management of Walt Disney does not have to struggeling with weather (Disney Institute, 2003). Tiffany explains that generally speaking, the effects of unpredictable weather conditions are never pleasing to people in any city, and they most certainly do not attract people to go out of their house for a long term or short term travel. Poor weather conditions detract from specific areas of focus and hinder the reputation of a location which leads to poor economy of that location. In case, a shopping mall or a shop is located in such area, it would certainly a considerable factor for them to plan for their business strategies.

Research Review Conclusion

Study of previous research on impact of weather on retail leads to conclusion that weather certainly plays an important role in customers behaviour and retail sales planning. Following are the main conclusions of present research review:

Weather can delay or shift purchase but in short term it may bring benefits to the sales.

Weather has dual impacts which are positive and negative.

Weather can impact customers buying behaviour and their choices

Retails will have to consider weather conditions while planning for sales

Companies which are planning for weather conditions strategically in advance are actually benefiting from it.

Research Review diagram

Methods and Procedures

The research method for the present study will be based on a comparative quantitative analysis of two parallel kinds of data: one is weather, and the second is retail sales data. The research procedure will be conducted in five stages to understand and evaluate the impact of weather on retail focused on Macs store.

Methodology

Stage 1: Outline research methodology. First the outline of the research methodology will be prepared to set focus on methodology. Rationale: This would provide guidance which data should be collected and from where.

Stage 02: Primary data from Store: Macs store keeps various kinds of data like marketing, Sales, employees training, inventory and store management data. In this stage I would select the relevant data for the research. Rationale: This would provide a compilation of only relevant data not all the data available.

The questions at the Stage 2 would be focused on:

What is the impact of weather on Macs store?

Rationale: To get overall picture of weather impact on Macs Store.

What area of store (Marketing, Sales, Employee management and Inventory) are affected?

Rationale: To set the focus of research on only problematic departments.

What age group, Gender and particular customer needs are mostly affected by weather?

Rationale: To set focus product range selected by particular group of people.

What could be a suitable strategy to deal with this issue?

Rationale: To understand what all efforts that have been made in past.

Stage 3: Target specific area of research. After compiling the primary data it will be possible to target the specific area where research needs to be done. Rationale: This stage will identify problematic areas of the store from the data which will be targeted for further research.

Stage 4: Compile and compare the store data with weather data. After analyzing the specific correspondence will be made with weather data. Rationale: This will provide exact impact of weather on the sales.

Stage 5: Prepare recommendations. Based on the compilation the recommendations will be prepared. Rationale: Recommendations will be given only on the problematic areas identified in stage 3, and based on that relevant recommendations can be presented to the store.

Data Collection

Data will be collected from 2 reliable sources. Weather trends data will be collected from bonafide online database and store sales data will be collected from Macs store. Both of them will be for same period of time (around one year) so they can be compared.

Reliability of Data

Reliability of data is critical for the research. Store sales data will be checked by the store manager to make sure that it is correct and accurate. Weather data will be cross checked from 2 different sources available online to make sure they are same. After having 2 sources of data the reliable weather data will be used.

Data Evaluation

After collecting all the data an analysis will be done with the combined the data to get retail trends based on weather. Those results should show us in what kind of weather the store had high or low sales in specific items.

Limitations of the Study

As this is a unique study in Mac’s store and in Vancouver it might happen that people who are tangibly aligned with this project would need a lot of basic introduction about the project in the beginning, which might increase the project timeline.

This research will only include previous data and sales trends. It will not include the future forecasted trends.

As Mac’s store is a large chain of stores spread across Vancouver, going to a different store and collecting data from them could be an issue which may constrain the outcomes of the results.

There could be some external factors such as construction, celebrations, and parties and so on which impact the sales of the selected Macs store. This research cannot include their impacts in detail.

The project is only based on Mac’s store and not providing details of any other similar store hence a bias might occur in the writing of the documents. The future strategy of the store has been always confidential and they may not be comfortable to share it with a university student hence, it would not be covered in this study.

The research data collection will not include the profit and loss reports of the store and any kind of confidential report related to the store management considering the confidentiality concern of the store.

Deliverables

A comprehensive report for Mac`s store which would help them to understand the impacts of weather on their sales trends by comparing their own data with weather records.

A report to make future strategies that will benefit Mac`s store in areas like sales planning, inventory management, bakery preparation, store cleaning schedules and store locations and choice of parking.

Analysis to understand if there is any lack of preparedness in Mac`s store for sales fluctuations based on weather change (i.e. how consumers behave under various weather conditions and how Mac`s store manage sales)

Proposed time line

Project Phase

November'12

December'12

January’13

February’13

March’13

Weeks

1

2

3

4

1

2

3

4

1

2

3

4

1

2

3

4

1

2

3

4

Project initiation and setup

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

HLD Approval

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Research review

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Data collection

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Data analysis

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Reporting and presentation

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Final revisions

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Submission

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

References

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