Jim N R Dale says it’s time to get weather-savvy
We live in strange and often disturbing times as far as weather and the climate are concerned. Unchecked wildfires, devastating floods, catastrophic droughts, unprecedented heat and uncommon freezes have all come to the global fore in the past few years. It doesn’t take a climate scientist to see that there could be plenty more weather horrors lurking on the horizon. The weather – and the patterns of weather seen over time, which we call the climate – is, in many ways, the most important aspect shaping our daily lives. It is the driver of our health, our wealth, and the ways in which we live: it can be our closest friend and our fiercest foe. It’s as true for businesses and their financial performance as for individuals.
If you think I’m overstating the weather’s influence, then do a little test for yourself the next time you open the blinds or curtains in the morning. Take in the weather and ask yourself: “How do I feel?” For most of us, a blue sky and sunshine make us feel very different than we do when confronted by grey skies, high winds, fog, or dismal rain. And feelings are everything, because – outside of constraints like office hours – they will shape what you do in your day, what you might purchase and what you might consume. If it’s having an impact upon you, then it will be the same for your neighbour and what they might consume.
That makes the weather a business issue and a financial one. A better understanding of the relationship between the weather and business could help many leaders to unlock major opportunities for growth.
Feel the pulse and capture the moment
In today’s data-rich world, businesses have extensive data at their fingertips: financial metrics, customer metrics and performance metrics of all sorts. But how many have good data on how their business fares when the weather changes?
Leaders need to ‘feel the pulse and capture the moment’. Understanding the impact of weather will allow organizations to stay ahead of the game and how any given shifts might play out in terms of, for example, consumer behaviour and customer demand. The more extreme a weather event, the greater the likelihood of massive spikes or dips in a whole host of products and services – but weather impacts don’t have to be extreme in order for businesses to see significant shifts in buying trends. Effects can be small and still have a day-to-day measurable impact on bottom lines and business fortunes.
When it comes to the weather, there’s a vital step to take before looking at what’s coming next, and that is to measure what has been. To know how the weather impacts upon a certain product or service, measure the impacts against known weather elements over time – daily, weekly or monthly. These records can be pure gold when looking ahead.
A good example of this in action was when we measured the sales of a certain brand of ice-cream tubs during a summer period. The expectation was that hot sunny weather would result in a peak of sales and wet weather would do the opposite. Wrong! The rainy days were the days when sales boomed: not because we enjoy eating ice-cream tubs in the rain, but because when it rains in summer, we tend to park ourselves in front of the TV or cinema screen in large numbers. Tubs of ice-cream suddenly come into fashion – compensation, perhaps, for the sun having disappeared. For different sectors, understanding how demand for certain products and services ebbs and flows during particular types of weather can be eye-opening. Building an accurate picture requires that you put clear measures in place.
Establish your weather-sensitivity
Once you have enlightened yourself, let those who you might wish to be your customers know about it. Shout it from the rooftops: establish your weather-sensitivity in order to engage. Of course, make sure that you are using quality, forward-looking feeds for your weather forecasting, from a reputable service.
Although times of extreme weather will tend to stick out like a sore thumb – whether for good or bad – every nuance of weather has a measurable impact on demand and the potential sales of just about everything. Every level of sunshine, rainfall, snowfall, wind, temperature and humidity have a direct influence on our minds and our bodies, our wants and our wishes. My advice? Plug into those nuances, understand them and play them for all you are worth.
Huge financial rewards are blowing in the wind. All sorts of organizations can boost their business by better understanding the nuances of the ways in which weather shapes human behaviour. From our health and wellbeing, to sports performance and betting outcomes, to all types of retailing, marketing, financial trading and even how to win military battles, the weather’s influence is incredibly powerful. Do not underestimate its influence on what is all around you every day. Some people will use the weather as a convenient excuse for problems in their organizations, when they have done nothing to mitigate potential weather-led losses. For others, the weather is an opportunity for gaining competitive advantage. It’s time to check the forecast.