Retailers are beating bad weather with better analytics



It's not unusual for retailers to blame the weather when sales go south, but one of the great benefits of omnichannel is that the impact of bad weather is minimized. The storms of 2015, thus far, may have buried parts of the United States but they aren't burying retailers.

Weather analytics are nothing new; retailers have been utilizing the technology for years. But the newer technology that enables the inventory flexibility for omnichannel retailers, is going a long way toward helping those retailers mitigate the damages of wild winter weather.

"As people make incremental investments in the omnichannel journey, finding ways to better serve [the] customer, these investments put them in a much better position to shift demands when weather hits," said Scott Fenwick, senior director of product strategy, Manhattan Associates. "We saw the first signs of this last winter."

Flexible fulfillment in particular, is helping mitigate the damages of winter storms.

When one unnamed retailer in the Northeast saw foot traffic in stores drop, management called headquarters and offered to use the store for e-commerce fulfillment, said Fenwick. Associates who made it to work were able to dial up and meet the increased demand from shoppers buying from home.

"There's still no silver bullet, but we've seen some progress," Fenwick said.

Much like those who were early to invest in mobile, those already well along the path to implementing omnichannel fulfillment are weathering this winter a little better than those still evaluating and testing.

"The more forward-thinking retailers that were making investments are in a position to be flexible. They have the right tools to execute at a level of sophistication in the back office and made investments in order management to shift demand to where the inventory is," said Fenwick. "It's always an incremental process, there's something to tackle first."

The message here is that these solutions apply to more than the task at hand, as is proven by how little impact the winter's storms are having on retailers balance sheets.

January sales, which include winter storm Juno that shut down much of the East coast, were largely positive at both retailers and restaurants, according to Applied Predictive Technologies. In-store retail sales for January 2015 increased 2.8 percent compared with January 2014. Restaurant same-store sales were also strong for the month, increasing 7.4 percent] year-over-year.

"We're seeing strong sales performance in January across both retail and restaurants," noted Patrick O'Reilly, APT president and COO. "While the APT Index showed slight negative effects in areas that were hit by large storms this year, sales were strong overall."

Retail analytics company Euclid released slightly less positive results, noting in a statement that "Traffic dropped year-over-year as the shift towards online shopping accelerated and was amplified further by harsh weather across much of the country."

But even though retail visits decreased, according to Euclid, they did so at less than 1 percent even as shopping patterns shifted to online paired with the bad weather.

All this efficiency is leading to the next logical step, according to Fenwick. Namely, improved or more varied shipping options to both stores and shoppers.

"Retailers are looking for more flexibility," he said. "When a lot of our customers started to ship from stores, it was FedEx or UPS and that was it." Now that they've got the foundation in place, they are looking to reduce the process. While some may be considering same-day delivery, particularly those in more urban areas, "we're seeing customers say they want more choices and looking at new regional [shippers] and attempting optimization on the parcel execution side."