1) A study analyzed 3 years of sales data from multiple retail clients and correlated it with weather data from major UK cities. 2) The results showed that optimal temperatures for certain products exist, and that weather events like rain or sun can significantly impact sales. 3) The study suggests that online retailers can use weather forecasts to strategically time promotions and merchandise websites based on predicted weather patterns to potentially increase sales.

1. Stop Raining on my Parade
THE SALES IMPLICATIONS OF WEATHER
David McDermott, Performance Director, 7thingsmedia
Reena Rai, Client Services Director
16th October 2012
@7thingsmedia
@A4Uexpo
#A4UIT1

2. Contents
• Session objectives
• Why the session
– Impact of weather
• The study
– Overview
– Results
• Initial insights
• Product weather patterns
• Events
• North / South
• How can we use this data?
• What can we do?
• Summary
@7thingsmedia
@A4Uexpo
#A4UIT1

3. Social media
SEO
PPC
Mobile
Lead generation
International
Display
Affiliates
LONDON | NEW YORK

4. Recent award success
Performance Marketing Awards, May 2012
• Best Agency: 7thingsmedia
The Drum Awards, May 2012
• Marketer of the Year: Chris Bishop
The DADI Awards, Nov 2012
• Shortlisted for:
- Digital Team of the Year
- Best use of PPC
- Best use of Affiliate
Marketing Industry Network, Nov 2012 “...the judges showered 7thingsmedia
with praise because of their impressive
• Shortlisted for: multichannel strategic approach and
- Best Digital Agency the strength of the agency’s
- Best Retail Strategy development within the industry.”

5. Stop Raining on my Parade
@7thingsmedia
@A4Uexpo
#A4UIT1

6. Objectives
1 Research 3 years worth of sales data across a number of clients within the retail
sector
2 Combine sales data with corresponding weather data across the UK’s major
cities
3 Find any correlations between weather patterns and sales data
Look at how accurate forecasting is within weather patterns
4
Discuss whether there is any validity at adapting online merchandising to
5 weather patterns
@7thingsmedia
@A4Uexpo
#A4UIT1

7. Weather is just the weather, right?

8. This year...
@7thingsmedia
@A4Uexpo
#A4UIT1

9. We talk of a offline correlation
@7thingsmedia
@A4Uexpo
#A4UIT1

10. But what about online?

11. The study
• 3 years worth of sales data across retail clients totalling millions
• 15 major city weather maps correlated with events (Rain, Snow, Sun, Wind etc)
• Multiple data sets correlated and trended out
@7thingsmedia
@A4Uexpo
#A4UIT1

12. Study caveats
• Researched and removed
anomalies
• Built algorithm to score data
set and to ensure that data
skews were minimised
• Data set was fashion and
predominantly ladies
clothing

13. The questions we then posed
1 How does the weather impact (positive/negative) to online sales?
2 What weather system impacts peak sales?
3 Do certain products sell better/worse at certain temperatures or events?
4 Is there a North /South divide?
@7thingsmedia
@A4Uexpo
#A4UIT1

14. The results

15. Initial insights
28th of November 2010?
Sales
Revenue
@7thingsmedia
@A4Uexpo
#A4UIT1

16. @7thingsmedia
@A4Uexpo
#A4UIT1

17. Initial insights
• Average mean temperature had
risen by 3 °C s in the 3 years
• Mean temperature across the cities
was 13 °C
• 15 °C seemed to be the lowest
frequency
• Average highest temperature was 17
°C
@7thingsmedia
@A4Uexpo
#A4UIT1

18. Initial insights
Rain
Sales
Revenue
@7thingsmedia
@A4Uexpo
#A4UIT1

19. Initial insights
• The higher the temperature rises the less we tend to buy
• Our optimal ‘buying range’ was between 16 °C to 19 °C
@7thingsmedia
@A4Uexpo
#A4UIT1

20. However...
• The higher the temperature the more we are likely to spend!
@7thingsmedia
@A4Uexpo
#A4UIT1

21. Optimal product weather patterns?

22. Optimal for casual skirts
19 °C
• But can we also workout at which weather pattern works best at which
temperature?
@7thingsmedia
@A4Uexpo
#A4UIT1

23. Optimal for jeans
11 °C and raining
@7thingsmedia
@A4Uexpo
#A4UIT1

24. Optimal for swimwear
21 °C and raining
25 °C
• 2 different optimal temperatures and weather patterns
@7thingsmedia
@A4Uexpo
#A4UIT1

25. Do events get effected?

26. Bank holidays
Easter holidays and May day:
• Sales in 2011 decreased by over 50% when the Easter Bank Holiday
temperature rose by over 140%
• The temperature then decreased 60% in 2012 which saw and increase of
over 150%!
@7thingsmedia
@A4Uexpo
#A4UIT1

27. The Royal Wedding affect..
Week after Royal Wedding:
• 2010 corresponding dates were over 120% higher with a 20% lower temperature
• 2012 corresponding dates were over 200% higher with a 15% lower temperature
• Where was the Royal bounce?
@7thingsmedia
@A4Uexpo
#A4UIT1

28. Is there a North/South divide?

29. City revenue by temperature
• Lowest comparable temperature (-4 °C ) the people in Manchester and Glasgow spent
more than London
• However, when the temperature rose by 1 °C Londoners spent more than Glasgow
and Manchester put together
• Optimal temperature for Manchester seems to be 13 °C whilst the optimal
temperature for London is 17 °C
…at - 6 °C Manchester spent more on going out dresses than they did on coats and scarfs!
@7thingsmedia
@A4Uexpo
#A4UIT1

30. How can we use this information?

31. Predicting the weather
• Accuracy for 1 to 2 days is high from 75% to 90% (MET Office)
• Once you start forecasting over 3 days the accuracy can be anywhere close to 50%
@7thingsmedia
@A4Uexpo
#A4UIT1

32. But we work in Ecommerce
• The offline world will merchandise a
shop front based on the weather
• If we know:
– What product sells at what
temperature
– In which location
– In a given set of events
– That it is 80% likely to happen
• Why do we not merchandise a
website based on the weather when
technology is there to change
instantly?
@7thingsmedia
@A4Uexpo
#A4UIT1

33. Your typical trading plan
Seasonality
Promotional Strategy
Spend in Market
Competitor Strategy
Activity React & Reflection &
Targets /
Granular measured tweak plans Learning fed
KPIs to each
Plans against where into next
channel
targets required quarter plans
Ecommerce Trading Plan
@7thingsmedia
@A4Uexpo
#A4UIT1

34. What can we do?
@7thingsmedia
@A4Uexpo
#A4UIT1

35. Weather algorithm
@7thingsmedia
@A4Uexpo
#A4UIT1

36. What can we do?
• Social communication:
– Twitter updates
– Facebook offers
• Email
– Network
– Personal
• Open trading plans based on seasonal products
• Product related incentives
@7thingsmedia
@A4Uexpo
#A4UIT1

37. So what?
Know when people will buy before they do and strategically time your advertising and
promotions to increase year-over-year sales
• 1° COLDER = +2% increase in SOUP sales
• 1° HOTTER = +1.2% increase in BEER or SOFT DRINKS sales
• 1° COLDER = +4% increase in CHILDREN’S APPAREL sales
• 1° HOTTER = +10% increase in SUN CARE products sales
• 1° COLDER = + 25% increase in MOUSE TRAP sales
• 1° HOTTER = +24% increase in AIR CONDITIONER sales
@7thingsmedia
Source: Weather Trends International
@A4Uexpo
#A4UIT1

38. Summary
1 The weather affects online sales as well as offline
2 Products have an optimal temperature and weather pattern for sales revenue
3 Temperature fluctuations can dramatically affect bank holidays
5 day forecasting is effectively 50% accurate but provides information on the
4 likely temperature and weather pattern
5 Online is perfectly placed to react and change short term digital strategies and
longer term product focuses
@7thingsmedia
@A4Uexpo
#A4UIT1

39. Thank you to: Whitepaper expected:
- Our clients
- Met Office NOV 2012
- Coremetrics, Google to receive your copy email:
- Weather Trends Int. hello@7thingsmedia.com
- Kenneth Yau, 7thingsmedia
fin.
connect:
David McDermott
Performance Director
david.mcdermott@7thingsmedia.com
www.7thingsmedia.com
@7thingsmedia
Confidential Information
This document is the property of 7thingsmedia LTD. and is strictly confidential. It contains information intended only for the person(s) and or Company to whom it is addressed.
All information contained herein will be treated as confidential material with no less care than afforded by your own company’s confidential material.
All service and product names mentioned in this document may be trademarks or registered trademarks of their respective companies and are hereby acknowledged.
Copyright © 2012 7thingsmedia LTD.