Relationship in Retail Between Environment & Demand

How Customer Behavior is Affected by Changes in Weather

Much like the flowers that bloom in spring to the bears that hibernate in the winter, the behaviour of humankind differs greatly based on the state of the environment around it.

Human bodies are incredibly sensitive to changes that occur in the atmosphere, and sudden shifts in climate, temperature or light levels can have a huge impact on the customer’s in-store behavior and buying decisions.

By combining Geospatial Data & AI with information drawn from in-store IoT devices, Fract allows retailers to identify how consumers of a particular brand (Ideal Customer Profile, ICP) react to changes in weather.

Moreover, if they do react in a particular way, Fract informs retailers how they can use this information to increase sales of particular products to particular demographics.

Retail’s Weather Problem

Retailers traditionally approach shifting weather patterns by developing strategies that align with the seasons based on month-by-month weather forecasts and averages.

However, long-term forecast and aggregate assumptions fail to provide retailers with the real-time, granular information needed to use dynamic pricing models and build accurate demand forecasts.

Fract enables these businesses to access hyper-local, street-level weather data combined with real-time nowcasting so they can make regular, actionable business decisions that affect the bottom line every day. This way, sudden changes in weather can be used to improve customer experience and sales rates rather than hinder them.

Proactive Weather-Based Strategic Planning

As well as having a huge impact on customer behaviour and desires, weather can also change how people choose to shop for particular products and services. For this reason, accurate forecasts are essential for managing supply and pricing across all retail formats.

As well as being affected by the changes in external weather, customer behaviour is also heavily influenced by the following internal weather factors:

  1. the temperature of each department
  2. the way each sector of the store is lit
  3. the level of humidity in the air
  4. a number of other contributing factors

This internal climate plays an important part in shaping the decision of the buyer and, more often than not, works in unison with the climate outside. 

Read More on How to increase retail sales bridging IoT, Geospatial and AI

Real Life Example

If it is a hot day and the customer gets a sudden craving for an ice-cold can of Coca-Cola to cool down their body temperature, they are going to enter a store specifically with that intention. However, if the air conditioning is cranked up to the max and they are blasted with cold air as soon as they walk through the door, that desire for a cold beverage is going to quickly fade.

The key, then, is to find a way to balance the external and internal weather climates so that they work in unison to help the store achieve better sales, better customer satisfaction, and ensure that no opportunity to improve success rates is ever missed.

Fract Solution

Fract offers a cutting-edge solution that allows store owners to accurately forecast weather changes in real-time. It also identifies how the consumers of specific brands/products (Ideal Customer Profile, ICP) react to changes in weather and informs retailers about the best way to maximize sales in that context.

To do this, Fract:

  1. analyzes the geospatial patterns of the stores and areas around them to create clusters of stores based on a specific set of significant parameters i.e. how many children are in living in the area, or the age of a store etc. 
  2. Fract is then builds "similar store" clusters which are used to analyze how stores behave within those groups.
  3. Fract collates and analyzes this data to make assumptions on whether or not the weather affects customers in one store within a cluster differently from another cluster.

Fract AI is then able to figure out if changes in sales patterns are related to weather, or if they were simply related to another event that happened nearby i.e. a new competitor promotion in the area.

In summary, the more data Fract has across the brand, the more confidence they have in delivering reliable, actionable insights that retailers can use to drastically improve the performance of their business on multiple levels.