Over recent years, financial trading data highlights weather as a variable that affects revenue. However research undertaken by the Met Office reveals a third of retailers still do not use any weather data in their supply chains and less than a quarter rely purely on free weather services.
Almost half of retailers and suppliers do however acknowledge weather as one of the main three external factors which drives consumer demand. The Met Office looked at those who are currently using paid-for commercial weather services, and found that 62% reported they are able to offer better customer service, 57% highlighted better sales forecast accuracy, 51% offered better on-shelf availability and 43% had reduced waste. These are all key priorities for supply chains.
More and more retailers are finding that forecasting shopping behaviour has become harder, although there is a clear desire from supply chains to use weather forecasts more broadly within their businesses, particularly to drive commercial benefits – for example through forecasting footfall and online traffic, and planning marketing campaigns.
“What stood out for us was how few organisations currently use weather data in their planning,” said Barbara Napiorkowska-Dickson, Met Office Retail Business Manager. “Incorporating weather forecasts in their operations is a significant opportunity for them to improve demand planning across the whole supply chain and better understand customer purchasing behaviour. While many may believe that their product portfolio is not weather sensitive, operationally the weather will always have an impact on their logistics and commercial activities.”
The influence of weather events on shopper behaviour should not be underestimated. Here are real opportunities for retailers and suppliers to help predict product demand accurately, which is the most important function to get right in the supply chain in order to deliver the primary goals of product availability, low inventory and low costs.
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