How can retailers use weather data to optimize retail operations?

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What does a heatwave or a spike in temperature mean? Well, for us, it usually means we have to change our social plans – but have you wondered what it means for retail businesses?

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It can have a completely different meaning depending on their business models, products, and sectors. For some, it could mean more people frequenting their stores to buy cooling items like air conditioners, fans, etc. For others, it may mean decreased footfall due to people avoiding the heat.

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Unpredictable weather affects 35% of the GDP in industrialized countries, making it essential for retailers to factor in weather while making important business decisions like forecasting demand using Ambee's data, maintaining inventory levels, and making decisions regarding workforce requirements.

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By incorporating weather data into their decision-making process, retailers can be better equipped to mitigate any risks posed by changing weather patterns.

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Now that you have understood the significance of retail weather analytics and how weather affects sales, let's see how retailers can use this data to their benefit.

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How can retailers use weather data to their advantage?

‍Demand forecasting

As the weather fluctuates, so do the demands of your consumers. From choosing the clothes we wear to the food we eat, the weather can be a deciding factor in what we buy and when.

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During the colder months, consumers demand products that provide warmth and comfort. And that’s why the global electric blankets market is booming.

However, retailers can struggle to meet the demand of their customers during times of weather fluctuation. But this doesn’t have to be the case. By utilizing weather data analytics, retailers can stock the right product for the right customer in the right place at the right time, satisfying the needs of customers in every season, no matter how the weather might change.

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Planning inventory

‍Retailers can use weather data to ensure they don't keep too much or too little inventory. If severe rainfall is predicted in certain regions. To prepare, it is wise to adjust inventory levels for products such as tea, raincoats, and umbrellas so there is enough to serve demand, yet not too much to cause excess inventory.

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Targeted marketing campaigns

Retailers can maximize the efficacy of their marketing campaigns by utilizing the power of weather-driven personalization. Weather ads can be created to target consumers based on their current weather conditions, as well as predicted weather in the near future. Thereby allowing for the most relevant content to reach the right audience.

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For instance, imagine you saw an ad being showcased for sunscreens when it's sunny and hot outdoors. A few hours later, the ad changes to umbrellas when the clouds cover the sun.

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This blending of location and weather data will equip retail businesses to create a more targeted advertising strategy, thereby lessening costs and enhancing the return on advertising spend (ROAS).

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Now, you can also run these automated weather ads using Zapier.

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Minimizing Markdowns

Retailers are always looking for ways to minimize markdowns, and understanding weather data is one way they can go about it. Weather data can help retailers make more informed decisions in forecasting consumer demand for different products. For example, if retailers know that there is going to be a hot summer, they can adjust their production of beachwear accordingly.

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By understanding how weather impacts consumer demand, retailers can also better predict where and how to allocate their inventory across different channels. With better predictions, retailers can create a more efficient and profitable approach when it comes to markdowns.

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Optimizing Logistics

Isn't it the worst when extreme weather kicks in and disrupts our product transport plans? Snow, ice, and rain can all make it totally impossible to transport goods. Even if you can manage to make it down the road, the traffic can be a total nightmare because of the adverse weather conditions.

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Understood that weather data can give retailers a valuable upper hand? 

Great! Now that you know this, finding the right source to get accurate weather data is even more important.

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Here comes Ambee’s Weather API - 

Ambee provides the most reliable and up-to-date weather API to help you make the right decisions for every season. By leveraging Ambee's weather insights, retailers can make swift and savvy decisions to optimize retail operations.

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Have a question? Connect with an Ambee expert to know how weather data can help your retail business.