21 Aug 2014
Weather and eCommerce: How Weather Impacts Retail Website Traffic and Online Sales
It has long been common knowledge amongst retailers that the weather has a pronounced effect on sales. Both seasonal changes, as well as daily and weekly fluctuations in weather shape demand for consumer goods and services. These fluctuations not only shape what products are being sold – but also the sales channels used to make the purchase. For bricks and mortar retailers, fine weather promotes business – more people are out on the high street, which in turn translates into elevated sales.
But what effect does the weather have on virtual stores? With most retailers having an online presence, an understanding of the effect that weather has on eCommerce website traffic and conversions is key to forming a successful digital marketing strategy. Once retailers have a basic understanding of how weather affects their online and offline sales, they can deploy weather responsive advertising to capitalize on weather-driven trends.
This Google Trends chart shows the UK online search volume for 4 weather sensitive products. It highlights both the seasonal trends (BBQ’s and sunglasses in the summer, Coats and gloves in winter) as well as weekly fluctuations as a result of shifting weather patterns.
Effects of Weather on E-Retail Traffic, Sales, and Revenue
Last year Tradedoubler released data showing that during periods of sunny weather, online sales decreased. They reasoned that when the weather is nice, consumers are more likely to be outdoors, and less likely to shop online. The graph below shows the inverse relationship between sunshine hours and online sales. However, the data does not state what verticals they examined, or what locations the traffic was coming from.
What this graph doesn’t account for is sales of hot weather products such as BBQ’s and sunglasses – which will of course increase proportionatly with sunshine hours. However, what this data shows is that on the whole, for online retailers pleasant weather will result in a significant loss of business to high street stores. If a store has both a physical and a virtual presence, then overall revenue will not suffer – one channel compensates for the other. However, if a retailer operates solely online – as many do, (Amazon, Asos, Boohoo.com) then their profits will be affected.
More recently, the Japanese e-commerce company Rakuten, analysed temperature and precipitation levels in order to understand the effect weather had on online sales in France. The study focused on 3 cities - Paris, Lyon and Marseille.
Rakuten saw a huge sales and revenue uplift during rainy days from Lyon and Marseille based traffic, with a much more modest lift for Paris. This data illustrates that online traffic and conversions increase during periods of inclement weather – but that the extent by which they do so is dependent on location.
In this instance, we can surmise that Parisian customers are more accustomed to shopping in-store despite the level of precipitation (since they are more used to inclement weather). Customers in Lyon and Marseille - where the climate is better - are perhaps less tolerant of rain, and so choose to stay indoors on rainy days and shop online rather than in-store.
Rakuten also studied the effect that temperature had on their website revenue. The results were more nuanced this time. As the mercury dropped, the general trend was that an increased number of consumers stayed indoors to shop online. However, each city reacted slightly differently to temperature elevation vis-a-vis their purchase behaviour. This data again suggests that the impact of weather on on-line sales is geo-specific, and dependent on the weather patterns usually experienced within these locations, as well as attitudes and culture of those consumers. By doing location specific analysis such as this, marketers can then leverage these insights by running weather based advertising campaigns, automatically upweighing bids to boost their paid search presence when weather driven demand is highest.
The notion that inclement weather is generally a boon for eCommerce website is corroborated by an experiment conducted in Seattle by Mariah Walton of the RichRelevance Analytics Team. The experiment looked at the effect of cloud cover on the sales performance of online retailers across 4 different verticals (Home/Furniture, Wholesale, Clothing, and Big Box). The findings were striking – There was an average order increase of 10-12 percentage points for Home & furniture, Wholesale, and Clothing e-tailers. Interestingly, there was a far less significant relationship for Big Box retailers – around 3-5 percentage points. Further tests to establish the link between temperature, precipitation, and online shopping came to the same conclusion – consumers shop online more when the temperature is colder and when it’s raining – and prefer to shop offline when it’s warm and the sun is out.
This relationship between weather and online retail sales was backed by e-retail industry body IMRG. In March 2014, they reported an 18% annual increase in e-retail (equating to £7.2bn) in the UK as a result of severe wet weather in February which significantly reduced high street sales.
Weather-Based Marketing Strategy for online retailers and eCommerce websites
So what does all this mean for an E-Retailer’s online marketing strategy? First and foremost these findings demonstrate the importance of utilising weather data for contextual, real-time marketing and promotions. eCommerce businesses need to make the most of favourable spells of weather when they would expect to see a traffic and sales lift, by factoring this into their PPC and SEM bidding strategy. Digital marketing managers should up-weigh their PPC campaign bids to ensure that they Maximilian their brand exposure and online conversions during periods of opportune weather.
Likewise, through real-time weather-responsive marketing, e-tailers can leverage forecast information to anticipate periods of hot weather, reaching out to their audience to advise them to stock up on key products online before the weather arrives. By targeting consumers with relevant deals and promotions beforehand, online retailers can mitigating the negative impact good weather can have on their online sales, before it even hits them.
Key Points to Take Away
These findings show that there is a general correlation between weather and online shopping habits. However, location of visitors, seasonality, and vertical are also crucial factors that will come into play. For example, sales of hot weather products such as BBQ’s, garden furniture, sunglasses etc – will inevitably spike during periods of summery weather (particularly in locations where this weather is not usual). If you are an eCommerce website selling these types of products, then it's likely that warm weather will have a positive impact on your website traffic and product sales - and this should be factored into your marketing strategy.
We always recommend that retailers conduct a weather-impact analysis so they have a real understanding on how weather affects their business - whether online or offline. For more information on this, please contact us.