Forewarned Is Forearmed

In the fall of 2005 Clarks UK went out on a limb and purchased more boots than normal. Temperatures fell early and the cold lasted longer, and Clarks sold through every pair. How did the retailer know it was going to be a colder than usual winter? Clarks UK knew the weather was going to be more favorable for boots that winter because it had consulted its crystal ball -- the Planalytics Business Weather Intelligence system. "The decision paid big dividends and we were able to trade through March on more boots than we have done in previous years," says Mike Metcalfe, merchandise director at Clarks UK.
Retailers know there is a correlation between weather and specific product types, says Metcalfe. "We know that warm summers sell more sandals and cold winters sell more boots," he says. If that correlation is analyzed and scientific predictions applied to it, retailers can better predict weather-based demand and purchase accordingly
Clarks UK does not rely on Planalytics for weather forecasts but instead for demand predictions as influenced by weather trends. "It's an interpolation of the way the weather is going to be," Metcalfe explains. Every week Planalytics sends Clarks a 12 month chart with indices predicting weather trends. The overall picture presented by the indices allows purchasers to be more or less "bullish" on sandals or boots as the trends indicate. "All we're looking for is a trend," says Metcalfe.
The data is not integrated with any software; it is knowledge that is incorporated into the thought processes of the merchandise and buying teams. "It is another tool in the armory to help you be a bit better than the competition," says Metcalfe.
Metcalfe's team looks at the forecasts in the long- and short-terms. In the long term, the team looks three to four months ahead so they can influence the purchases from the manufacturers. Thus, the early indications the team saw regarding winter 2006 prompted the team to make a larger purchase order ahead of time.  RIS