How the Winter Weather Will Affect Retail

This year, half the nation has been hit by dizzyingly cold weather. In the middle of December, the Midwestern states, and even areas in Oregon and Northern California, received several feet of snow without much signs of stopping. There have also been sub-zero and negative temperatures in the same areas, which is more typical of January than it is December.

This wicked cold front has varying effects on consumers’ lifestyles and the economy, but one surprising and long-lasting effect is how cold weather impacts retail. Your gut instinct might tell you that cold weather will drive business away, but retailers actually see a huge jump in revenues when the cold arrives.

Retailers Take Advantage of Cold Weather
Many retailers are very excited for the cold weather, especially after the last two winters, which were unseasonably warm and snowless. Retailers recognize this time as an opportunity to take advantage of increased shopping.

One good example of this is Sears, which after running studies on the effects of cold weather on regular goods, decided to create a promotional burst from its findings. Sears determined that a vehicle with a battery that was five years old or older often died after four nights of severe cold. So, on the third night of severe cold, the retailer began running a promotional sale on batteries, making sure to run the advertisement before batteries died to plant the seed. Naturally, consumers flocked to this source of on-sale batteries because the advertisement was already imprinted in their minds.

Another good example is the price fluctuation of vehicles. Automobile dealers know that demand for convertibles and similar sports cars rises significantly when temperatures reach 75 degrees. On the flip side, these car models decrease in demand when the temperature dips below 60 degrees, and the price of all-wheel-drive and four-wheel-drive vehicles climb considerably at the first sign of snow. Dealers take advantage of sales by season because of the high demand for certain products.

Their pricing and marketing efforts change, but consumers don’t let that bother them because the demand is so high. They don’t mind paying full price for a pair of boots or a better car because the need is so prevalent.

Consumer Shopping Behavior Also Shifts
Consumers will approach shopping much differently when the temperatures drop as well. They’ll spend more in certain areas and less in others. This is all tied to a strong emotional pull that influences the way they make purchases. When it's cold, consumers are more prone to make impulse purchases they wouldn’t normally make when it’s warm. For example, cold weather can lead to an increase in purchases of cappuccinos because people are shopping for products that will comfort them and lift their spirits on cloudy, dreary days.

Online shopping also increases during the winter. When there’s snow, ice, wind and sub-zero temperatures, consumers would much rather stay indoors rather than do their shopping at a physical store. They’ll even pay higher prices and expedited shipping costs to make it happen.

Winter inventory is more likely to move quickly than summer inventory. People are able to make clothing and shoes “work” during the summer days, decreasing the need to go shopping. However, cold winters encourage far more sales of winter boots, coats and accessories because warmth is something you can’t simply “make do.”

This winter, sales are expected to be even higher because the last few winters have been warmer and less severe. Wall Street forecasts that demand for winter-related gear is expected to rise as much as 22 percent compared to last winter. People have outdated or even nonexistent winter gear on hand, requiring more trips to clothing retailers to get warm.

Winter Isn’t Good for Everyone
Clothing, department stores, automobile dealerships and other organizations that sell winter items see much higher profits when temperatures drop, but not every industry benefits from winter weather. Restaurants, in particular, see a significant downward spiral in sales when it’s cold outside. Speculations from Wall Street say that restaurant industry sales are expected to drop by as much as $1.1 billion compared to last year when the weather was warmer and more inviting.

Larry Alton is a freelance writer, whose work regularly appears in Huffington Post, Entrepreneur, Inc. and Adweek.