Service and Operations Management
Here Comes the Sun: Fashion Goods Retailing under Weather Shocks
The weather has been identified as an important driver of demand and constitutes a major
risk for retailers, especially in goods for which usage is affected by weather conditions, such as
soft drinks or fashion apparel. We empirically study the impact of weather variables on the
operations of a large fashion apparel retailer. We develop two models: one for store footfall
and another for conversion of visits into product category sales. We find that rain has a very
large effect on footfall, increasing it in shopping mall stores and decreasing it in street stores.
Temperature has a milder effect on footfall but is the main driver of conversion, increasing sales
of the "appropriate" categories: summer items are sold more under positive temperature shocks
and winter items less. Furthermore, the weather has a moderating effect on price sensitivity, and
specifically rain makes customers less price-sensitive. This finding allows us to exploit weather
variations to improve profits: we demonstrate that weather-contingent pricing can increase
revenues by up to 2% during rainy days.
Belkaid, Abdel; Martínez de Albéniz, Víctor, "Here Comes the Sun: Fashion Goods Retailing under Weather Shocks", 02/2017