Of course, everyone likes to eat ice cream in the summer. But why is milk also a bestseller at high temperatures? Thomas Michahelles from wetter.com analyzes the weather data and uses it for online trading. In an interview, he explains what ice cream-free retailers have to do in the summer, how climate change is affecting e-commerce, and if and when the refrigerator will finally order drinks for us.
Online StoreNews: Summer is here: can you predict what the usual supposed bestsellers are being bought again and again when the temperature is high?
Thomas Michaels: Classic summer items such as sunscreen, swimwear, ice cream and grilling products are of course very popular when the temperature is high. There are also all kinds of cold drinks, interestingly also milk, which we learned about in one of our projects. On the other hand, in the case of yoghurt, the willingness to buy decreases as the temperature rises. This shows that even with similar product categories, the weather effects can turn out to be the opposite.
This allows online retailers to optimize their sales in the summer
What can retailers who do not have such products in their assortment do during the summer bear market? Special sales campaigns etc?
Marketing is the main lever in reacting to the weather effects of individual products. For example, retailers whose products are not sold at high temperatures can cut advertising costs and only turn on the faucet when the weather permits. It can do a lot. For example, we optimized the weather-optimized product recommendations on store pages for a large online retailer, which led to an increase in click-through rate of more than 23 percent.
What role do weather forecasts and the right tools play in online trading? Is there a particularly suitable positive / negative example?
Many companies are aware and unquestionable that the weather has a big influence on purchasing behavior. However, some still trust their gut while others are already using weather data – whether it’s simply providing data via the weather API (application programming interface, programming interface) or using forecasting models for operational planning. Weather targeting is also nothing new. So there are many ways to optimize your processes using weather data.
Weather data for targeting and forecasting product sales
How can smaller online retailers make even better use of the seasonal weather or seasons, for example in targeting and the like?
In particular, e-commerce is about sending the customer the right offer at the right time. The weather can be crucial here as, in combination with location, it provides important signals on how customers respond to an ad.
For example, 20 degrees in Munich doesn’t make you want to eat ice cream, but in Hamburg it does. Accordingly, it would be more profitable to advertise ice cream in a Hanseatic city than in the south. So the question is, where is it worth playing advertising? One of the answers is provided by product weather indices, which are a kind of weather forecast for the sale of products based on weather data and data from the GfK Consumer Panel. Put simply, it works like this: If the index for a specific product reaches a certain value, the ad plays. In the campaign for the Schiesser swimwear online store, we managed to increase the click-through rate by 70 percent. In addition, a data protection compliant and cookie independent approach to targeting was found.
Weather effects vary depending on the product
Is there really such a thing as frustration over the weather – eg B. Do sales increase when it rains in some categories? Or other observable weather effects?
The first thing that comes to mind is chocolate, which usually ends up in the basket at lower temperatures. I can’t tell if it has to do with frustration because it’s cold and dark outside. Because weather effects can vary from product to product and have very different effects on sales. If you look at this in the chart below over the course of the year – for 2021 versus 2020 – as an example for a few products, some interesting things emerge.
- The cold and gray spring of 2021 reduced interest in garden furniture.
- Classic “good weather products” suffered during the rainy summer of 2021.
- Low temperatures favor the sale of chocolate.
Climate change and problems in logistics: here’s what online retailers can do
Due to global warming, the world is getting hotter. What are the consequences for e-commerce in general and for retailers?
I think the main focus will be on logistics and purchasing. Extreme weather conditions are increasing. This affects not only heat and droughts, but also heavy rains and floods, which can lead to significant problems in the transport of goods. In addition, changes to the assortment are also possible. Not only because of possible supply bottlenecks, but also because classic summer products, for example, have to be in stock for much longer.
How do you see the future of weather driven e-commerce and related technologies? Will Alexa soon give us a purchase recommendation for forecast etc?
On the one hand, I believe that due to climate change, the weather will also play an increasingly important role in retail and e-commerce and that in the near future, tools will indeed be needed to prepare for or adapt to extreme weather events. On the other hand, the weather will certainly have its place in new consumer-oriented technologies.
I mean, for example, ambient computing, the next level of voice technology and the smart home. We communicate with intelligent agents such as glasses, lamps and other objects on the basis of appearance, movements, behavioral patterns and wishes, the context of which should be understood by the artificial intelligence that surrounds us. So when it gets hot outside, the refrigerator can send out your next drink order without asking.
Thanks for the interview!
About Thomas Michaelles: Thomas Michahelles has been associated with wetter.com since 2020. As a Senior Manager of Business Development B2B Data, he controls the sales and further development of the Meteonomiqs data solution offer. The focus is on business solutions based on weather and geographic data that can be used to optimize business processes and harness previously undiscovered business potential.