In the past, most businesses have ignored external market factors, sometimes voluntarily and, other times, involuntarily. If there’s one thing we know here at CaptainDash, it’s that the availability of external data can provide great insight into a business. In fact, external factors typically influence up to 45% of consumer purchase decisions, according to an OECD study. Of particular interest to us is the effect of weather and climate on consumer behavior, thanks to the abundance of data that can be tracked against business operations to show significant cause and effect.
We now have the power to track weather like never before, which makes it easier to determine the real effects that certain weather patterns have on consumers’ moods and subsequent purchasing behavior. Seasonal purchases reflect general climate change and can sometimes be regionally specific. For example, people buy warm coats and hot chocolate more often during autumn and winter, while they typically opt for bathing suits and ice cream during the summer months. It is also quite obvious that major weather events, such as hurricanes, snow storms, and heat waves, can also have significant effects on consumer attitudes.
What you may not realize, however, is that exposure to sunlight and warmer temperatures increases the likelihood that consumers will choose to make purchases in general. In a 2010 study at the University of Alberta and the University of Winnipeg, researchers discovered that people who are exposed to sunlight, both real and artificial, are willing to pay significantly more for a wide range of products, including orange juice, gym memberships, and airline tickets. At the same time, bad weather, including rain, clouds, and chill, enhances the effects of negative marketing messages. For example, potential consumers are more likely to respond positively to an advertisement encouraging them to buy car insurance on days with unfavorable weather This all seems very logical, but it’s easy to put this information off to the side when you’re busy managing a business. It can also be difficult to react to the effect that weather has if you don’t have a way to measure it.
Why not have an in-store sale during a week that is predicted to be sunny and warm as opposed to making a random choice? You might just see your sales volume climb more than you expected. What if the predicted weather is supposed to be chilly and damp over the next two weeks in May? Hold off on the launch of a major air-conditioning campaign. These examples demonstrate concepts that hold true for businesses across many different types of markets.
Do you think that weather can have a very real and significant effect on consumer behavior? If so, do you recognize how your purchasing habits change with the weather? How will your business react to changes in operations due to changes in weather?
In upcoming blog posts, we will discuss some of the other external factors we have also included in the CaptainDash application. Also, we love when our clients ask for specific data because we love expanding and enriching our data library. After all, there is always the opportunity to include more external data – the amount of data is rapidly increasing by the day and we’d like to make as much of it available to CaptainDash users as possible. So feel free to voice your ideas – everyone can have a hand in the Big Data revolution!