Retailers may not be able to control the weather, but they can plan for it, according to Planalytics’ Evan Gold.
“There are things that businesses can do to better prepare for the impact that weather’s going to have. The first is understanding what demand signal that’s going to trigger in the customer,” says Gold, executive vice president of global partnerships and alliances for the weather analytics firm, on this week’s episode of Retail Gets Real.
“Weather is the most local impact in terms of what we do on a day-in and day-out basis and therefore, it impacts retailers and a lot of national retailers that have the ability to move product to certain places at certain time periods.”
Geography and tolerance for bad weather also play a part in how consumers shop and what they buy, Gold says. “It’s different not only for every product, but it’s different by time period and location,” he says. “You get an inch of snow in parts of the south like Atlanta, it can shut the city down. Versus an inch of snow in a place like Minneapolis, which can actually put customers in a winter mindset and then they are out doing that holiday shopping. They’re going to be buying more gifts like boots or sweaters or jackets and gloves.”
This winter will be colder than previous years, according to Gold, which will likely drive up prices for cold weather items like heaters and blankets. “But all types of cold-weather apparel like jackets, thermals, sweaters, and then consumables like hand and body lotion, chili, soup, hot coffee and cocoa — all of those are up single-digit percentages on a year-over-year base,” he says.
“Mother Nature’s providing a gift for a lot of businesses where you’re seeing a lot of cold over the next couple weeks, which is going to drive a lot of that need-based [shopping],” Gold says.
Listen to the full podcast to hear more from Gold on how the weather influenced shopping patterns this fall and holiday season and how retailers can plan ahead for extreme weather events.
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Episode transcript, edited for clarity
Bill Thorne: Welcome to Retail Gets Real, where we hear from retail's most fascinating leaders about the industry that impacts everyone everywhere, every day. I'm Bill Thorne from the National Retail Federation. Retailers may not be able to control the weather, but they can plan for it. And on today's episode, we're talking with Evan Gold, executive vice president of global partnerships and alliances at Planalytics. We're going to see how weather impacts consumers and how they shop, especially this holiday season, what they're buying, and when and what retailers can do to be prepared for Mother Nature heading into 2023. Evan Gold, welcome back to Retail Gets Real.
Evan Gold: Thanks, Bill. It's great to be back.
Bill Thorne: Before we started, we were reminiscing. It has been multiple years, which is really a shame because I think that the story that you have to tell is incredibly compelling and everybody learns from it. Nobody really thinks about how weather can impact consumer behavior.
Evan Gold: And yet it does.
Bill Thorne: And yet it does. You know, we always start by saying the industry that impacts everyone everywhere, every day. You actually research the one thing that truly impacts everyone everywhere, every day.
Evan Gold: <laugh> We are very much aligned on that.
Bill Thorne: So we're together.
Evan Gold: We are. Congratulations, Bill, on this podcast.
Bill Thorne: Thank you.
Evan Gold: It's great to be back here. Really appreciate the opportunity.
Bill Thorne: Just found out that we're at 291, 292. That's amazing to me.
Evan Gold: That's wonderful. It's great news. It's an honor to be back here. I appreciate our partnership together as well.
Bill Thorne: Well, thank you. I want you to, for those that didn't hear that episode back in the twenties, briefly, tell us about yourself and Planalytics.
Evan Gold: Sure. On an individual level, I have always been in retail. I've spent my career in retail starting out for Macy's, going through their executive training squad, from there working for a retail management consulting firm, working with a lot of the top tier retailers and brands that are members of the NRF, and took a turn to join Planalytics a number of years ago. Something that I'm very passionate about, not just in terms of retail, but weather analytics data was kind of the perfect storm, if you will, pardon the pun. I think it's over the last several years since I've been involved with the company and we've been helping our customers, there's no better time not only to be in retail, but certainly from an analytics perspective, it is all throughout the industry right now.
Bill Thorne: There's never a bad time to be in retail. There are difficult times <laugh>, but we'd like to think of those as opportunities.
Evan Gold: That's right. I do believe that. I think there's no better time actually to get into retail than right now. I think for a lot of students that are coming out, I speak with students quite a bit—
Bill Thorne: Yeah.
Even Gold: — about the opportunities that the retail industry provides, both, not just in terms of working in stores, but the technology or the service providers. There's so much change, disruption and opportunity happening in retail, over the last several years. I think it's a great industry to get involved with.
Bill Thorne: Yeah. We talk a lot about change, and you've got to be open to change, and you've got to embrace change if you want to be successful in retail. What do you think is the most interesting thing about your job? I mean, what do you really love about it other than that you get to work with retailers?
Evan Gold: I think for me, the most engaging thing is we talk about this thing and we've talked about weather, but really when I think people think about weather, they think about what am I going to wear for that day or am I going to be able to do certain activities over the weekend. It's very different from a business perspective.
Bill Thorne: For sure.
Even Gold: And that's the difference I think. With Planalytics, it’s a predictive demand analytics company. We help retailers as well as restaurants and retail-adjacent businesses like consumer product companies. We quantify, we measure the impact that weather has on consumer behavior. Because we measure it, it can ultimately be managed. The objective here is to get those businesses to action the impact of weather so that they can better serve the customer. That's what retail is all about, it’s making sure you best serve the customer and service level goals and are meeting your customer needs. Weather, as you said earlier, impacts everyone everywhere, every day. That is one of the largest external drivers of consumer need and purchasing.
Bill Thorne: It's interesting because once you start working with retailers and you learn every single day, every single conversation about what they're thinking about, so much of it is inventory. So much of it is preparing for the seasons. I remember not too long ago, we had a particularly warm winter and it just — and one of the department stores was just lamenting how many coats they had to sell because it was so warm. But you can anticipate it and you can plan for it, but at the end of the day, you got to have it if the consumer wants it. Just because it gets warm and people think, ‘Well, maybe I don't need to get that new coat after all.’ It's not anything you did wrong. It's an act of God.
Evan Gold: Well, but there are things that businesses can do to better prepare for the impact that weather's going to have. The first is understanding that demand signal that's going to trigger the customer. How's the weather in New York City differ from Salt Lake City and how does the customer buy and behave?
Bill Thorne: Right.
Evan Gold: It's very different. Weather is the most, other than maybe politics, weather is the most local impact in terms of what we do on a day-in and day-out basis.
Bill Thorne: Well, that's for sure.
Evan Gold: Therefore, it impacts retailers and a lot of national retailers that have the ability to move product to certain places at certain time periods. The weather becomes that significant demand signal that can be used to proactively make those adjustments to, again, have the right product in the right place at the right time.
Bill Thorne: I'll tell you, for me — I have a dog and I walk the dog in the mornings. I'm southern, raised in the South, my blood is thin, people make fun of me because it's 58 degrees and I'm wearing a wool coat, but we had those polar vortexes. I've never shopped with such immediacy as I did after the first experience with that. It was pretty extraordinary. I have never felt that before. I never want to feel it again. I really was pretty much at the point where if the dog wanted to just do his business in the house, I was fine with it.
Evan Gold: That is a great example of weather driving me and is absolutely significant. And in today's environment, if the product wasn't at the store that you wanted to, you either went to a different store or maybe put off that purchase and didn't go back. But you certainly left the business not feeling as good as if they had had the product that you wanted. Weather drives that need, and it's really significant in terms of what that means in terms of profitability. But also, it's not just, you talked about products for your dog, it's all different categories. It's food. So there's waste reduction components. It's forecast accuracy improvements. It really runs the gamut of opportunities where you can leverage predictive demand analytics to better serve your customer.
Bill Thorne: Well, it takes me about, in the wintertime, it takes me as long to get ready to go outside as it does to actually walk the dog. Because it's all about layering. The beauty of flannel-lined jeans is, there's just no words for it. <laugh>. So NRF is forecasting a great holiday season. Set the scene for us heading into Christmas. How did the weather influence this fall’s shopping patterns?
Evan Gold: That's a great question, Bill. Early in the fall, the weather was relatively mild for much of the country. Then as we moved through October and into November, kind of the core of the ramp up to the holiday season in November, things really started to get much colder, which drove those need-based purchases of a lot of the cold weather apparel. But it also was helpful not just for the products they were putting into their basket, but also for enabling customers to get to the store. If you look at the Black Friday weekend, we not only had a cold week that included Black Friday weekend, but it was relatively dry. We had no, what we call traffic-limiting events, no major snowstorms or huge rain events that kept customers either at home. It enabled them to get out to shop. When we look at the NRF numbers that talked about record number of shoppers over that Black Friday weekend, the weather helped contribute to some of that year-over-year growth that we saw.
Bill Thorne: We know how weather, we think we know how weather impacts, but I think you're kind of the guy that can really tell us about the ways that the weather specifically impacts holiday shopping and how consumers are spending.
Evan Gold: We absolutely know it because we understand what has happened in the past and how consumers have shopped, what drives them to go to the stores or to go online. It's different, Bill, not only for every product, but it's different by time period and location. Certain parts of the country this time of year, it's normal for them to get snow. You said you're from the south, you get an inch of snow and —
Bill Thorne: Oh, dear Lord.
Evan Gold: — parts of the south like Atlanta, it can shut the city down. Versus an inch of snow in a place like Minneapolis can actually put customers in a winter mindset and then start to get, as they are out doing that holiday shopping, they're going to be buying more gifts like boots or sweaters or jackets and gloves as opposed to, again, a place in the South where they may not even be able to get out and get to the stores.
Bill Thorne: Yeah, there was one winter when I was in high school and they predicted that we were going to have an ice storm. So the night before, all the schools closed down and the next day we went to the beach because it was so nice. That was called a fail <laugh>.
Evan Gold: That is such a great point, Bill, because that's one of the things around consumer behavior and weather. As consumers, we buy to the forecast as much as we do to what actually happened. You know?
Bill Thorne: Sure.
Evan Gold: If your local news or the app on your phone is saying there's going to be a snow event this week, there are things that we will do to go out and make that purchase regardless of if it snows or even how much it snows. A lot of the purchasing happens in advance of the weather actually hitting, because again, as consumers we're — whether it’s pantry-loading those food and beverage items, we're going out and getting those cold weather gear.
Bill Thorne: Well, they predict snow. Good luck getting the toilet paper. With inflation creating higher costs for everyday things, are you seeing that inflation is creating more need-based shopping?
Evan Gold: Yeah, we absolutely are seeing that. The reason for that is as prices go up or as consumers have less discretionary income, they're buying more to need. It's not just inflation. There are a lot of other factors that are influencing the consumers. The bottom line is that they have less money to spend. They're going to be potentially buying more cold weather gear. They're going to be buying more to need. This December, we talked a lot about December, but right now, the month of December, it's colder than it was last year and it's going to be colder than last year. Now, part of that is the fact that we are comparing to the warmest December ever recorded going back to the 1890s, Bill.
Bill Thorne: Wow.
Evan Gold: Last year was absolutely just wall-to-wall warm for most locations. This year, because it's going to be colder, people may not have gotten those gift-given items last year. This year they're going to be buying those seasonal items, which is also really important as well. I know we're going to talk about post-holiday in a minute, but for retailers that are out there listening to this now, the opportunity for December is really significant for those cold weather goods. Not only because the customer's going to need them, but certainly now's the time to move it. January into February, even though it's going to be colder in January and February, retailers want to sell those goods now.
Bill Thorne: Sure.
Evan Gold: Even to the holidays.
Bill Thorne: Yeah.
Evan Gold: The weather's providing a gift, if you will, Mother Nature's providing a gift, for a lot of businesses where you're seeing a lot of cold over the next couple weeks, which is going to drive a lot of that need-based purchase.
Bill Thorne: Well, I hope the retailers and businesses take full advantage of it because I'm really sorry to hear that. But when you say that we're going to have a colder December, January, is that across the board? South, northeast, west …?
Evan Gold: Most locations, not everywhere, but certainly a lot of the major markets. Everywhere from New York City, certainly the center of the country, parts of the Pacific Northwest, again, as a business we quantify the specific lift or drag that weather has. A couple of examples around that is not just need-based items, like heaters being up 20% and blankets being up 5 to 10%, but all types of cold weather apparel like jackets, thermals, sweaters, and then consumables like hand and body lotion, chili soup, hot coffee and cocoa, all of those up single-digit percentage on a year-over-year base. Now when you get to the local level, those numbers generally increase and that's where you see the opportunity for a lot of businesses that are either replenishing, planning or dealing with pricing or promotion- related changes to utilize those analytics to make sure that you not only have the right product in the right place at the right time, but that you're also better staffed up to meet the demand that because the customers are coming in.
Bill Thorne: Yeah. I actually, last year in January I was in Indianapolis, I think that first week of January. It was nine degrees. It may have been the warmest December, but that was the coldest I think I've ever been.
Evan Gold: That's why there's opportunity, that's the opportunity in December, Bill, because when you look forward to January, you're right. January, this upcoming year in 2023, is going to be milder than it was last year. Now is the opportunity for retailers to move that product, move it at a higher margin and get rid of those goods because in January there's going to be a lot of weather-driven risk.
Bill Thorne: Speaking of that, how do retailers use your insights to help with their planning? Because most retailers, when they do their buying, they're buying months in advance because they've got to get the product, they've got to get it to the United States, they've got to distribute it to their distribution centers, they've got to get it in their stores, this takes time. So how do they use your insights to plan accordingly?
Evan Gold: We usually, and that's a great question, we think about it in three time periods. You certainly look at the past to understand how much weather contributed to results. You can certainly look at the next two weeks, the changeable conditions. Now, when you look out, let's say upwards of a year. I just told you that last December was the warmest we ever had. So that was baked into retail results coming out of last December. Our analytics will have told businesses a year ago that this December was going to be colder than last year, so that they could plan for an increase in demand. They had this entire year to plan for that activity and on a product and location, even down to a store level, store product level, to make sure they not only plan correctly, but now are tuning those plans to make sure the right product is in the right place.
Bill Thorne: That's awesome. I am literally less than one month away, it's like 29 days, from taking my big bag of luggage, putting it on the Acela, and taking myself to New York City in anticipation of the greatest time of the year to be in retail, which is Retail's Big Show. You're speaking. What are you looking forward to at the Big Show?
Evan Gold: Planalytics, we're thrilled to be back at Big Show and we're very excited at that opportunity to hear from customers around how they're using demand analytics to improve their forecast. This is a great opportunity to hear specifically from businesses that use these analytics, how that plays into their plans. Then even more broadly, Bill, I'm just really excited to get back to the Big Show. We have a number of partners. We partner with a lot of technology companies that will embed these analytics into their forecasting systems so that retailers can use them at scale. But in addition, NRF always puts together just a great lineup of speakers, best in class expo hall, there's so many different opportunities to engage. I'm probably dating myself a little, but this might be my 24th or 25th year being at Big Show.
Bill Thorne: Wow.
Evan Gold: It is one of the highlights of the year for me too, not just from an educational perspective, a networking perspective, reconnecting with former colleagues, current business partners, associates. It's in New York. It's going to be cold, cause it's January as you said <laugh>. But it's going to be warm in the Javits Center.
Bill Thorne: Well, we've had such great luck as it relates to weather events around the Big Show, i.e., none. We've come close a couple of times, but we've really snuck through and I literally am knocking on wood because we're hoping for the same results over the course of the Big Show this year. Evan, I mean, that's pretty astounding. You should get a special badge for a quarter-century of Big Shows and you still look young and you still look vital. It's a lot of work. It's a lot of fun, but it's also a lot of work.
Evan Gold: It is, but retail is a great industry to be in. I feel like it keeps me young. Like I said, I enjoy the opportunity to speak, whether it's with students or new folks, new to the industry. I think retail is the most dynamic industry on the planet and there's, well, it's so many. There's just so many different opportunities for people to get involved.
Bill Thorne: Yeah.
Evan Gold: We're here talking today about demand analytics.
Bill Thorne: Right.
Evan Gold: But whether you, so you can work for retailers, you can work for analytic companies, other technologies, service firms, there's so many different opportunities for folks that are relatively new to the industry and you can have a really significant impact.
Bill Thorne: Yeah. We talk a lot about that in the jobs. So many people just look at retail and they think it's folding sweaters at the mall. And it's so much more than that.
Evan Gold: It's so much more.
Bill Thorne: I mean, really excited about what's coming up next with all of the programming that we do, all the speakers that we have, all the people that you only get to see once a year at the Javits Center during the Big Show reconnecting. Anyway, let's get back to the weather event. So how are extreme weather events changing how retailers plan and how consumers shop?
Evan Gold: That’s a great question as well. The weather is more volatile now than it ever has been before. It absolutely is. I think for retailers, having an understanding of the volatility, what that means for their business. Being able to quantify to a business, here's how much on an annual basis climate and weather brings in terms of float to your annual sales, is something that is, because you've measured it, now you can start to tackle how you manage it. For example, we were talking around some food retailers earlier. Waste reduction is a significant amount of cost for folks.
Bill Thorne: Huge, yeah.
Evan Gold: If you can forecast better, something as simple as saying, demand for salads is going to increase because of the weather and therefore you should make more or when demand goes down by producing less, therefore you throw away, you have less waste. We work with retailers all the time and that's one of the key measurements is waste reduction, which ties back to sustainability goals. There's a host of other metrics that you can use these analytics because you've taken those measurements, you're now actioning, you can manage the business and then demonstrate what the benefit is back to the business. Forecast accuracy reduction, waste reduction, in-stock improvement, service level improvement, all of these are metrics that we're working on with our customers day-in and day-out to now take those volatility that we talked about at the beginning, something that people think is a little nebulous, like the weather. And now talking around what does it mean to the customer and more importantly, what are the benefits and opportunities for a specific retailer to capitalize on.
Bill Thorne: When you look toward the future, we're talking a lot about climate change and things, how that is going to impact all of us in many different ways, but when you're working with retailers, is it next month, six months, one year, 10 years? Or is it just let's focus on what we know?
Evan Gold: It's more around understanding what the translation of how the consumer is going to behave and purchase, how do you action that within your systems and processes and do so at scale? I used a few examples of analytics, but you've got retailers that have tens if not hundreds of thousands of items and each one can have different levels of sensitivity and volatility due to the weather. The only way that you action that is taking those analytics and integrating them into the solutions that a retailer uses to make changes to forecasting, planning, allocation, replenishment, those type of decisions. Marketing's another great one.
Bill Thorne: Oh, for sure.
Evan Gold: Hitting the customer with a weather-relevant message at the same time they're recognizing the need to make that purchase. Back to your dog walking example. Somebody hits you with a message to come in and get a winter hat or a new pair of gloves a few days before that cold weather comes in, you're more likely to go and shop from that retailer than maybe somebody else.
Bill Thorne: Mm-hmm. <affirmative> For real. Evan, you've been doing this for a while, i.e., retail. What excites you most about the future of retail?
Evan Gold: I think, again, I'm going to go back to the element of change that's happening in our industry right now and the opportunities that brings. I know there's, retailers, there's always periods of challenges and difficulties, but I think out of that brings the opportunity for individuals as well as businesses to stay close to the customer and better serve them through things like technology and analytics. That's what I'm passionate about, that's what I'm really excited about. I think for a lot of businesses, a lot of retailers, when you and I started in this industry years ago, there wasn't a chief analytics officer. There weren’t data scientists in retail. Now it's commonplace to see them and they're using analytics, like what we're providing or what other services are providing, as a way to better meet the needs of the customer. The customer is changing so rapidly right now and that's what I'm excited about is how the pace of technology and analytics is an enabler to better serve the customer.
Bill Thorne: We say it quite often. At the end of the day, the successful retailers are the retailers that know their consumer, know what they want, where they want to get it, how much they want to pay for it, and what their expectation is in terms of that relationship between them and the brand. That is critically important. We do have a lot of students that actually listen to Retail Gets Real. I do like to ask people, especially like you, Evan, who's got a long history in retail. What is your best piece of advice for these folks that are just getting started?
Evan Gold: That's a great question, Bill, because I speak with students at places like FIT, University of Arizona, a bunch of other places involved with the NRF as well. I think for a lot of folks, certainly, and these are people that you talked about earlier, that have a lot of passion. My recommendation is do everything and anything you can to get involved and essentially go above and beyond. Do what maybe some of the other students wouldn't necessarily do. That can be reaching out to people on things like LinkedIn. I encourage that anytime I speak with students, look me up on LinkedIn. I'm surprised that more people don't take advantage of that.
Bill Thorne: Yeah.
Evan Gold: I think as an industry, for a lot of folks that have been in retail for a number of years, we're looking to see the next generation of leaders. I think that to me is the best opportunity is to engage with folks. That would be my challenge to folks that are just starting out, do things that maybe others wouldn't and reach out to others in your industry. For not only just education, advice, mentorship, there's so many opportunities that will come from building those relationships. At the end, it is a relationship-based business.
Bill Thorne: Amen to that. Evan Gold, as always, it has been a real pleasure talking with you. Thank you so much for joining us today.
Evan Gold: Thank you, Bill. I always enjoy these opportunities to engage and thanks so much. I look forward to seeing in New York for the Big Show.
Bill Thorne: I'm looking forward to it. Evan, I really am.
Evan Gold: Happy holidays.
Bill Thorne: Thank you and to you as well. And thank you all for listening to another episode of Retail Gets Real. You can find more information about this episode at retailgetsreal.com. I'm Bill Thorne, this is Retail Gets Real. Thanks again for listening and until next time.