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WEATHER OR NOT IT'S HOT, HOT, HOT; TEMPERATURE AND SEASON LENGTH IMPACT SALES OF HOME CLIMATE PRODUCTS.

NEW YORK-Weather has a clear and obvious influence on the sales of many home solutions products. Think warm weather and fans, or the chill of winter and heaters.

But capitalizing on the weather's influence on home-solutions products is not always so clear and obvious. Complex skills are required -- a little meteorology, some merchandising and marketing savvy, as well as a lot of risk-taking.

"It's a gamble," one seasonal products vendor said. "How do you order the right number of fans or heaters? That's a good question. You look at last year's weather, which isn't accurate, and then take your best guess."

But learning how weather drives sales in the category can help retailers confidently make predictions.

To understand the weather's influence on sales, it's important to separate the physical from the psychological impact on consumers, sources said. It's also vital to understand that there is a growing consumer propensity to create a cleaner home environment. The changing weather plays a significant role.

The most obvious weather-related influence is temperature. In early June, the Northeast was slammed with sizzling, unseasonably high temperatures. Home-comfort product sales jolted. Consumers flocked to retailers across the region to buy quickly diminishing supplies of fans and circulators.

During a break in the rush, Cynthia Crosthwaite, housewares buyer for Tags Ace Hardware in Cambridge, Mass., got on the phone to reorder fans. "We're a single store," she said. "And we sold more than 150 fans yesterday. It's been unbelievable."

What Crosthwaite and other retailers experienced was the physical, direct impact weather has on consumers. It's a basic tenant behind seasonal merchandising programs for the category: offer consumers products that improve their physical comfort and provide relief.

When it's cold, these products include heaters and humidifiers. During the summer months, it's fans and dehumidifiers. The tricky part is maintaining the right amount of products in case of an extended or shortened season.

And with certain products, it's not the heat, but the humidity that influences sales. In June 1998, for example, retailers on the East Coast reported decreases in fan sales and increases in room air conditioner sales. They cited wet, humid weather and not enough "unbearably hot days in a row" during the early part of the month. Retailers expecting the same weather patterns this year were surprised.

"I was caught off-guard this year," one housewares buyer said during the recent Northeast heat blast. "It's tough to call."

Jim Perella, vice president of sales and marketing for Lasko Metal Products, said the company manufactures year-round. If there's a heat wave, retailers can reorder SKUs.

"We can ship rapidly," Perella said. "We will fill the order."

Perella said some of the guesswork can be removed, depending on the region. "Window fans, for example, are sold more in the Northeast and Midwest," he explained. "These are regions with older buildings and less central air. On the other hand, in Texas, where there's new construction, sales of window fans are less."

Guy Duvall, department manager for Ace Hardware, said, "We just try to cover all the bases."

"It's probably the most difficult thing to do," added Adam Dubin, director of marketing for Slant/Fin. "You're predicting the future. You try to look at the weather, and you try to have the right amount of inventory on hand."

Some retailers are increasingly turning to the services offered by weather consultants such as the Wayne, Pa.-based Strategic Weather Services.

The company helps retailers and vendors maximize profits and boost sales by creating distribution, production and promotion schedules that are based on consumer purchasing trends influenced by weather.

Point-of-sale or shipment data is taken by SWS and correlated with historical weather patterns in specific locales. The company provides retailers and vendors with a long-range forecast in two- or three-day increments up to 12 months.

James Gagne, senior vice president of SWS, said the forecasts are 75 percent accurate. Most retailers develop merchandising strategies that are based on the previous year's sales figures and weather, which is about 30 percent accurate, said Gagne.

"More importantly, we measure the affect of weather on consumers' behavior and demand," he said.

"Weathernomics" is the term SWS has coined for its method. Shaping the forecast also involves taking into consideration anything that affects the perception weather has on consumer behavior as well as their income, where they live, their gender and age.

For example, SWS worked with a retailer puzzled by sales inconsistencies in their Florida stores. After correlating point-of-sale data with weather data, SWS revealed that rainy weather was sending younger shoppers to the malls while forcing senior shoppers to stay home.

This information is useful when retailers are drafting distribution schedules. For home comfort products sold by regional discounters or mass merchants, knowledge means big bucks.

"You could be the most operationally efficient organization, in terms of distribution," Gagne said. "But what if you move these products into areas that are unseasonably cool? You must think in terms of a demand chain not a supply chain."

Gagne said retailers follow the calender instead of the weather and often mark down products when they should be selling up. Sears used to mark down price points on its oscillating fans by mid-July.

But in 1996, after consulting with SWS, the retailer changed its strategy. A heat wave was forecast by SWS for mid-July, and the company urged the retailer to cancel its markdowns and clearance promotions. As a result, Sears experienced a boost in sales and profits when the weather turned hot.

"We don't forecast sales, we forecast weather-driven demand," Gagne added.

Another weather-related influence in the category is the affect of allergens.

About 40 million people suffer from allergies. That's a big market for vendors and retailers who carry allergy-control products, which includes air purifiers and vacuums. These are products that help sufferers battle the culprits of their discomfort: dust mites, indoor-grown mold spores and pet hair.

Additionally, about 15 million people suffer from asthma, which is often provoked by airborne allergens such as pollen, according to several studies.

Sunny and dry days usually trigger the highest concentrations of pollen from trees, grass and weeds. Conversely, rainy days tend to offer relief as the airborne allergens are removed. But the relief is temporary since the pollen count climbs within two hours of a rain storm.

Nicolaus Bruns, group product manager for home comfort and housewares at Bemis, said the demand for air purifiers peaks with the spring allergy season as well as during the winter.

And as people increasingly cocoon themselves in their homes, the quality of a cleaner home environment also influences sales of home comfort products.

In floor care, vendors are designing vacuums that can remove allergens trapped in carpets. And vacuums with on-board tools are useful for removing allergens from crevices, in corners and on furniture.

"A sealed house traps impurities inside and the lack of circulation keeps the impurities inside and they build up to a level at which they cause irritation," Bruns said.

When the weather turns hot or the winter season lasts longer than expected, the immediate impact on sales of home solutions products is strongly felt by retailers. The tricky part is determining how much of a product to order before a heat wave arrives, which can possibly leave a store-room full of unsold stock. But some retailers are finding solutions in long-range forecasting.
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Comment:WEATHER OR NOT IT'S HOT, HOT, HOT; TEMPERATURE AND SEASON LENGTH IMPACT SALES OF HOME CLIMATE PRODUCTS.
Author:Zaczkiewicz, Arthur
Publication:HFN The Weekly Newspaper for the Home Furnishing Network
Geographic Code:1USA
Date:Jun 28, 1999
Words:1225
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