Here comes the sun: Fashion goods retailing under weather fluctuations

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. Specifically, weather variations change the propensity to visit the point of sales, because travel cost is affected by weather conditions; and they impact differently different product categories, because the reference utility in the mind of the consumer is affected by current weather. We empirically study these two impact dimensions at a large fashion apparel retailer. We find that rain has a large effect on footfall, increasing it in shopping mall stores and decreasing it in street stores, which suggest that it is a first-order factor for channel choice. Temperature has a milder effect on footfall. In contrast, temperature has a large impact on conversion, increasing sales of the appropriate categories: summer items are sold more under positive temperature shocks, and winter items less. Finally, although theory suggests that the weather should have a moderating effect on price sensitivity, we find that it is unaffected by the weather. (c) 2020 Elsevier B.V. All rights reserved.

Automated summary

Weather is a significant driver of demand for retailers, affecting consumer footfall and sales of different product categories based on factors like rain and temperature. Rain has been found to impact footfall differently in shopping mall and street stores, while temperature affects sales conversion for specific item categories like summer and winter apparel. Additionally, price sensitivity remains unaffected by weather conditions.