Accounting for Climate When Determining the Impact of Weather on Retail Sales
In this paper, we explore the importance of accounting for climate when determining the impact of weather on product sales. Using a France-wide scanner panel dataset provided by our industry partner, we show that if climate is not accounted for, product categories may be misclassified as being weath...
| Main Authors: | , , |
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| Format: | Article |
| Language: | English |
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MDPI AG
2023-09-01
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| Series: | Businesses |
| Subjects: | |
| Online Access: | https://www.mdpi.com/2673-7116/3/3/30 |
| _version_ | 1827726812495478784 |
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| author | Stanko Dimitrov Régis Y. Chenavaz Octavio Escobar |
| author_facet | Stanko Dimitrov Régis Y. Chenavaz Octavio Escobar |
| author_sort | Stanko Dimitrov |
| collection | DOAJ |
| description | In this paper, we explore the importance of accounting for climate when determining the impact of weather on product sales. Using a France-wide scanner panel dataset provided by our industry partner, we show that if climate is not accounted for, product categories may be misclassified as being weather sensitive when they are not, and vice versa. This is motivated by previous research and industry reports that suggest a relationship between weather and retail sales. However, these studies often fail to distinguish between weather and climate, leading to inaccurate conclusions. Our results highlight the need to control for climate in order to accurately assess the effects of weather on retail sales. We use ordinary least squares regression to estimate the relationship between temperature and sales for 29 different product categories. The regression models control for various factors, including shelf space allocation, week of observation, quantity purchased, promotion, store brand, store surface area, store competition, and consumer behavior measures. We find that when accounting for climate, only a subset of the product categories is sensitive to weather. Additionally, we show that climate can be approximated using a week index, eliminating the need for additional data collection and approximation efforts. Our findings have implications for both researchers and practitioners. Researchers should be aware of the importance of accounting for climate when studying the impact of weather on retail sales, as failing to do so may lead to erroneous conclusions. Practitioners can use our results to inform their marketing and sales strategies, taking into account the weather sensitivity of different product categories and the role of climate in shaping consumer behavior. Overall, our study emphasizes the need to consider climate when determining the impact of weather on retail sales, and provides practical insights for retailers and economists. |
| first_indexed | 2024-03-10T22:57:09Z |
| format | Article |
| id | doaj.art-43dd6d143d52478e861ef0e852f6e63c |
| institution | Directory Open Access Journal |
| issn | 2673-7116 |
| language | English |
| last_indexed | 2024-03-10T22:57:09Z |
| publishDate | 2023-09-01 |
| publisher | MDPI AG |
| record_format | Article |
| series | Businesses |
| spelling | doaj.art-43dd6d143d52478e861ef0e852f6e63c2023-11-19T09:53:37ZengMDPI AGBusinesses2673-71162023-09-013348950610.3390/businesses3030030Accounting for Climate When Determining the Impact of Weather on Retail SalesStanko Dimitrov0Régis Y. Chenavaz1Octavio Escobar2Department of Management Sciences, University of Waterloo, Waterloo, ON N2L 3G1, CanadaKEDGE Business School, MOSI Department, Domaine de Luminy, 13009 Marseille, FranceMétis Lab, EM Normandie Business School, 92330 Clichy, FranceIn this paper, we explore the importance of accounting for climate when determining the impact of weather on product sales. Using a France-wide scanner panel dataset provided by our industry partner, we show that if climate is not accounted for, product categories may be misclassified as being weather sensitive when they are not, and vice versa. This is motivated by previous research and industry reports that suggest a relationship between weather and retail sales. However, these studies often fail to distinguish between weather and climate, leading to inaccurate conclusions. Our results highlight the need to control for climate in order to accurately assess the effects of weather on retail sales. We use ordinary least squares regression to estimate the relationship between temperature and sales for 29 different product categories. The regression models control for various factors, including shelf space allocation, week of observation, quantity purchased, promotion, store brand, store surface area, store competition, and consumer behavior measures. We find that when accounting for climate, only a subset of the product categories is sensitive to weather. Additionally, we show that climate can be approximated using a week index, eliminating the need for additional data collection and approximation efforts. Our findings have implications for both researchers and practitioners. Researchers should be aware of the importance of accounting for climate when studying the impact of weather on retail sales, as failing to do so may lead to erroneous conclusions. Practitioners can use our results to inform their marketing and sales strategies, taking into account the weather sensitivity of different product categories and the role of climate in shaping consumer behavior. Overall, our study emphasizes the need to consider climate when determining the impact of weather on retail sales, and provides practical insights for retailers and economists.https://www.mdpi.com/2673-7116/3/3/30weatherclimateretailingscanner datanational |
| spellingShingle | Stanko Dimitrov Régis Y. Chenavaz Octavio Escobar Accounting for Climate When Determining the Impact of Weather on Retail Sales Businesses weather climate retailing scanner data national |
| title | Accounting for Climate When Determining the Impact of Weather on Retail Sales |
| title_full | Accounting for Climate When Determining the Impact of Weather on Retail Sales |
| title_fullStr | Accounting for Climate When Determining the Impact of Weather on Retail Sales |
| title_full_unstemmed | Accounting for Climate When Determining the Impact of Weather on Retail Sales |
| title_short | Accounting for Climate When Determining the Impact of Weather on Retail Sales |
| title_sort | accounting for climate when determining the impact of weather on retail sales |
| topic | weather climate retailing scanner data national |
| url | https://www.mdpi.com/2673-7116/3/3/30 |
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