Planalytics' indicators predict increased holiday sales

Starting with Black Friday and continuing through Christmas, the coming holiday shopping season will, as a result of better weather conditions than last year, show improved store traffic and a resulting sales increase over last year's numbers, according to an Oct. 19 Planalytics webcast.
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Starting with Black Friday and continuing through Christmas, the coming holiday shopping season will, as a result of better weather conditions than last year, show improved store traffic and a resulting sales increase over last year's numbers, according to an Oct. 19 Planalytics webcast.

Planalytics -- www.planalytics.com -- offers retailers and manufacturers a service that forecasts weather-driven changes in supply, demand and prices for products and services. The company points out that weather "profoundly influences consumer shopping patterns and is the major driver in year-over-year shopping patterns." It also points out that fall and spring are seasons with shopping patterns that are dictated by weather -- favorable weather triggers shopping behavior; while during the holiday season, weather influences shopping only in terms of time, type, place and means of shopping. Weather has little impact on overall sales numbers year-over-year as "Christmas always comes." Black Friday is the day after Thanksgiving and the official start of the shopping season, which can put retailers "in the black."

During the holiday season, weather influences shopping activity in terms of where and when. Rain in the west will keep shoppers out of stores, and snow in the east results in deferred shopping behavior. Overall, unfavorable weather like that during the holiday season results in a boost in Internet shopping. However, Planalytics also points out that if the weather is lousy early on in the shopping season, those shoppers in stores are there to buy, not just to look, resulting in higher conversion rates.

Looking back at last year, strong winter snow storms in the Midwest and East greatly impacted shopping traffic into stores during the first two weekends of the holiday shopping period. However, favorable weather, combined with the natural and increasing trend of procrastination by shoppers funneled sales into the last two weeks, resulting in a net increase in sales overall compared with 2002.

Looking ahead to this year, Planalytics believes that the weather will be better than last year, and it will be warmer (warmer is a relative term meaning it will still be winter and still cold, Planalytics points out).

What follows is a summary of the company's findings:

>> Store traffic will be up. The primary reason for this is that it does not foresee a major weather event like last year since back-to-back snowstorms occur only once every 25 to 35 years. As a result, there will be four additional shopping weekend days. Off the mall, Big Box retailers will reap the greatest rewards during the weekends of Dec. 4 and 11.

>> It considers this a high-margin year for seasonal apparel. Because apparel sales were relatively strong through October and weather was warmer, that should mean there will be less overall demand for seasonal apparel and more demand for non-seasonal apparel.

>> Internet shopping will be a wash primarily because the weather will be better. As a result, while Internet sales are increasing naturally, they will not be influenced as much in a positive direction this year by weather conditions.

>> Electronic toys and non-seasonal products will experience the strongest sales increases this year because of increased traffic and less need and desire for seasonal product and apparel.

Planalytics has forecasts for each of the weeks leading up to the holidays, showing an alternating up-down pattern. The week of:

>> Nov. 17 will be down 4 percent over 2003.
>> Dec. 4 will be up 23 percent over 2003.
>> Dec. 11 will be down 10 percent over 2003.
>> Dec. 18 will be down 16 percent over 2003.
>> Dec. 25 will be up 5 percent over 2003.

Overall, Black Friday weekend (the three days after Thanksgiving), which favors seasonal apparel, shows the most favorable weather-driven demand index since 1999.

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