The Weather Channel has collected over 75 years of data including, temperatures, dew-points, cloud coverage, and more, across North America.  Weather Channel has renamed itself Weather Co. to reflect the strategic importance of its digital-data business. Weather Co. gives information to smartphone weather apps and also sells data to advertisers who want to fine-tune their message to customers.

Weather Co. knows that people check the weather before they go do something.   The company believes that it is getting better at knowing the kinds of things that people plan based on their location and what the weather is in that location.   For example, Weather Co. learned that consumers in Dallas buy insect repellant when the dew point is below average, while customers in Boston buy insect repellent when the dew point is average.  Company researchers also found that the first day of above-average heat in Chicago yields the highest sales of air conditioners, while customers in Atlanta sweat it out for two days.

Pantene is using this information for its own benefit.  When launching its new Pantene Pro-V Smooth with Argon Oil products, Pantene partnered with Weather Co.  When a consumer checks her smartphone app and is greeted with a forecast of humidity, she also sees an ad for the new Pantene product.

Weather has long influenced the retail economy and sold forecasts to airlines and energy traders.    But now, with the smartphone app, the firm can get even more data about customers.  The digital business now accounts for 50% of Weather Co.’s revenue.

Other examples of retailers using this data include Ace Hardware and Michael’s.  If it is sunny outside, Weather Co.’s consumers get an ad for Ace’s lawn-care services; if it is snowing, customers receive an ad for snow removal tools   Michael’s knows that its customers engage in crafts on rainy days.  Weather Co. found that the sale of crafts spiked three days before rain was predicted.

Now, Weather Co. is studying the impact of weather on customer mood and sentiment.

Discussion Questions:

1. Why are retailers partnering with the Weather Channel?

2. How is customer buying behavior influenced by the weather?

 

SOURCE: Katherine Rosman, August 15, 2013, Wall Street Journal