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Whether Weather Matters: Impact of Exogenous Factors on Customers Channel Choice

Part of the Springer Series in Supply Chain Management book series (SSSCM,volume 8)

Abstract

Many customers today shop across multiple channels. Previous literature has documented the importance of endogenous factors, such as retailers’ operational strategies, new store openings, and customer demographics on customers’ channel choice in an omnichannel setting. In this paper, we shed light on the impact of an exogenous factor—weather conditions—on retailers’ B&M store and online sales as well as on customers’ channel choice. Using online and B&M store data from a worldwide winter apparel retailer and daily weather and climate normals data at the zip code level, we find the following: (1) Negative (positive) temperature deviations, i.e., cold (hot) days, lead to a significant increase (decrease) in sales both for online and offline channels. The effects are stronger for the offline channel. (2) Cold days induce customers to migrate to the offline channel, whereas hot days and snowy days lead them to purchase through the online channel. Moreover, our findings indicate that although weather significantly affects retailers store traffic and sales, retailers’ staffing practices are suboptimal; they understaff on cold days and overstaff on hot days. We also discuss the implications of our findings for retailers’ omnichannel strategies.

Keywords

  • Omnichannel retailing
  • Quasi-experimental methods

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Notes

  1. 1.

    WeatherSource.com provides high accuracy weather data using OnPoint weather technology. For more information, see [https://weathersource.com].

  2. 2.

    NOAA provides climate temperature normals for 7501 weather stations in the United States. The selection is more limited than the GHNCD-Daily data set.

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Gallino, S., Karacaoglu, N., Moreno, A. (2019). Whether Weather Matters: Impact of Exogenous Factors on Customers Channel Choice. In: Gallino, S., Moreno, A. (eds) Operations in an Omnichannel World. Springer Series in Supply Chain Management, vol 8. Springer, Cham. https://doi.org/10.1007/978-3-030-20119-7_10

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