How the Change in Seasons Can Affect Your Clients’ Spending Habits

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Wednesday, June 22nd, 2016

According to the British Retail Consortium, after the national economy, the weather, particularly the change in seasons, has the biggest influence on consumer spending. It not only affects an individual’s emotional state, but also drives their purchase decisions. Changes in the weather were found to even influence the amount that consumers were willing to spend. Studies have shown a correlation between weather patterns and consumer purchase behavior on three levels, purchase methodology, consumers’ emotional state, and their subsequent product choices.

For those who shop in brick and mortar stores, it is easy to understand why a dry, sunny day would increase foot traffic and revenue. Or that a period of inclement weather would spike online sales. One study found that wet or cold weather increased online sales by up to 12% with most of the spend going for home goods, furniture and clothing.

It is also important to understand that buyers generally fall into two categories, recreational and those shopping for necessities. The spending habits for both will be influenced by seasonal changes. Studies have also shown that exposure to sunlight will increase the number of impulse purchases. As a result, many retailers use bright halogen or LED lighting in their stores to mimic sunlight and influence consumer spending.

Supermarket and department store chains are particularly aware of consumer spending habits as influenced by weather changes. The first warm days will trigger sales for sodas, juices and seasonal items such as outdoor furniture. Conversely, a premature cold snap will spike sales of soup, hot cereals and lip balm.

Why Consumer Spending Habits Fluctuate

Retailers also do brisk business during the last quarter of the year as there are more events and holidays. In other seasons, they must depend on promotions and sales and clever merchandising to generate interest, foot traffic and revenue. The first quarter of the year, retailers may post losses after the holiday season, due to cold weather throughout much of the country. Businesses who benefit from Valentine’s Day gift giving will fare well, but most retailers rely on promotional sales until the warmer weather arrives, and with it promotional opportunities for Mother’s Day, Father’s Day, Memorial Day and Independence Day.

While actual weather patterns can influence consumer spending, many companies undergo periods where business is more plentiful than at other times of the year. For example, in the Northeast during the warmer weather, many construction businesses that excavate, pour foundations, build structures, roofers, masons, paving and other contractors are busy. During the winter months, construction projects are limited to interior finishing and renovation work. This ‘slow season’ not only impacts the revenue that this industry generates, but also affects the spending habits of its workers and their families.

Geographic areas with a high percentage of consumers whose heads of households work in the construction trades and other seasonal businesses, must be aware of this. They will need to position their marketing and promotions to respond to the times of the year when their business revenues will be impacted by their demographics’ seasonal profit fluctuations. Being aware of consumer demographics, and seasonal business upticks and downturns helps retailers and other ecommerce businesses establish patterns and to implement successful marketing campaigns.

Be aware of your clients’ spending habits. Know when they are likely to spend and when they cannot. Learn how to address these revenue peaks and valleys. As these may impact your business’ cash flow, speak with your financing advisor for guidance on how to position your business so it can weather seasonal fluctuations well.

As a leading alternative financing company, National Business Capital assists businesses obtain the additional capital their enterprises require. In this blog series we provide information of value to many of the industries that we serve. For business owners, especially those who are or who serve consumers with seasonal businesses, please contact our Business Consultants at (888) 888-9124 with your business financing questions.

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