Fred Fox of Weather Planalytics explains how to use big data to understand how weather really impacts your business
Fred Fox is the founder and CEO of Weather Planalytics, a company which created the business of Weather Intelligence Analytics — the study, development and commercialization of weather analytics for business. His clients are companies and NGOs who seek to better understand the impact of weather related events on their business. Not hurricanes or one-off events, but rather, the ordinary course of weather.
Fox is the holder of weather analytics- related patents for Weathernomics. His motto: Don’t Just Blame it on the Weather.
Most companies are surprisingly unaware of the impact of weather on their business. Retailers, shippers, and other firms whom you would expect to have at least a passing awareness of weather impact have only at best a rough generalization.
What does it mean for retailers if rain accumulation is 12 percent higher this Spring? How does a mild Winter precisely affect transportation companies? Perhaps most surprisingly of all, what impact does nice weather have on online sales?
Fox points out that without accurately measured base lines, anytime weather gets blamed it is simply excuse-making. He advocates developing a corporate weather history in order first understand your baseline weather factors. Only after you have done that you can make reasonable assessments when future weather related events occur.
A retailer who blames snow in February doesn’t get much empathy from the media or analyst community; however, if when a retailer points out the prior 4 Februarys had 10 inches of snow versus this February where 48 inches of snow accumulated, is at least making a fact-based argument using actual, verifiable data. Planalytics gets granular with the data to the point where they can make a reasonable forecast for how much X amount of snow will impact the month’s and quarter’s sales.
Some of Fox’s favorite books are found here.
Next week, we speak with Quantitative Finance expert Paul Wilmott.