Business Editors
"It will give retailers a headsup on the weekend' explained Scott Bernhardt, senior vp-manufacturing and retail for Planalytics. if the short-range weather forecast calls for a mild fall weekend in a typically cold climate, local residents might decide, en masse, to recoat their driveways. Demand might also be prompted by an end-cap promotion of driveway sealer.With an accuracy rate of 75 percent for analysis made a year in advance, Planalytics can sometimes miss the mark. Last month, Sears was expecting a cold spell that never materialized in the North Central states. Rand, Sears' merchandiser, could also use better information on precipitation. "I'd like to know how many inches of snow are coming," he said, only half in jest. But overall, Rand said he is pleased with Planalytics' reports, which he can now make available to his regional vps through a Web-based browser.Planalytics, which also provides services to agricultural and energy suppliers, targets multistate retailers with revenues of $100 million and up. Farm and fleet retailer Tractor Supply with $690 million in 1999 sales uses Planalytics to keep tabs on the climates in its 28-state trading area.Planalytics attaches a "weather favorability" number to seasonal products that takes into account past sales history in a particular location. Some of the more obvious examples in the home-centered channel are patio furniture, garden chemicals and space heaters. But other candidates include power washers, interior paint and humidifiers. Using Planalytics' favorability numbers, merchandise and logistics managers can factor the weather into their supply chain.Using a model that analyzes historical sales data and future weather trends, Sears can determine -- with a certain margin of error, of course -- consumer demand for certain products in different geographical regions. If a cold snap is expected for a certain sales territory, Sears can make sure those stores have plenty of car batteries and warm outerwear in stock. "Two years ago, during the summer of 1998, a lot of retailers ran out of air conditioners," Rand recalled. "We didn't.""Millions of dollars in merchandise, interest and holding costs can result from one [bad] decision," said Jonathan Rand, director of merchandise information for Sears. For the past five years, the nation's fourth-largest retailer has used impact weather forecasting to help plan its warehouse shipments, particularly with seasonal merchandise. "Usually our national buys don't vary much from year to year," Rand explained. "Store allocation is the issue."Smaller retailers who can't afford Planalytics' services needn't be left out in the cold. Those willing to try their hand at weather-impact forecasting can always log onto to weatherplanner.com, a free Internet service that provides moisture and temperature ranges for different geographical regions up to a year in advance."We're a seasonal, weather-driven business, and the weather is very different in the southern part of Texas than in North Dakota," said Blake Fohl, vp-advertising and marketing for the Nashville, Tenn.-based dealer. Tractor Supply uses weather-favorability reports to adjust inventory levels and determine the timing and steepness of markdowns. The information supplied by Planalytics also helps Fohl decide on where and when to place advertisements.Ron Robinson, Chief Executive Officer of Alamo Group, commented, "Schulte is a good fit with Alamo both from a product and geographic point of view. Further, the acquisition gives us manufacturing capabilities in Canada, which we plan to use for continuing Schulte production, as well as to help expand Alamo's overall penetration of the Canadian market."
This release contains forward looking statements that are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward looking statements involve known and unknown risks and uncertainties, which may cause the Company's actual results in future periods to differ materially from forecasted results. Among those factors which could cause actual results to differ materially are the following: market demand, competition, weather, seasonality, currency-related issues, and other risk factors listed from time to time in the Company's SEC reports. The Company does not undertake any obligation to update the information contained herein, which speaks only as of this date.
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