July 17th, 2015 in Financial/Insurance, Video

What Marketers Need to Know about California and El Nino

Developing a marketing weather strategy involves looking backwards (“how did weather impact my customers?”) and looking forward (“how will weather impact my customers?”).

Screen_Shot_2015-07-17_at_11.13.36_AMOn the predictive side of the equation, specifically in California, we’re looking at a situation that could develop into a major impact on consumers this winter and (especially!) spring.

Why do I think that? El Nino!

It’s back, it’s big and the business impact in California could be huge.

Looking Back

For historical perspective, the last time we saw an El Nino of this scale was in 1997 and 1998.

See:  El Nino 1997 – 98: The Climate Event of the Century

The impacts on California for that event were dramatic and the effects on business was huge.

Specific impacts of the the event included:

  • California Retail Sales: down 3 to 5%
  • Insured Losses: $1.7 billion
  • Fresh Produce Prices: up 5 to 8%
  • California (and Florida) Tourism: down 30%

Source: Impacts of 1997 – 98 El Nino Generated Weather in the United States

Of course, as always with these kind of events, there can be positive outcomes as well.

For California ski resorts the 97 – 98 event created “manna from heaven” with abundant snow in the lower third of US creating a huge benefit for the resorts.

See: How the El Nino Pattern Creates Snow in the US

Looking Forward

Current computer forecast models are pointing to “the strongest modern El Nino on record” with the peak of the event backloaded towards the end of 2015 and into the spring of 2016.

See:  Record Strong El Nino Ahead?

Screen_Shot_2015-07-15_at_10.25.41_AMFrom a weather perspective, strong El Nino years generally result in much wetter seasons for the west and southeast and relatively warm winters in the Midwest and northeast.

See: El Nino is No Bueno! Unless You Have a Weather Marketing Strategy

For consumers (and the businesses that serve them) that means the impact of weather on demand and sentiment could be almost exactly opposite of what we’ve seen over the last couple years: cold and wet in the west and relatively mild and less wet in the east.

From a planning perspective, therefore, marketers need to be thinking differently about how they communicate with consumers this year.

In California specifically, the effect of almost any rain this year (a relatively rare event recently) will be amplified and particularly impactful.

Retail, QSR, insurance and travel categories will be significantly impacted as people will be staying home and hunkering down at a frequency not seen in several years (at least).

Meanwhile, visits to ski resorts will be up significantly, driving major “lifts”in traffic during the winter and spring

Specific marketing strategies and tactics will be largely dictated by the type of businesses that are in the path of the storms generated by the event.

If you have questions or would like to learn how other companies are preparing for this event, drop us a not or give us a call HERE.

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