There is no shortage of advertisements focused on collecting tax refund dollars, from consumables to higher ticket items such as automobiles, retailers want refund dollars, and they are not afraid to ask for it. Tax season is an excellent opportunity for retailers to capitalize on returns to drive sales. In fact, IRS data shows that 8 out of 10 US taxpayers get a refund averaging just under $3,000. That’s a measurable spike in the available discretionary budget. For 2016, the National Retail Foundation’s annual tax survey paints a concerning picture. Half, 49.2% of those who get a refund, plan to save, not spend, the money. While some splurging is projected, consumers are expected to be less indulgent than in the past.
While many factors contribute to spending confidence, the weather plays a larger role than you might expect. Unlike an average spring season, the 2016 impact of El Nino is long reaching. As a result of the cooler, wetter weather across much of the south, consumers are not exhibiting typical “spring” behavior because it doesn’t feel like spring.
Why then are we trying to market the same way as always? While general tax season advertising will appeal to the small percent of splurging consumers, the majority of refund recipients plan to pay off debt and save. To capitalize on what remains, and perhaps edge out a little of that planned savings, our marketing will benefit from a broader strategy that takes advantage of peak purchase behavior. The key is to identify not only when tax dollars are hitting mailboxes, but when consumers are most apt to spend those dollars. Research shows the weather plays a huge role in a consumer’s overall mood and buying propensity.
Here lies a little sunshine in an otherwise dreary retail forecast. Every day won’t be gloomy this spring. Smart marketers will leverage breaks in the weather to execute time-sensitive campaigns that more effectively attract refund dollars by leveraging the heightened state of optimism brought on by clear days.
Best of all, retailers don’t have to go it alone. The Weather Company uses its extensive weather intelligence to enable marketers to anticipate better and influence consumer decision making. WEATHERfx uses geographical and historical weather data, sales data and predictive analytic models to deliver automated targeted and triggered media. The platform makes it easy for marketers to capitalize on the impact weather volatility has on consumer behavior and minimize the adverse effects of low tax refund spending.