America's northeast is digging itself out from a major winter snowstorm that kept a lot of people at home on Tuesday. Soon to come will be many of the nation's public companies pointing to the snowstorm as a reason for why their earnings are bad.
One industry might not seem to have a proper excuse for winter storms hurting sales: e-commerce.
Earlier this week, we reported on company executives complaining about weather in their earnings conference calls. You'd imagine online shopping can happen from anywhere, so what difference does it make if people are at home versus at school or at work? On face value, it seems like there should be no effect at all.
But several data points prove that to not be true. The main reason really is that people are buying online much more when they are at work, rather than when they are at home. The impact of a storm means people can't go into the office to sit at their desk, login to their computer, and begin adding items to their cart.
Another issue: Winter storms create power outages, which obviously hurt online shopping. And when people are snowed in, they have to spend time shoveling themselves out. That's time that could have gone into 1-click buying.
Data from both Adobe Analytics and purchase analytics firm Cardlytics point to this effect.
Adobe Analytics says online shopping spend drops 5 to 6 percent on days in states where a storm hits, controlling for other factors like the size of the state, seasonal trends, weekday/weekend, etc.
In the case of a January 2016 winter storm affecting the U.S. Northeast and Mid-Atlantic regions, Adobe's data found a nice rule of thumb: For every inch of snow, there's a 0.1 percent reduction in online shopping revenue.
Cardlytics data points to a similar directional move. In cities that get affected by blizzards, the growth in online retail spend for the entire week is 4 to 5 percentage points lower than it could have been. Think of it this way: In the past couple years, a normal city without a blizzard would typically see 14 to 15 percent year-over-year growth in weekly online shopping revenue. But a city with a blizzard sees only 10 percent growth. That 4 to 5 percentage point difference is the effect of the storm. The numbers match up nicely with the Adobe data.
So when this earnings season comes around, and you hear online-heavy retailers blame the storm for their woes, don't immediately assume it's a bogus excuse. This one has real merit.