Heat domes, flash floods, wildfires, droughts, hurricanes and tornadoes are escalating in frequency and intensity, disrupting consumer demand and supply chains — and that’s raising concerns that retailers aren’t doing enough to mitigate the impact of climate change.
Retailers must rethink investments in stores, particularly in coastal towns where Mother Nature strikes the fiercest. In 2005, when Hurricane Katrina devastated New Orleans, hundreds of thousands fled to Houston. El Niño will lift global temperatures to record levels this year into 2027 as warmer temperatures in Pacific spread around the world.
“We’re getting better and better every month on this,” said Michele Wlazlo, chief executive officer of JCPenney, in an interview. “We really have localized targeted assortments, whether it’s for people who experience extreme cold weather or people who experience extreme heat. And we update our stores distribution” as the weather patterns change. “But year-round, we carry clothing for all climates on our website. So early in July, there’s outerwear on the website. We won’t put that in stores yet, but online we offer, regardless of need, swimsuits year-round, outerwear year-round, coats and scarves year-round. Jcp.com year-round provides for you when there’s a special need due to an extreme case of weather, but we’re not adjusting our merchandise based on a catastrophic event. What we care the most about when there’s a big event is, ‘How can we help the community?’”
Retailers are getting nimbler managing inventory and markdowns in response to weather changes, said Kelly Pedersen, partner and global retail leader at PwC.
“But I don’t think many of them are really plugged into a lot of weather data,” he added. “There’s a lot of technology out there to hook into weather forecasts for your planning. Apparel retailers are still at the early days of this; groceries are more advanced. We’re getting to the point where AI software development is much cheaper, much faster, so there are big opportunities for apparel companies to rethink how they’re using this technology.
“We now have the ability to build what we call an ‘always-on consumer insights engine,’ or a ‘commercial brain’ to help trend spot and predict upfront, based on data,” added Ali Furman, PwC’s consumer markets industry leader. “Some of this technology didn’t even exist five years ago, like predictive markets data and public APIs on social media channels that you can plug into and build models around and suck the trends out.”
“There is a maturity curve here,” said Evan Gold, executive vice president of global partnerships and alliances at Planalytics, which helps retailers plan for weather changes and quantifies how weather impacts business. “The most mature businesses measure and proactively account for climate and weather in their systems and processes to drive value and improve operations. Some retailers are proactive on an ad hoc basis when they are able to do so. Others are only measuring the impact for reporting, although they have not yet become ‘proactive’ in addressing a changing climate. The least mature do nothing on an organizational basis.”
“You just got to be ready for different types of climate with different types of dressing. Look to versatile dressing and layering,” said Mark Breitbard, CEO of Gap brand, which offers cooling and temperature-regulating apparel that dries quickly, breathes and is moisture-wicking.
Uniqlo offers Airism, a collection of light, smooth innerwear, T-shirts and casualwear designed to be cool-to-the-touch, moisture-wicking and fast-drying. Columbia Sportswear utilizes proprietary Omni-Freez Zero technology, which uses special polymer rings embedded in the fabric that react with sweat to pull heat away from the body. Nike Aero-Fit offers high-crimp yarn for breathability, anti-cling characteristics and greater airflow that more conventional athletic wear.
Retailers say that denim — the most ubiquitous fashion category — can be worn all year-round since it’s breathable, though it’s not particularly comfortable during extreme heat or cold, or wet weather. It readily absorbs water, and dries slowly so it feels damp and uncomfortable. Heavy denim traps heat easily due to its dense twill weave.
To stay more relevant in extreme weather conditions, it’s recommended retailers:
“I see retailers, particularly players with scale, 10 to 15 miles from everybody in America, using their parking lots as destinations for medical support, food and water in the event of natural disasters like hurricanes or floods,” Furman said. “Retailers do plan and buffer against disasters especially now in hurricane zones. They’re stocking extra water, flashlights, things like that. There’s a big effort around that.”
According to a whitepaper on climate change coauthored by the National Retail Federation and Planalytics: “By proactively including weather analytics into demand forecasting, dynamic pricing models and personalized marketing campaigns, retailers can optimize inventory management and customer satisfaction. These innovations enable retailers to respond swiftly to changing weather conditions, ensuring that the right products are available at the right times.
“Furthermore, supply chain optimization through predictive analytics can prevent disruptions and maintain the seamless flow of goods, even during adverse weather events,” it continued.
“The path to climate proofing retail lies in embracing technological advancements and innovative planning strategies. By staying ahead of weather-related challenges and committing to sustainable practices, retailers can protect their businesses from the impacts of a changing climate and thrive in the future where adaptability and resilience are keys to success.“
As science and climate writer Eric Niiler wrote this year: “The past 11 years have been the hottest since record-keeping began. Last year was either the second or third hottest on record, depending on which record is used, with global average temperatures 1.43 degrees Celsius higher than pre-industrial levels. The year 2024 was the hottest, at 1.55 degrees Celsius above the pre-industrial average.”
Planalytics estimates that more than $1 trillion in global retail sales are directly impacted by a volatile climate and weather each year. “In the U.S., we experience one extreme weather event, defined as those causing at least $1 billion insured losses, on average, once every three weeks. In the 1980s, this was experienced once every four months,” Gold said.
Asked what retailers should do to minimize the impact of extreme weather, Gold said: “Start by measuring/quantifying how much weather and climate impacts the business across all areas of the retail enterprise. Once measured, retailers can identify areas to be proactive like planning, allocation, replenishment, marketing and operations.”
According to Planalytics statistics, better forecasting can reduce the amount a retailer “throws away” by up to 35 percent annually, while having the right amount of inventory in the right place and at the right time can drive 2 to 6 percent annual improvements in net income by reducing lost sales and improving product availability.
“If you walk in our stores 12 months a year, the bulk of what you find you can wear all the time, and then you get these moments where you have extreme heavy sweaters or swimsuits or tank tops that come in,” Wlazlo. said “Our seasonless assortments have been stronger for awhile now. But people still want to start to wear autumnal colors in the fall, and bright, happy colors in the spring.”