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Ruth Favela
By Ruth Favela
Ruth Favela
Ruth Favela
Ruth Favela is Tomorrow.io's AI Marketer. She draws on over 5 years of experience as an editor, writer, and social media manager for AI startups, B2B SaaS, and B2C products. In her role, Ruth focuses on using AI tools to create customer-first content for the various industries Tomorrow.io has solutions for. She writes about weather innovations, AI/ML modeling, weather API applications, weather AI use cases, and much more.
Jun 3, 2024· 4 min, 21 sec

How Walmart Can Solve For Weather Impact Before Q3 Earnings

    TL;DR:

    • Walmart’s Q2 earnings call highlighted strong performance but potential weather impact for Q3.
    • With resilience tools, Walmart can enhance eCommerce growth, inventory management, and pricing strategy with weather predictions.
    • Optimizing delivery services and automation tools can improve operational efficiency.
    • Tomorrow.io’s resilience platform can help Walmart address growth goals and challenges effectively.

    Walmart’s recent Q2 2024 earnings call on May 16, 2024, highlighted the company’s strong performance, with a focus on eCommerce growth, inventory management, and value pricing.

    However, as Walmart looks ahead to Q3, the company must also consider the potential impact of weather on its operations and financial performance.

    During the earnings call, President & CEO of Walmart, John R. Fumer, mentioned that March was a strong month, partially due to favorable weather conditions, stating, “It was helpful in the quarter to have Easter early and strong weather in March that gave us a strong early start, and these businesses we call omni services like tire installation as we mentioned earlier, having your prescription ready via ordering online or cake decorating, these are all great services that are relatively unique to Walmart…”

    Walmart CEO’s comments underscore the direct influence weather can have on Walmart’s sales and operations.

    Given the detailed growth goals and potential struggles mentioned in the earnings call, Tomorrow.io’s resilience platform can offer tailored solutions to enhance Walmart’s operational efficiency, customer satisfaction, and strategic decision-making. ‎

    Here’s how:

    Enhancing eCommerce Growth and Convenience through Weather Predictions

    Tomorrow.io can provide hyper-accurate weather data to optimize store fulfillment and fulfillment center operations, ensuring that adverse weather does not disrupt the supply chain or delivery schedules.

    This could be particularly beneficial for maintaining the promise of on-demand early morning and same-day deliveries across the 6,500 global locations.

    Shipt, a leader in the last-mile delivery space is already using Tomorrow.io to reduce weather-impacted shipping delays by 10.4%. The improvements could be transformational for Walmart.

    Walmart HQ on Tomorrow.io’s Resilience Platform

    Inventory Management Improvements

    By leveraging Tomorrow.io’s advanced AI and proprietary modeling capabilities, Walmart can better predict weather-related demand shifts, allowing for more disciplined inventory management. This could lead to lower markdowns due to overstocking and a more favorable business mix, enhancing margin flow-through as desired.

    Supporting Pricing Strategy with Weather-driven Demand Insights

    Tomorrow.io’s insights can help in understanding weather-driven demand patterns, enabling Walmart to strategically plan rollbacks and value offerings. This can ensure that promotions are timed with weather-related demand spikes, maximizing sales and customer satisfaction.

    Expand Walmart Luminate with Weather Analytics

    With accurate weather data, many things are possible. Walmart has an opportunity to integrate Tomorrow.io’s weather insights into Walmart Luminate for operations in Mexico and Canada, which could provide a competitive edge by leveraging technology and innovation. This would enable more accurate forecasting of consumer behavior influenced by weather conditions, aiding in business growth.

    Optimizing Delivery Services for Enhanced Customer Convenience

    Tomorrow.io can help in optimizing logistics for the new on-demand early morning and same-day delivery services by providing precise weather forecasts. This ensures that weather disruptions are minimized, improving customer satisfaction and loyalty.

    Automation and Digital Tools Enhancement

    The integration of Tomorrow.io’s weather intelligence into Walmart’s automation and digital tools can further widen competitive advantages. This could support sales and margin objectives by minimizing weather-related disruptions and optimizing operational efficiency.

    Addressing Merchandise Mix and Margin Challenges

    Tomorrow.io’s insights can aid in better understanding and predicting shifts in consumer spending towards nondiscretionary categories due to weather events. This can help in adjusting the merchandise mix proactively, addressing the headwind to margins.

    3P Marketplace Growth and General Merchandise Comps

    By providing detailed weather analytics, Tomorrow.io can help Walmart better manage the impact of 3P Marketplace growth on general merchandise comps. Understanding weather-driven consumer behavior can offer a more holistic view of performance from a total GMV standpoint.

    Walmart Trends

    At the end to the call, analyst Chuck Grom from Gordon Haskett Research Advisors, asked if there are any trends being seeing in general merchandise.

    CEO John R. Furner replied, “Mix has changed, but it hasn’t changed that much. We’ve seen growth in both brands and private brands. March was a strong month, given Easter was in the month. We had leap year in February that was also helped to make it stronger. So the phasing of the quarter wasn’t all that surprising. It was strong in February, strong again in March, weather was favorable in March, a little bit colder and then April was softer without Easter in it. But we walked out of the quarter into the month of May with similar trends that we’ve been seeing.”

    Furner’s response about the impact of weather leading to a strong quarter tells us that with hyperlocal weather insights, Walmart could leverage Tomorrow.io to further build their resilience and innovate in spaces that matter.

    Building Resilience for Walmart With Tomorrow.io

    Tomorrow.io’s resilience platform can play a pivotal role in addressing Walmart’s growth goals and challenges by leveraging weather intelligence to optimize operations, enhance customer satisfaction, and make informed strategic decisions.

    To learn more about how Tomorrow.io can help Walmart build resilience and drive growth, visit www.tomorrow.io or contact our team at [email protected].

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