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Statistical Data Analysis

Why is weather data important to companies?

When IBM paid a reported $2bn plus for The Weather Company last year, a few eyebrows were understandably raised but a year on and the mist is starting to clear a little. Although it was always obvious that weather data lay at the heart of the decision – particularly the potential for it when you consider the developing autonomous vehicle industry – there was still a sense of what more could it do? Was there anything else in the pot? Like any acquisition, the acquired have to start justifying the price tag, a little like a star footballer being under pressure to perform and justify a large transfer fee, so it’s perhaps not surprising that the business is in launch mode again.

A gathering of existing and potential customers at IBM’s Southbank offices next to the River Thames in London in August got a glimpse of a new Operations Dashboard for Retail, a sort of weather and traffic command centre for shopkeepers. It joins the growing list of industry-focussed weather data products the business is pushing and according to EMEA MD Alex Rutter, the retail dashboard is a direct response to customer demands.

Retailers, it seems, want to understand more about how weather affects shopping habits in different regions and across different shop locations. On the surface, the idea seems a little like garnish, great to look at but not completely necessary and then you see the numbers. Rutter talks about one retailer (which incidentally was a key reason behind the company developing the dashboard) and how a store lost out on around £1m ($1.3) in potential sales because it didn’t predict the recent warm spell in London. Also, according to retailer Next plc, which released a trading statement in early August, the better than expected weather in June and July this year boosted sales by nearly seven percent.

For Rutter and The Weather Company this is fertile ground. Logistics too. The Weather Company’s Beth Padera cited a National Academies of Sciences, Engineering and Medicine statistic that 28 percent of crashes and 19 percent of fatalities are apparently weather-related. Transport also makes sense, given this stat, particularly airlines.

“We’re taking Watson into the airline industry to cut the workload of pilots in pre-flight briefings,” says Rutter, revealing a new product to be launched later this year. He wouldn’t give any more details but this is a first for the company, using Watson beyond its advertising business.

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Marc Ambasna-Jones

Marc Ambasna-Jones is a UK-based freelance writer and media consultant and has been writing about business and technology since 1989.

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