When it rains, it pours? The impact of weather on customer returns in the brick-and-mortar retail store

Abstract

With the increase in weather's unpredictability, the retail industry has been actively integrating weather data to make more informed decisions. However, knowledge about the impact of weather on customer returns is limited. It is crucial to understand customer return behavior so that companies could design strategies that are beneficial for both the business and its customers. In our study, we explore the role of weather (weather types and temperature) in shaping customer return behavior. Transaction data from 328 brick-and-mortar retail stores situated in 56 cities across China were analyzed using ordinary least squares regression. The results demonstrate that rainy days, in comparison to cloudy ones, reduce the likelihood of customers venturing out to make returns. Additionally, we observe that extreme temperature conditions, whether excessively cold or hot, also deter customers from initiating returns. However, the impact of weather on returns is subject to variations introduced by different return channels and holiday periods. Together, our research demonstrated a novel factor that impacts customer return. With the ever-dynamic symphony of the weather, this research broadens the scope of weather's influence on consumer behavior to encompass the domain of returns, while providing valuable implications for retailers to respond to weather-related fluctuations in customer return behavior.