Tips For Analyzing Precipitation
Ok, so a lot of talk, how then to begin to properly analyze precipitation? The easiest place to start is with the weather report (112) named Weather Precipitation Histogram By Zip Code / Week and combine it with a Sales By Store (30) report or a YOY Sales By Item / Store / Week (56). The 112 report is great because it gives you the number of days with precipitation % in buckets from 0-100% for each zip code and aligns it to your retailer's week (regardless of whether their week ends on a Friday, Saturday or Sunday). Report 30 is good because it gives you store totals with zip codes. Report 56 is also nice because it gives you store / item level by week. Our goal is to match up the week in question by store, using the zip code. Caution: you may be tempted to view sales for all your items. While this may be appropriate for some customers, we suggest starting with an item you have a high belief is impacted by rain patterns. So start with just one or two items in either report 30 or 56. Also, you may be tempted to run a report for the entire country - we suggest using the insight panels to identify specific regions of the country where rain has been identified and use those regions as subsets rather than the entire country - the report data will be smaller and there will be less data to confound you. Remember - rain is temporal, and highly local - so make your impact analyses regional and defined short time periods with discreet items and you'll fare much better.
With these reports - we recommend making a webquery and getting them into Excel to do some vlookup and compare performance and rain values. We've seen some customers combine the precipitation bucket values to create their own larger buckets - for example - combining any precipitation value > 70% and calling that rainy. This is where Excel works best, this is also what webqueries are for (getting the data to Excel and refreshing easily) so use them!
Once you have these two or three reports in Excel you can then begin looking for a correlation (either positive or negative) to increasing number of rainy days and decreasing sales performance during the week in question and vice versa!
Technical Definition of Precipitation % - Directly from the National Weather Service
Forecasts issued by the National Weather Service routinely include a "PoP" (probability of precipitation) statement, which is often expressed as the "chance of rain" or "chance of precipitation".
ZONE FORECASTS FOR NORTH AND CENTRAL GEORGIA
NATIONAL WEATHER SERVICE PEACHTREE CITY GA
119 PM EDT THU MAY 8 2008
INCLUDING THE CITIES OF...ATLANTA...CONYERS...DECATUR...
119 PM EDT THU MAY x 2008
.THIS AFTERNOON...MOSTLY CLOUDY WITH A 40 PERCENT CHANCE OF
SHOWERS AND THUNDERSTORMS. WINDY. HIGHS IN THE LOWER 80S. NEAR
STEADY TEMPERATURE IN THE LOWER 80S. SOUTH WINDS 15 TO 25 MPH.
.TONIGHT...MOSTLY CLOUDY WITH A CHANCE OF SHOWERS AND
THUNDERSTORMS IN THE EVENING...THEN A SLIGHT CHANCE OF SHOWERS
AND THUNDERSTORMS AFTER MIDNIGHT. LOWS IN THE MID 60S. SOUTHWEST
WINDS 5 TO 15 MPH. CHANCE OF RAIN 40 PERCENT.
What does this "40 percent" mean? ...will it rain 40 percent of of the time? ...will it rain over 40 percent of the area?
The "Probability of Precipitation" (PoP) describes the chance of precipitation occurring at any point you select in the area.
How do forecasters arrive at this value?
Mathematically, PoP is defined as follows:
PoP = C x A where "C" = the confidence that precipitation will occur somewhere in the forecast area, and where "A" = the percent of the area that will receive measureable precipitation, if it occurs at all.
So... in the case of the forecast above, if the forecaster knows precipitation is sure to occur ( confidence is 100% ), he/she is expressing how much of the area will receive measurable rain. ( PoP = "C" x "A" or "1" times ".4" which equals .4 or 40%.)
But, most of the time, the forecaster is expressing a combination of degree of confidence and areal coverage. If the forecaster is only 50% sure that precipitation will occur, and expects that, if it does occur, it will produce measurable rain over about 80 percent of the area, the PoP (chance of rain) is 40%. ( PoP = .5 x .8 which equals .4 or 40%. )
In either event, the correct way to interpret the forecast is: there is a 40 percent chance that rain will occur at any given point in the area.