The 2017 Atlantic hurricane season has been extremely active. We’ve seen multiple strong storms make landfall on the US mainland, as well as island territories such as Puerto Rico and the US Virgin Islands. These storms have brought destruction and disaster to communities large and small. Efforts to rebuild are underway, and home improvement retailers have been bringing their A-games to rebuild their local communities.
One way that retailers can help to rebuild is by ensuring that they have items that the community will need in stock. When a known natural disaster is about to strike, retailers set up command centers and ship additional inventories to their stores. Generators, lumber, gloves, water, and many other products see major increases in sales in the period when major weather events strike. By examining past TraQline generator sales data on geographic regions, unit shares, price paid, and other buyer considerations for generators, retailers can get a head start on planning for next year’s hurricane season—or any other major weather events, for that matter.
Natural Disasters Drive Demand
Irma affected areas produce 60% of Sales for the Quarter
During quarters with major hurricanes, there are naturally increases in the areas where the hurricane made landfall. But what is the magnitude of these changes? In Q3 2017 TraQline data reflecting sales made after hurricanes Harvey, Irma, and Maria, 60% of all units sold came from the US census’ South region. This region covers states that expected or received massive rainfall and wind damage from the storms, such as Texas, Florida and North Carolina. For comparison, the 10-year average for unit share of Generators coming from the south is just under 40%. In particular, Florida’s unit share for generators jumped to 31% for Q3 2017, up significantly from 11% in Q3 2016, and from their 10-year average of 8%
Hurricane Sandy: Nearly half of all generators in NE
Historically, similar trends emerge for the Northeast after Hurricane Sandy made landfall. 48% of units were sold in the Northeast, where Sandy made landfall. New Jersey, which was badly hit by the storm, increased its unit share of generators to 15% in Q4 2012, up significantly over Q4 2011 (10% unit share), and over its 10-year average of 4%. (Note: While large, the Q4 2012 amount doesn’t display the same statistical significance due to Q4 2011’s Halloween Nor’easter snow storm.)
Big Boxes pull ahead in Big Storms
As consumers flock to purchase a generator in advance of a weather event, big name outlets with regional warehouses and high stock levels like The Home Depot and Lowe’s benefit while Independent Power Dealers are hurt. Both Home Depot & Lowe’s saw significant increases in units sold in Q317 compared to Q316, during the time that Hurricanes Harvey and Irma hit. Conversely, Independent Power Dealers overall saw a significant drop in their units sold (12% vs 18%, for the same time period). 2011’s Winter Storm Albert, although smaller in scope than recent hurricanes, caused a directional increase in Home Depot’s share of units sold in Q412 over Q411 (from 24% vs 20%, respectively). Independent dealers saw their unit shares drop to 14% from 17% as well.
Any Price in a Storm
Cost is almost always the primary concern in the purchase of generators. However, in an emergency, convenience becomes a more important factor for consumers who need a generator, while cost becomes less important.
Hurricanes Harvey & Irma
After Hurricanes Harvey and Irma, only 50% of consumers in Q3 2017 (a significant decrease, as compared to 66% in Q3 2016) said that they chose the outlet where they bought their generator because its pricing was competitive. There was also a significant increase in consumers who chose the outlet because they were already buying other products there (20% vs 7% for the same time period).
After Hurricane Sandy, Q4 2012 saw a similar, directional decrease in the importance of pricing when choosing an outlet, dropping to 63% from 67% in Q4 2011. Outlets being conveniently located was also an important factor in Q4 2012, raising to 29% from 16% in Q4 2011.
When disaster strikes, prepared retailers can help get their communities back on their feet faster and more efficiently. Using tools like TraQline allows retailers large and small to gauge what their communities have needed historically in order to be prepared for the future. Retailers, what other steps have you taken to keep your communities resilient in the face of natural disasters? Let us know by tweeting us @TraQline, or dropping a message on LinkedIn.
As areas that were affected by this year’s intense hurricane season are rebuilding, consider helping these communities out by donating to charities such as the Hurricane Harvey Relief Fund, One America Appeal, or the Hispanic Federation.