How to Profit From the Ultimate Big Data Source: The Weather

By analyzing a wealth of weather information, multiple industries can adjust inventories and marketing schemes based on the shifting winds of Mother Nature.

That itch in your throat and those watery eyes? Merck, which makes the allergy pill Claritin, anticipated your hay fever and--a year ago--started making plans to capitalize on it. With a subscription to specialized weather forecasts, Merck knew way back last July that this March would be unseasonably cold in most of the U.S., leaving many allergens dormant. Then, quite quickly, May would bring lots of warmth, pollen and spores.

Merck shared its weather intelligence, based on temperature and moisture data correlated to customer behavior by ZIP code, with Wal-Mart. Together they decided to boost promotions and supplies of Claritin and other allergy products at the time when you were desperately ready to buy.

"The upside is potentially millions of dollars in additional sales," says Debbie Sonnentag, Merck Consumer Care's director of category development for Wal-Mart.

Companies in all corners of the economy are factoring weather data into their business strategies, hoping to turn a profit on Mother Nature. Sears monitors weather nationwide from a crisis command center, figuring out how to stock enough snow blowers in a winter storm and air conditioners in a heat wave. Home insurer EMC Insurance analyzes hailstorm history to catch false claims. Westar Energy in Kansas schedules power-line repair crews with an eye on severe weather in other states, in case distant outages require their help.

DHL Express, a division of the $73 billion global delivery company, uses weather data to make minute-to-minute decisions that affect 3,000 flights per day worldwide. Weather, says Travis Cobb, VP of hubs, gateways and network control for DHL's Americas region, "is the million-dollar question."

Yet weathermen have a bad reputation for a reason: Getting it right is hard. The Weather Channel, for example, every day processes 20 terabytes of data about wind, rain, sleet, snow, temperature, tornadoes, air pressure, moisture, earthquakes, hurricanes, wave heights, lightning and ice, says CIO Bryson Koehler. And much more. Plus business customers can buy custom information created by analytics. Insurers might want to see rain accumulation modeled against auto insurance claims. Pharmaceutical companies can buy maps of air stagnation patterns to understand patient respiratory distress.

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