Smart Buildings
Overhaul your outdated retail energy management tech stack
The UK has seen a huge boom in its ecommerce market with 83% of its population preferring to shop online.In order to capitalize on this trend, the retail industry has also been making huge investments to enable online shopping. In addition to heavy investments on customer data and analytics, Retailers have also partnered with robotics and digital twins to streamline their supply chain.
However, the physical retail sector has been struggling, especially in 2023.Besides the threat of a looming recession and decreasing customer spend, the industry has also seen a spike in energy costs leading to a huge price inflation. And a huge reason behind this is energy costs. In particular, food retail has been hit hard as refrigerators tend to be huge energy guzzlers.
The electricity costs in the cold storage sector have doubled, from £560.6 million in 2021 to an estimated £1.1 billion in 2022. This coupled with outdated and inefficient refrigeration, HVAC and other electrical equipment have been adversely affecting the bottomline leading to heavy losses for retailers.
To counter this, retailers have been increasingly investing in tools and solutions aimed at achieving energy efficiency and sustainability. However, despite these efforts, most of these tools do not provide the much needed visibility that retailers need to affect change. Only a tech-led single pane of glass retail energy management tool that covers every corner of a retail store can help in optimizing your store operations.
This approach can drive digital transformation by bringing both front-end and back-end store operations together and help reduce energy costs and carbon footprint. By doing so, retailers can better address the high energy costs, reduce their carbon footprint, and attain their long-term sustainability goals.
How retailers can kickstart their journey to sustainability
Here is how retailers can ensure that their energy efficiency and sustainability goals are aligned with their business objectives:
Step 1: Evaluate
According to McKinsey, energy audits conducted on retail stores reveal chances to decrease energy consumption by up to 50%. This can have an impact on the bottom line similar to that of a 5% increase in sales.
To embark on the journey of optimizing energy efficiency, it is crucial to thoroughly assess every store, department, and appliance at various times of day, locations, and seasons.
Step 2: Monitor
The thing about energy leaks is that they are not always obvious. A lead in some obscure corner can go undetected for long periods of time adding accumulated dollars to your bills. To effectively curb energy spend, retailers need to first understand their energy consumption patterns.
One effective approach to tracking energy consumption is to set up a resilient Internet of Things (IoT)-enabled system that can monitor energy usage in critical areas like refrigeration, HVAC, and lighting. This technology provides real-time insights into the performance of energy assets, revealing patterns that could go unnoticed with traditional methods.
Step 3: Choose the Right Technology
Before embarking on their energy savings journey, you need to choose the right technology. Check if your tool of choice ticks these boxes before making a purchase:
Interoperability: Ensure that the tool can integrate seamlessly with your existing systems to collect data, provide insights, and automate optimizations.
Relevance: The tool should not only be another data tool, but should also come with pre-existing workflows and KPIs that are designed to accelerate energy optimization.
Scalability: As large retailers have thousands of stores running hundreds of thousands of devices of different sizes, your tool should be able to scale up and down to cater to the dynamic needs of an evolving retailer.
Immediate returns: In the competitive and turbulent economy of today, the right tool should be able to deliver immediate results. Even if it produces small returns initially, it should be able to deliver quick wins and build on them over time.
Step 4: Enable Long-Term Savings
The pursuit of energy efficiency in the retail industry requires continuous efforts that adapt to the changing needs of the business. Automate workflows that turn devices on and off based on usage and schedule audits to detect malfunctions or breakdowns in appliances based on their usage, age, and location. Use remote fault detection and diagnostics (FDD) to speed up issue resolution.
The retail industry in the UK is currently facing significant challenges, with constant pressure from all fronts, despite government support. To navigate this turmoil, retailers can benefit from implementing a platform-led retail energy management system that operates on the cloud. By incorporating a well-designed technology layer that integrates with existing assets, retailers can see returns immediately.
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