Enjoy the Holiday Gift of Reduced Energy Costs Year-Round

Will retailers’ holidays be happy this year?

Yes, but…

On the plus side, more than half of U.S. shoppers surveyed by McKinsey (55 percent) feel excitement about the prospect of buying holiday gifts. Still, surging energy costs have the potential to drag down retailers’ bottom lines during the important holiday period — amplifying the impacts of inflation and a possible recession.

Moreover, as much as retailers might like to reduce energy use, during the holiday season it can be extra hard for brick-and-mortar stores to maximize sales. For that reason, staff will redouble their efforts to ensure that every location is comfortable and well lit — enticing shoppers to come in, browse, and buy.

Now, though, is a vital time to build good energy usage habits and systems for the future. Retailers should consider one, auditing their current processes and equipment and, two, exploring new technologies, such as the Internet of Things (IoT), to bolster teams’ energy management efforts.

Start With the Fundamentals

What does an effective energy audit look like? Retail facility managers should:

• Inventory existing equipment, such as HVAC and lighting controls: Identify which are functioning in top form, which can benefit from a quick fix or tune-up, and which equipment is approaching obsolescence and should be replaced with more energy-efficient models. Update maintenance management or work order management systems to triage and queue up projects — e.g., replacement of outdoor air dampers that are getting so old it’s hard to close them in the winter.
• Educate staff on concrete ways to optimize energy use, such as adjusting HVAC and lighting set points by the time of day/night.
• Be alert to deviations from current energy-saving protocols: Retailers may notice that their teams aren't telling management about equipment performance problems — and even overriding heating/lighting controls that aren’t working properly.

Resolve to Automate

When a retail facilities manager is responsible for dozens or hundreds of stores, a “physical audit” isn't enough. For example, a location that looks airtight on the surface could be bleeding money because of an equipment problem that technologies, like the IoT, are likely to uncover much sooner than a person would.

Management at one major retailer, for example, couldn’t understand why the energy bills in a single location were so high. The culprit was a malfunctioning switch in a new HVAC system, which was preventing the air conditioning system from powering down. The company used the IoT to pinpoint the problem and the source, and then was able to fix it.

IoT solutions enable retailers to control, monitor and automate the performance of their HVAC, lighting, irrigation and other equipment. This equipment data empowers management to preempt or stop energy waste. Management can also use the solutions to automate energy-saving processes so that staff aren’t responsible for them and can concentrate on their customers.

In addition, retailers are using the IoT to:

• Reduce demand charges: These charges account for the amount of energy businesses use during peak demand periods. Depending on the region and time of year, they could comprise 20 percent or more of a business’s energy bill. As a result, IoT systems are helping retailers stagger heating or cooling equipment when demand is highest, making sure some air conditioners and heaters will power down at specific intervals, for example.
• Discover other hidden sources of waste: The IoT enables retailers to connect virtually any equipment, including doors, which helps stores discover other “breaches,” such as keeping outside doors open in cold or hot weather.
• Automatically adjust systems in response to utility alerts about shortages, outages, etc.

Machine learning systems are amping up the benefits of these approaches — integrating with IoT solutions to analyze which equipment combinations are operating most efficiently. By tapping into new processes and technologies like these over the next several months, retailers can enjoy the gift of savings for many more holidays to come.

Jason Roeder is senior director of product management at Powerhouse Dynamics, a leading provider of Internet of Things (IoT) solutions for multi-unit retailers, restaurants and other commercial organizations.