By Steve Rowen, Partner
3/11/2008
RSR just conducted its special event webinar, “Creating Certainty in Uncertain Times: 10 Ways Retail Winners Survive and Thrive,” to help identify some of the best ways retailers can operate during a downtrending economy. If you missed it, both the presentation slides and the recorded event are available on our website.
Among the 10 points we discussed was how rethinking green initiatives makes good business sense – especially right now. Just yesterday, oil prices passed the $107 mark. According to the American Gas Association, energy prices are predicted to climb 4.5% annually for the next 4-8 years. Ecologically friendly events surround our industry, and greener products and services are on the lips of virtually every media source (and customer) in the nation. Not long ago, such measures were reserved for philanthropic companies and those who used “green” initiatives to win customer loyalty. Today, the moral truth remains: Global warming, carbon consumption and the perils of excess remain as important of issues as ever.
But what can retailers do to actually leverage the opportunity while dollars are tighter?
One thing that immediately jumps out is the ability for retailers to reduce their energy consumption at the store level. Stores can have a 40% swing in energy consumption from peak-usage to low-usage months. According to Kathy Montgomery, VP of Marketing at Prenova, something as simple as improper fan settings in stores can account for as much as 16% of wasted energy consumption, and can be controlled from a remote location. This is particularly important in quick service restaurants and retail locations that host a pharmacy environment, where fans are crucial. Yet often times, corporate governance is overridden by store employees. In fact, Montgomery insists that by knowing when fans and lights should/shouldn’t be on, retailers can devise unalterable parameters yielding a 2-8% gain in energy store costs immediately.
From an environmental standpoint, every standard unit of energy consumption (kilowatts per hour) requires 1.5 pounds of carbon dioxide. As a result, to lower the use of heat and electricity in stores is not only to save money, but to reduce your organizations’ carbon footprint. In fact, Prenova actually works with retailers to help them determine their energy profile and reduce their current carbon footprint, a tactic that retailer Mark’s Work Wearhouse touted the value of on a recent webinar hosted by Chain Store Age.
Mark’s did a proof-of-concept with the vendor beginning in 2007 in four of its stores across Canada. After 90 days, the weather-normalized stores saw a 20% decrease in energy consumption. The results were enough to convince Mark’s Work Wearhouse’s to roll out to 50 more stores.
Even for those retailers who’ve already begun to equip their stores with Energy Management Systems (EMS), results may still be less than desired. For example, in many stores, temperature regulation sensors are placed near loading doors, where temperatures can fluctuate widely during inventory stocking. Says Montgomery, “We often also see sensors that are placed near one another, and thus they compete. As one space begins to heat up according to standards, the second sensor detects that given their proximity, and the EMS commands the adjacent RTU(s) to kick into cooling. The sensors fight one another, and ‘High Runtimes’ result, which again really eats into kWh’s.” Further, “With a number of our retail customers, they sometimes put a rack of clothes right in front of a sensor. The sensor cannot properly read the air temperature, and thus the commands that the EMS provides to the RTU’s will be incorrect, thus causing inefficient usage.”
While much of this may seem like common sense, alleviating such simple store-based problems can be the start of a greener energy initiative that also saves cost during tougher times. As a result, we at RSR are currently planning to launch our first ever eco-based benchmark study, “What Can Green Do for You?” next week. Our goal is to understand how retailers are currently leveraging eco-friendly practices to their advantage, while also identifying which fundamentals of retailing stand to gain the most benefit going forward. We hope you participate in this first of a kind study, as this truly is an issue that benefits us all.
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