Why Retailers Should Embrace Energy Management
Energy management is vital for organisations in all sectors, but especially retail. Whether you operate high street stores, out-of-town big box retail park locations, or anchor properties in large malls, efficiently managing and reporting energy use is important for retailers looking to reduce operational costs, boost sustainability, and stay competitive.
In this blog post, we’ll be exploring the benefits of energy management for retailers, as well as practical strategies for reducing energy consumption and achieving long-term success.
What Are the Benefits of Energy Management for Retail Businesses?
Energy management offers retailers practical ways to meet sustainability goals, reduce environmental impact, and lower operational costs. Let’s jump right in and take a look at some of the key benefits:
Saves Businesses Money
Effective energy management can lead to large cost reductions for retail businesses. With a well-implemented energy management programme, retailers can reduce energy consumption by 10-30% through operational improvements, which translates to direct savings on utility bills.. These savings free up capital, allowing retailers to invest in other areas that can help drive growth and enhance customer experience.
Elevated Brand Reputation and Customer Loyalty
Consumers increasingly favour businesses with strong sustainability practices, especially in recent years. As a result, retailers that prioritise energy management often find a competitive advantage. Sustainable brands have been shown to outperform the market by 120%, which highlights the value of green practices in driving consumer loyalty and attracting eco-conscious shoppers. By wholeheartedly committing to energy-efficient practices, retailers can demonstrate that they’re serious about sustainability – and not just engaging in greenwashing – which can help to increase brand loyalty and customer retention, especially in environmentally-conscious segments.
Resilience in Economic Downturns
The global economy is experiencing a slowdown, with inflation higher than in decades. Businesses that have good energy management programmes tend to be more resilient in tough economic times by minimising energy costs and operating more efficiently and sustainably, they can minimise the impact of fluctuating energy prices and achieve a leaner cost structure. Data shows that sustainable brands are more likely to maintain or increase sales during a recession, providing a cushion that helps them navigate difficult periods more effectively than less sustainable competitors.
Contribution to Environmental Goals
Energy management is a vital tool for retailers to align with environmental regulations while addressing their significant role in global emissions. Retail operations account for approximately 25% of global emissions, with much of this impact stemming from the value chain. In the UK alone, the retail industry spends over £3.3 billion annually on energy and is responsible for around 215 MtCO2e of emissions, highlighting the sector's environmental footprint.
The urgency of reducing emissions has never been clearer. The Earth is already about 1.2°C warmer than it was in the late 1800s, and emissions continue to rise. To limit global warming to 1.5°C - the target of the Paris Agreement - emissions need to be cut by 45% by 2030 and reach net zero by 2050. By implementing energy management practices such as real-time monitoring, energy audits, and optimisation strategies, retailers can reduce energy consumption and carbon emissions, ensuring compliance with these critical goals. Beyond avoiding regulatory penalties, such efforts position retailers as leaders in the global push for sustainability, meeting the expectations of consumers and stakeholders alike.
Retailers adopting energy management practices can thus significantly contribute to broader climate goals. And with many companies now viewing sustainability as essential to their brand identities, with over 90% of CEOs today claiming that environmental stewardship is fundamental to success, energy management can offer a direct, actionable way to achieve this. By integrating energy-saving tech and best practices, retailers can help meet global sustainability targets while appealing to both internal stakeholders and eco-conscious customers.
Energy Management for Street Shops vs Malls: What’s the Difference?
Energy management strategies vary significantly between standalone street shops or big box stores and retail spaces within malls or strip malls, mainly due to differences in control over energy consumption and the operational environment.
Street Shops and Big Box Stores
Retailers owning standalone stores or big box buildings have full control over their energy consumption. These stores are responsible for managing building systems such as HVAC, lighting, and other energy-intensive equipment, giving them the ability to implement comprehensive energy initiatives. With this level of control, these retailers can achieve energy reductions of 20-30%, presenting significant opportunities to reduce operating expenses and enhance margins.
Malls and Strip Mall Stores
Retailers in leased spaces within malls or strip malls have limited control over energy consumption, typically managing only HVAC and lighting systems. The remainder of the building’s energy use is usually under the landlord's purview. As a result, retailers in such spaces can only achieve partial energy reductions, typically between 10-25%, translating to a total potential reduction of 3-10%. Collaborating with landlords on shared energy initiatives may help unlock additional savings.
What Are the Most Effective Ways to Track and Reduce Energy Consumption in Retail?
There are several different ways retailers can go about tracking and reducing energy consumption:
Conduct Energy Audits
Regularly assess energy consumption to identify inefficiencies and areas for improvement, such as outdated equipment or poorly optimised systems.
Optimise HVAC and Lighting
Implement energy-efficient lighting like LEDs and optimise HVAC systems based on occupancy and usage patterns to reduce waste.
Implement Automation and Smart Controls
Automate energy-saving actions, such as adjusting lighting and temperature settings based on real-time needs or store schedules.
Set Energy Benchmarks and Goals
Use collected data to establish performance benchmarks and create measurable energy reduction targets for ongoing improvement.
Invest in Energy-Efficient Equipment
Upgrade to high-efficiency appliances, refrigeration, and systems that consume less energy while maintaining performance.
Install Smart Energy Monitoring Systems
For retail businesses, installing smart energy monitoring systems is essential to reducing costs, meeting sustainability goals, and staying competitive. At Infogrid, we offer a cutting-edge energy management solution that simplifies tracking, reducing, and reporting energy usage across retail portfolios.
By leveraging advanced technology and machine learning, Infogrid automates the collection of real-time data from electricity, gas, water, and HVAC systems, providing actionable insights to identify inefficiencies and drive measurable reductions in energy use.
Our platform goes beyond tracking by enabling businesses to create and manage sustainability plans, optimise equipment performance, and monitor progress across properties. With the reporting tools, retailers can showcase financial and environmental impacts to stakeholders, while features like smart alerts and workflow integrations ensure opportunities for energy savings are acted upon.
This comprehensive approach not only reduces operational costs but also helps retailers meet carbon reduction targets at scale, making Infogrid an essential partner in achieving impactful energy and sustainability goals.
Final Thoughts
Effective energy management is a game-changer for retailers, providing opportunities to cut costs, improve brand reputation, and drive sustainability efforts. With the growing demand for eco-conscious practices, integrating energy-saving solutions is more important than ever.
Using technology and adopting energy-efficient systems, retail businesses can not only reduce their environmental footprint, but also strengthen their position in the marketplace - even in challenging economic times.
Save Your Retail Space Money and Carbon With Infogrid
Ready to take control of your energy consumption? Infogrid offers cutting-edge energy management solutions that simplify tracking, optimising, and reducing energy usage across your retail portfolio. Start saving money, boosting sustainability, and improving operational efficiency. Book a demo today!
About Noda
Noda is a data and analytics company on a mission to make every building smarter, more efficient, and more sustainable. Recently ranked in the top 10 tech companies leading the charge on climate action, its AI-powered suite of products surface unique insights that empower real estate teams to reduce costs, decrease time spent on routine work, and find and act on opportunities to save energy and carbon. Discover how Noda's solutions can unlock the potential of your assets and accelerate the transition to net zero. Visit us at noda.ai to learn more.