Energy Usage in the Retail Industry

According to a Wall Street Journal article, light-emitting diode also known as LED light bulbs are changing the face of luxury stores worldwide. Designers from Bulgari to LVMH have started using these light bulbs to save energy because LED bulbs use less energy than traditional bulbs. Bulgari’s store in Rome’s Via Condotti, reduced its energy use by 50% while Fendi's store in Naples lessened 35% of energy use. Since LED bulbs are energy-efficient and use less light, they reduce the demand from expending power plants as a light source. 

ERA knows how to reduce the cost of energy expenses not only in large commercial and industrial applications, but also in the retail sector. ERA energy expert Gray Campbell, who has more than 26 years of experience in energy cost negotiations, says for retail establishments, lighting and HVAC (Heating, Venting and Air Conditioning) are the largest contributors to the energy expense and have the most opportunities in reducing costs. 

To the retailers' advantage, there is little incentive to cut costs for stores located in indoor malls unless the store is sub metered and charged a pro-rata share of the overall expense. Malls charge for energy as part of the additional expenditures the mall management incurs and divides among the leaseholders. Independent analysis by ERA of these ancillary charges can uncover misapplied demand charges and energy charges, leading to reduced costs and possible refunds.  

For independent shops and destination stores, utility bills are typically in the name of the store. Additionally, retail stores use the energy for lighting and creature comforts. To reduce the cost of energy, Campbell suggests that stores use programmable thermostats to adjust the temperature higher or lower depending on the weather. Using LED lighting and ensuring that lighting fixtures are properly aimed to balance the overall lighting, also reduces excessive energy usage, as well as eliminates hot spots and overall cost. ERA works closely with companies offering a host of these products and can evaluate their effectiveness in a retail establishment.   

ERA Director Randy Mackay, who has extensive experience in the retail industry also believes energy is a huge deal. He says the first step in reducing energy cost is to appoint a management individual to be responsible for energy use. This individual will monitor and report usage at each site, and establish best practices and recommend investments and improvements that will reduce the cost of energy operations. There are also some simple and inexpensive initiatives that retailers can start immediately, such as installing motion detector switches on stockrooms, offices, training rooms and break rooms, and by controlling the time of day when the escalators and lighting turn on. Mackay also points out that most retail stores do not even have a system to heat their building. When they need to heat the building, stores turn on the lights thus controlling lights often translates to controlling cost.   

ERA consultant Jim Schmitt believes LED lighting is a mainstream technology that can save customers huge dollars, but a thorough understanding of the savings versus the upfront investment is critical to sound decision making. He says it is important to fully understand a store's utility costs and equipment that are in place. Things to consider before using LED lighting are the type of utility tariff the store operates, the amount of hours and days the light is switched on, and knowing the cost to maintain current lighting. Schmitt believes recent developments with LED lighting can reduce energy consumption from 25% to 75% of existing levels, but it is critical to evaluate current energy costs before making major decisions.   

Lighting plays a substantial role in energy use for many luxury brands. The lvmhlighting.com website even states, "Optimal lighting is the powerful gleam that radiates the splendor and aesthetics of beautiful products.” In short, using the wrong forms of lighting not only harms the environment, but can also affect a brand's sales results.

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