Simple and Smart Solutions Make a Big Difference in R&M Operation Cost

Retail businesses, specifically in the 'brick and mortar’ segment, constantly need innovation to attract new customers and retain existing ones. Retailers who do not innovate nor renovate often fail.

This dynamic industry requires constant innovation, with new technologies to better understand customer behavior, inventory control, and providing exceptional customer experience while shopping in a store.

The idea is to fulfill customers' emotional needs. Not all retail companies understand the importance of innovation, nor do they have the means to do it, maintaining an old business format that does not make sense in today’s diverse generation.

It has been 17 years working in this industry. Specifically, materializing different store design concepts creates a commercial space where the customers identify and feel belonging. The main objective is creating a 'story' to provide the desired customer shopping experience.

The retail business is more complex than we think. There is a lot behind the scenes, such as product design, sourcing and planning, quality control, logistics, information technology, brand alignment, solid corporate administration to support the business, etc. The combination of all these with the services at the store level is the main component for the success of a brand. It is hard to say which has more weight. If the product is not good, no matter what you excel in, the results will not be satisfactory. Amazing product design with good quality without the other components will not succeed either. The product, store concept, store overall services/vibe, and music have all to align with the client.

The ‘brick and mortar’ will not disappear with the online business, as many thought. It is still strong and provides major support for online businesses by allowing physical customer interaction. As a comparison, the store works like a cellular tower, influencing the online business around it.

In order to offer an exceptional customer experience, the store has to be well maintained, good looking, comfortable air temperature, required lighting, clean aspect, and overall finishing condition in good standing. 

Sustainability is very important, especially nowadays. From the construction and maintenance standpoint, we have learned over the years that small initiatives without heavy capital investment could improve results on the overall operational cost.

The energy cost in our stores now represents around 30 percent of our overall building R&M operation cost. Ten years ago, it represented almost 50 percent of the overall cost.

The lighting system is the number one component in energy costs. Store lighting is active on average 11 hours per day, over 362 days per year. In 2013, our average store consumption was on average 46,000 Kwh/year/store. Over the years, we have taken many initiatives to reduce energy consumption without affecting the brand. Ten years later, our average store consumption dropped to 21,800 kWh/year/store.

Among the initiatives, we have introduced LED technology that contributed to substantially reduced kilowatt consumption and consequent overall expenditure. With this initiative, we have reduced 30 percent of the overall consumption of Kwh/year without compromising any visual presentation.

The HVAC system comes in second place in energy consumption costs. Due to a lack of basic knowledge/understanding of how it works, most facility management teams neglect the proper way to maintain and operate the system. Unfortunately, for many property management teams, this is a black box! Once mastering the basic principles of an HVAC system, it becomes a piece of cake. Excluding the HVAC system controlled by the mall building management system, we have come to a simple solution, using an affordable Wi-Fi thermostat technology, which provides remote control with programming, set schedules, temperature set points, alert messages, and humidity levels. It does not require a high investment in an energy management system designed for bigger properties.

This simple solution provides the required control of the HVAC operation system from the user's standpoint, avoiding energy waste. The store staff/users do not have control of it; rather, the maintenance team is in a remote location.

Street stores achieved substantial energy savings, especially during the spring and fall seasons, when stores normally leave the main door open to the outside to attract customers, causing a loss of heat or cooling.

Our experience shows remarkable results in energy conservation and consequent cost reduction. After ten years, our energy consumption dropped from CDN $ 1.3 million/year to CDN $613 K/year for the same number of stores.