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03/07/2022

Automating Sustainable Business Practices: The Power of IoT

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For retailers, maximizing sustainability is no longer an aspiration; it has become a business imperative.

Major brands across industries are routinely delivering sustainability reports as investors evaluate their operations against ESG (Environmental, Social, and Governance) standards.

Consumers are actively driving these companies to change. For example, the Simon-Kucher & Partners Global Sustainability Study 2021, surveying more than 10,000 people, found 85% of consumers are evolving their purchasing behavior so that it’s more sustainable. 

[Related: 5 Retailers Ranked ‘Most Sustainable' in 2022]

With the proceedings of COP26, the 2021 United Nations Climate Change Conference, providing further impetus, businesses — and their investors and customers — continue to prioritize efforts to slow global climate change by shrinking their carbon footprint. Separately, they’re also looking to conserve natural resources that are being affected as the earth’s climate changes.

Reducing Costs While Helping the Planet

Retailers are already at the vanguard of these efforts. In addition to improving sustainability, these companies are looking to reduce expenses, knowing that energy is often one of their highest controllable costs. 

For example, a few years ago, one national specialty retailer piloted an energy-saving initiative across 20 stores, quickly saw a cost reduction, and extended the program to more than 1,000 locations — saving more than $2 million per year in utility costs as a result.

How did the company accomplish this? They used Internet of Things (IoT) technology to move their strategies forward.

IoT enabled them to connect with (digitally or through wireless sensors), monitor, and control their equipment such as their HVAC systems and lighting across their stores, all from a central mobile device. By “listening to” and “communicating with” this equipment in real-time, they uncovered hidden sources of energy waste, automated more sustainable business processes, and saved money. 

Waste Reduction, Starting on the Roof

This retailer started at the top — on the roof, that is. They remotely controlled their Rooftop HVAC Units (RTU) using a smart thermostat to keep customers and shoppers comfortable when stores were open and reduce heating/air conditioning use when they weren’t. When the technology detected deviations in power consumption or supply air temperatures, managers would immediately receive email alerts to order equipment maintenance and continue optimizing energy usage.

From Data to Action

This company also discovered that just because nothing appears amiss (yet), a system may or may not be running well. Facility managers and others responsible for 100 or more stores can’t afford to be satisfied with the status quo. Their top and bottom lines — and the planet — benefit from their proactive approach to plugging every leak.

IoT gives them the data they need to take action — whether that means replacing an old rooftop unit with a newer high-efficiency unit, or converting fluorescent lights to LEDs faster. 

For another multi-unit concept, data flagged excessive energy use at a single location. That site had installed new HVAC equipment with a stuck switch that no one had noticed until IoT pointed to an anomaly. 

IoT technologies are also helping retailers avoid capital equipment repairs due to sudden failures. For example, if data shows that an air conditioning system is consuming 20% more power than it has before, it’s time for a service call. In addition to keeping the system out of landfills, this preventive maintenance improves retailers’ financials. Connex research has revealed that proactive servicing often costs one-third of the price of a reactive repair.

Correlating Savings and Sustainability

These newer technologies deliver savings and can also be correlated with impact measures that shareholders and customers will readily understand.

A multi-site brand in an adjacent industry, for example, tapped into IoT to monitor its irrigation systems across hundreds of locations. The company saved more than 7.4 million gallons of water in a year. This was equivalent to the water in more than 11 Olympic-sized pools — an analogy everyone can visualize.

Other larger research projects are also demonstrating these benefits. For example, one analysis showed that using IoT, 5,000 retail and restaurant locations prevented 80 million tons of CO2 from entering the environment when they reduced energy usage by 161 million kilowatt-hours.

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Headshot Jay Fiske

Retailers are known for their innovations to keep customers close. IoT is adding to their toolbox of solutions to improve their financial health and the health of our planet and retain stakeholders’ loyalty.

Jay Fiske is president of Powerhouse Dynamics, a provider of IoT-based solutions to connect, analyze, and control equipment — including SiteSage, used by major multi-site retailers. Contact him at [email protected].

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