No hype: The new driver in retail is hyper-efficiency

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Remember the debate over e-commerce versus brick and mortar?

It didn’t last long.

Instead of rival efforts, online and in-person selling quickly became complementary strategies. And that model soon gave way to omnichannel retailing, which delivers a seamless customer experience across all platforms – physical space, e-commerce, mobile applications, and social media. Today, 73% of shoppers say they move across multiple channels when they shop. [1] And with information gleaned from customers at each touchpoint, retailers are able to create a more personalized and engaging shopping experience.

COVID-19 – and the changed demand-supply requirements that the pandemic ushered in – kicked the omnichannel trend into overdrive, forcing retailers to adapt and in some cases totally reimagine how they do business. With automation and artificial intelligence (AI) going from nice-to-haves to must-haves, industry experts now expect to see at least 70% of retailers adopting AI in the next two years. [2] Recently, Walmart reported an earnings increase of 2.8%, thanks to AI and automated processes. [3]

It’s easy to understand why.

Digitization, the backbone of AI and automation, enables retailers to reach customers and cultivate loyalty like never before. Technology also allows new levels of operational efficiency. For example, when grocers learn from AI that frozen snacks sell best on Fridays, they can stock those items accordingly in their warehouses. At the same time, a store’s automated systems can monitor and control refrigeration temperatures based on varying stock levels throughout the week. That’s important because overcooling by even 1ºC can increase energy consumption by as much as 3%. [4]

For apparel, fashion, and luxury goods retailers, AI and automation are equally important, allowing them to create a high-touch, personalized in-store ambience and then parallel that experience with unique online customer engagements, as well.

The challenge of being everywhere

A well-orchestrated omnichannel strategy is a game-changer in today’s retail marketing efforts. But to deploy such a strategy, especially during COVID-19, businesses must navigate their share of challenges, including:

• Constrained budgets: For most retailers, the urgent need to invest in digitization, IT infrastructure, AI, and automation is occurring against a backdrop of low or no foot traffic in stores, and muted sales overall.
• Operational challenges: With dropping sales and reduced cash flow, retailers must operate more efficiently while doing more with less, a challenge that is exacerbated by the need to rethink an existing business model.
• Sustainability demands: Millennials and Gen Z expect the companies they engage with to be socially and environmentally responsible, while norms and regulations around sustainability are becoming increasingly stringent. Accordingly, beyond words, a retailer’s commitment to corporate responsibility must be reflected in ongoing operational actions and documented results.
• Resiliency logistics: From a global pandemic to climate change calamities like floods and fires, disruptive world events demand that companies adopt new ways to survive and thrive, including controlling their operations remotely.

Efficiency redefined

At the core of the omnichannel retail trend is the need for efficiency in all aspects of operations. That means optimizing the supply-chain, minimizing waste, and creating a memorable experience at every customer touchpoint without increasing costs – indeed, while cutting costs, if possible. At Schneider Electric, we call this “hyper-efficiency.”

Toward that end, a key strategy for retailers to incorporate into their omnichannel adaptation efforts is energy efficiency, since energy consumption is a significant part of operational costs for all types of retail establishments. For restaurants, the greatest energy expense comes from cooking, water heating, and refrigeration. For convenience stores, it’s refrigeration, lighting, and space heating. And for non-food retailers, it’s lighting, cooling, and ventilation. In every case, the operating cost of these activities exceeds two-thirds of a retailer’s overall energy expense. [5]

To underscore the impact that energy consumption has on the bottom line, consider this: most retailers operate at a 4% profit margin. A 15% reduction in energy use will increase their profit margin to 4.75%, which represents an 18.7% increase in profitability. [6]

Retail reinvented

Because energy consumption, inventory management, and the customer experience are so tightly interwoven in retail operations, optimizing one inevitably involves the other two, necessitating a holistic approach. That’s where EcoStruxure for Retail comes in. Schneider Electric’s end-to-end solution of connected products, sensors, controls and software is designed to give retailers visibility and control of energy use and other functions across their entire retail value chain. They can capture critical data about every aspect of their operations, convert the data into meaningful analytics, and drive action through real-time information and business logic.

With EcoStruxure for Retail, business owners are able to reduce cost and boost revenue. Freed up from tasks that are now automated, employees can devote more time to customers, in-store and online, which results in a better shopping experience. And in physical locations, EcoStruxure for Retail helps create a comfortable, engaging retail environment, improving lighting, air quality, and safety.

EcoStruxure for Retail can touch and improve just about every aspect of a retail operation, including:

  • HVAC control
  • IT infrastructure
  • Power distribution
  • Lighting control
  • Emergency lighting
  • Security
  • Traffic intelligence
  • Refrigeration control
  • Microgrid
  • EV charging

EcoStruxure for Retail is a comprehensive platform for an omnichannel retail world. Even better, because the solution is modular and scalable, retailers can adopt and deploy capabilities as budgets permit, which is especially helpful during uncertain times.

A digitized, hyper-efficient world

For retailers who to want to embrace their industry’s new digitized, hyper-efficient world, EcoStruxure for Retail by Schneider Electric not only provides the end-to-end connected solution they need to perform proper operational monitoring, analytics, and improvement across all their platforms. It also optimizes energy use and increases efficiency to save them money while advancing their commitment to sustainability.

Learn more about EcoStruxure for Retail.


5. U.S. Energy Information Administration
6. “A $3 Billion Opportunity: Energy Management in Retail Operations,” Schneider Electric and RILA

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