Real-Time Data, Real Savings

It’s often said that companies must spend money to make money, and this is true of investments in energy efficiency. The key to securing resources for capital expenditures is using data to create a business case for the investment, which can identify anomalies or outliers in resource expenses across the chain.



One example of using data to help make the case for efficiency investments is Saks Fifth Avenue, which leveraged energy data to ring up $500,000 in energy savings.



The luxury retailer, which operates more than 110 stores in the United States, believes that good lighting and comfortable stores are vitally important to create a unique shopping experience. Creating this experience meant sparing no expense, which ran contrary to the idea of energy efficiency and sustainable business operations. However, customer and stakeholder expectations pushed the retailer to find ways to reduce energy consumption while retaining its brand vision.



To gain insight into its energy usage, Saks partnered with Ecova, a total energy and sustainability management company, to look at historical utility data to explain how minor changes in consumption, demand and price could cause massive annual expense shifts in different operational regions.



Once this baseline was established, a granular project breakdown form illustrated precisely how every piece of an energy-efficiency project would affect energy cost. The net savings then was compared with the baseline energy data already established. Once this kind of granularity was proven, the company’s finance team was completely supportive of the projects.



LED retrofit: Undertaking an efficient lighting retrofit was a major decision for Saks, which is very particular about the lighting color in its stores. The marketing and design team participated in various tests and surveys to understand what type of lighting they envisioned inside their stores. One prevalent misconception was that LED lights did not resemble the warm natural glow of halogen, nor did the design resemble the flat-lens parabolic aluminized reflector (PAR or PARCAN) lamp counterparts because of the visible diodes.



After testing various commercial LED lighting products and touring manufacturing facilities to understand how lamps were made and tested, Saks finally found a small handful of LED products created specifically for high-end retail applications, matching halogen par lamps as much as possible. A full-store mock-up confirmed that the Saks Fifth Avenue brand’s exclusivity would remain untouched.



Saks Fifth Avenue became one of the first luxury retailers to do a companywide LED retrofit project. After the retrofit, they again analyzed energy usage data to quantify actual savings (and still use that data to monitor continued expenses). The project has provided energy savings of more than $1 million to date. Since 2011, on average, participating stores have reduced their annual energy consumption by 23%.



“I cannot overemphasize the importance of data,” said Gary Levitan, senior manager of energy and utilities at Saks Fifth Avenue. “Use it to establish baselines and illustrate how minor changes can affect the bottom line. Then provide breakdowns of how each component of a project directly affects this baseline. Finally, use data to quantify savings and create more equity with the decision makers of your company.”



George Huettel is a business solutions director of Ecova, headquartered in Spokane, Washington.