Light is an integral part of the business strategy of successful retail stores. Light is needed to provide the right mood for shopping, highlight items the store wants to sell, illuminate display cases and to create a unique identity in the shoppers mind.
“In the right light, at the right time, everything is extraordinary.”
Aaron Rose – photographer
Lighting electricity bills are an important component of a retail store’s cost structure. US Department of energy estimates that lighting bills make for 42 % of the electricity bills of US retailers.
According to the DOE Energy Information Administration, United States has close to 10 billion square feet of retail space. 90 Billion KWH of electricity is used every year by these mercantile establishments. Of this, over 37 billion KWH is spent on lighting alone. LED technology is revolutionizing the cost structure of retailing and are creating new paradigms in competitiveness.
Cost savings with LED Lighting
Starbucks has long been the source of next generation retailing strategies. Starbucks realized the importance of lower operating expenses. In a strategic initiative Starbucks has ensured that it will benefit from much lower utility and maintenance bills by shifting to LED lights. Starbucks has changed 1000 US stores to this energy efficient technology. It plans to switch 8000 stores globally to LED luminaries. The lower environmental impact of Starbucks stores besides significant cost savings and efficiencies made LED's a compelling proposition for this retailing giant. After all there are few cost cutting measures that can deliver more than 80% return on capital employed.
If the Starbucks example is anything to go by, retail stores can expect a 7 to 10% reduction in energy bills. A Philadelphia based 8000 square feet retail store that invested in LED lighting technology reported savings of $660.44 per month in electricity bills. These results are delightful but hardly surprising given that a 9 watt light can replace an 18 watt CFL or a 65 watt incandescent bulb. In per square foot terms annual savings will work out to around 7 KWh per square foot per annum or $ 0.7 per square foot (at $.10 per KWH). For a 10,000 square foot retail store energy savings could thus be close to $7000 per annum. For the 37 billion square feet of retail space that United States has this will work out to a whopping 26 billion dollars.
Commercial LED bulbs can help a store cut down on its lighting and air-conditioning costs and help reduce the carbon footprints of the store. They make a great investment because for every dollar invested in these cost saving lights, $10 or more can be saved over the life span of the bulb! These savings come from significant reductions in energy bills, air conditioning costs, replacement costs and maintenance. Calculations show that each par 65 bulb can potentially save $30 every year.
Food Retail Lighting
Food retailers have been particularly aggressive in adopting LED lighting solutions. Food retailers realize their cost savings not through lighting but through highly significant changes in refrigeration costs.
- Refrigerated display cases use a huge amount of electricity to cool food when incandescent bulbs and CFLs are used. LED's which emit very little heat, result in up to 60 % reduction in refrigeration costs.
- Besides heat another reason why food retailers do not like CFLs is because CFLs become inefficient at lower temperatures leading to lower light output and an unreliable lifespan. LED's, by contrast, are unaffected by lower temperatures.
- CFLs are also afflicted with the problem of mercury contamination. No food retailer can risk the breakage of fluorescent lights in a food display case with possible mercury contamination of food.
LED fixtures offer directional light – a great advantage when using it in display cases. Corporate exemptions and tax credits available to retailers who maintain energy efficient buildings are the crowning glory of these lights.
Light Quality and Customer Satisfaction
Light quality is vital for a retail store. Good quality lighting systems ensure that products are seen in their actual colors. Richard Kelly an architect and lighting designer, holds that “…Visual truth lies in the structure of light.”
Light from poor quality luminaries is deficient in some portions of the light spectrum and does not reproduce colors faithfully. Most shoppers have 'warm' lights in their homes. It is therefore best if the lighting in a retail store simulated the conditions under which they will see and use the product in their homes. Incandescent warm lights are inefficient, but with LED lighting that is indistinguishable from incandescent light retail stores have a friend that will not only reduce customer dissatisfaction but will also help save on electricity bills.
Point of Purchase Displays
LED point of purchase displays are cool to touch, use a tenth of the energy of incandescent and last almost indefinitely (approximately 30,000 hours). These are all valuable characteristics of a light bulb for a point of purchase display. They do not emit any UV light and help safeguard against any potential product damage resulting from exposure to UV light.
Accent lighting has long been a stronghold of halogen lamps – Not for long tough. Accent lights are important as they let stores highlight merchandise even in a high illumination setting as is common in departmental stores. Scientists at the lighting research center of the Rensselaer Polytechnic Institute have demonstrated that LED lighting coupled with 30% energy reduction in Accent lighting had a positive impact on customer perception of displays on several parameters.
Another advantage is that they are not as big as some compact fluorescent lamps and are easy to use either as retrofits or as new light fittings. These lights are also suited to custom lighting design projects that can give any store a one in a million look.
Want to Start Small?
Some business owners are cautious and like to take one step at a time. For retail store managers who would like to see the light quality and savings with their own eyes there are ways to achieve the both aims. Why not replace a few bulbs to begin with? You could even start at your home. Bulbs in the stair corridors are prime candidates for installing LED light bulbs. These are kept switched on 24 hours a day and cost savings for these lights are 3 times as much as those for other lights. Open areas like the lobby require much higher light levels – after all there are no walls to reflect light. These are also prime candidates for starting an LED Energy Efficiency Program. Retail stores that are large open spaces similar to lobbies will show similarly gains in efficiency over other lighting technologies.
LED products also help to significantly improve the store’s bottom lines. Operational effectiveness is mandatory and precedes strategies. They are rapidly becoming an integral part of the operational and marketing strategies of retail stores. These energy efficient and environment friendly lights can give any store the edge in terms of both costs and better store image that can set it miles ahead of its competitors. In this era of strong competition, environment consciousness and green business strategies it is only a matter of time before every single retail store will have to shift to energy efficient commercial LED lighting solutions. When it comes to adopting this energy efficient technology the question is not 'Why' but 'When'.
Want to see how much LED can save you? Click here to try our new and simple to use Energy Savings Calculator