How to drive efficiencies across the retail estate in 2024 and beyond

The retail landscape is a challenging environment globally, marked by the rising of costs for goods, inflation, energy, and labour. It’s vital, now more than ever, for retailers to base their decisions on data, and to take proactive measures rather than make costly reactive decisions founded on incorrect data.

In economically unstable times, where well-known retail brands can vanish from the high streets seemingly overnight, the risks associated with a poor decision making can be catastrophic.

Given the economic climate, consumers are exercising caution in their spending habits, impacting retail sales. Consequently, retail businesses are compelled to thoroughly analyse their expenses to safeguard profit margins. Among the most significant expenses for retailers are property portfolio maintenance and energy consumption.

Facilities management in retail

Facilities Management (FM) in the retail environment is a vital aspect of every retail business. It ensures that spaces and equipment are safe, compliant, and in working order for both customers and employees.

Manual FM processes operated via emails and spreadsheet tracking are time consuming and lead to high risk and cumbersome operation, ultimately costing the business time and money.

Impacts of a manual FM function

Time-consuming processes

Manual FM functions often involve repetitive and lengthy processes that require significant time investment. Tasks such as logging maintenance issues, scheduling repairs, and updating records are labour-intensive, diverting resources from more strategic activities.

Multiple manual workflows updating multiple spreadsheets

Managing facilities manually typically involves various workflows that rely on updating multiple spreadsheets. This fragmentation can lead to inefficiencies and errors, as data must be entered and tracked across several documents, making it difficult to maintain consistency and accuracy.

Lack of visibility of equipment status and responsibility

Without an integrated FM system, there is often a lack of visibility into the status of equipment and clarity about responsibility for repairs. This ambiguity can lead to unnecessary repairs being performed on equipment or buildings still under warranty or managed by another party, resulting in wasted resources and financial losses.

High-risk processes costing the business time and money

Manual processes inherently carry a higher risk of errors and omissions, which can lead to costly mistakes. These high-risk activities can drain both time and financial resources, affecting the overall efficiency and profitability of the business.

High risk of missing key compliance dates and targets

Maintaining compliance with regulations and industry standards is critical in retail. Manual FM processes increase the risk of missing important compliance dates and targets, potentially leading to legal issues and financial penalties.

Lack of visibility on progress of jobs and contractor performance

Tracking the progress of maintenance jobs and contractor performance is challenging without a centralised FM system. This lack of visibility can hinder timely interventions and lead to delays in addressing critical maintenance issues.

Errors due to time sensitivity

Manual logging of jobs and signing off invoices under time pressure can result in errors. These mistakes can affect financial records and operational efficiency, leading to incorrect payments and unresolved maintenance issues.

Difficult to track overall costs incurred

Tracking the total costs associated with maintenance and repairs is difficult with manual systems. This lack of clarity can prevent businesses from accurately budgeting and managing their finances, impacting financial planning and performance.

Inability to proactively manage or report on spend, job allocation, or contractor performance.

Without automated systems, it is challenging to proactively manage spending, allocate jobs efficiently, or review contractor performance. This limitation hinders the ability to optimise resource use and improve service quality.

Impact on brand image and store performance

Inefficient FM processes can negatively affect the overall appearance and functionality of retail spaces. Poor maintenance can lead to subpar customer experiences, which can harm the brand image and reduce store performance.

Lack of visibility for Senior Leadership Team (SLT)

Senior leadership teams often lack real-time visibility into FM performance, progress, and spending when relying on manual processes. Information is typically compiled in reports on a quarterly or annual basis, delaying insights and impeding swift decision-making.

Utilising FM and Energy Management Solutions

Adopting FM and energy management solutions is crucial for modern retail businesses. These tools not only save time and money but also enhance operational efficiency, compliance, and profitability. By leveraging these solutions, retailers can ensure their stores are running optimally, ultimately driving better financial performance and customer satisfaction.

Benefits include:

Significant cost and time savings

Implementing FM and energy management solutions can lead to substantial savings in both money and time. These solutions streamline operations, reduce manual tasks, and minimise unnecessary expenditure, providing a quick return on investment.

Proactive maintenance and reduced downtime

FM and energy management solutions enable proactive decision-making. For instance, equipment that is on the verge of breaking down typically starts to consume more electricity. With an integrated solution in place, an alert can notify the central team, enabling them to proactively dispatch a contractor during working hours to inspect and service the equipment. This approach prevents unnecessary downtime and reduces costs associated with emergency repairs and equipment failures.

Enhanced compliance and optimal trading conditions

These solutions help ensure that retail stores remain compliant with regulations and operate at their optimal capacity. This compliance and efficiency are crucial for maintaining maximum revenue and a positive customer experience.

Benchmarking and anomaly detection

Energy management solutions monitor energy consumption and provide data to benchmark different store locations against each other. This comparison helps identify anomalies, alerting FM teams to issues such as equipment faults, mismanagement, or insulation problems, which can then be addressed promptly.

Accurate billing verification

Independent energy management solutions can verify utility bills, preventing overcharging by utility companies. Many retailers face overcharging issues and pay inflated bills out of fear of service cutoffs. An automated solution can quickly analyse billing data against meter readings, ensuring accuracy and potentially saving significant costs.

Improved profit margins

Case studies have shown significant financial benefits from using FM and energy management solutions. For example, retailers can manually check bills against daily meter readings, resulting in substantial savings over a year. However, an automated solution would streamline this process, providing the same insights in minutes rather than hours.

Mitigation of financial losses due to rising energy costs

Retailers like Iceland have faced significant losses due to soaring energy bills. In November 2023, Retail Gazette reported that Iceland suffered a £17 million loss as their energy bills rose to almost £100 million. Utilising energy management solutions could help mitigate such financial impacts by optimising energy usage and reducing costs.