Solid State Lighting in Retail Applications: Counting the Benefits
By Keith Scott, VP for business development, Bridgelux
Retail is now one of the most attractive markets for the use of light emitting diodes (LEDs) and other advanced lighting technologies. Adoption of LEDs is growing in commercial markets because of the significant savings due to lower energy consumption, longer lifespans, enhanced controllability and reduced maintenance. That’s especially true in retail, where stores are grappling with rising operating costs.
LEDs have overcome many of the technological and cost barriers that previously discouraged lighting designers while providing retailers with increased flexibility to adapt displays, stores and merchandise to customer preference. The appearance of merchandise has a crucial impact on sales. LEDs are growing in popularity in retail because they now offer the best light quality and quantity, without the heat in the beam, ultra violet (UV) radiation and glare of traditional lighting sources.
Retailers are taking advantage of the unique characteristics of LEDs that enable new store designs and innovative displays that attract consumers, guide them through stores, and spotlight merchandise, to increase sales.
“Especially in retail, it’s like a moth to a flame,” said Molly McKnight, senior lighting consultant at ARUP, New York City. “Light really is the key factor that draws someone to a product. The more light and color rendering on a product, the better it is for sales on the floor.”
McKnight, who focuses on high-end retail lighting, found too much variation in LED’s color and reliability five years ago. A strip of white LEDs would have varying color hues, or a couple LEDs would burn out more quickly than others. “I was hesitant to specify LEDs because I didn’t want to have that kind of headache on a job site, and I didn’t see products that would meet our expectations,” she said.
McKnight’s opinion of LEDs has changed within the past two years as the technology has improved.
“Based on it being an early technology, all of those kinks have been worked out,” said McKnight, who mainly specifies LEDs to meet the stringent rules for allowable watts per square foot under California’s Title XXIV. LEDs offer the low wattage and high output that McKnight’s clients require, she said.
LEDs enable new designs: Architect Thomas Schramek had many of the same concerns when he considered using LEDs in the newest store for Intersport, Austria’s top sporting goods retailer, in Klagenfurt, Austria. The store required high quantity of light to support its unique layout that grouped merchandise into “islands” created by accent lighting and signage.
Intersport installed spot and down lights using high flux density LED arrays. The solid state luminaires can be designed with varying beam angles to draw attention to merchandise displays, with anything from narrow beams for accent lighting to flood lighting.
The design resulted in a more inviting and efficient shop that stood out from competitors’ tightly ordered shop layouts, Schramek said. “At the beginning, we didn’t know if LED arrays would produce enough light,” Schramek said. “We tried a few samples, and the effect was really brilliant. After this test we knew that we could make an LED shop.”
Since installing LEDs, Intersport has seen a 30% reduction in lighting energy use, and expects a return on investment in less than two years. Intersport has since transformed four of its existing stores with LEDs, and plans to convert all its 278 locations within five years.
Minimizing the negative: In addition to energy savings, LEDs are helping retailers save costs by eliminating damage that traditional lighting does to merchandise.
Traditional lighting like CDM-R, HID or halogen produces heat and ultraviolet radiation that damages products. UV radiation speeds up produce spoilage and causes meat to brown prematurely. Heat emitted from traditional lighting can damage food, such as melting chocolate. In addition to the impact on food, ultraviolet radiation bleaches and fades clothing and other merchandise.
Italian supermarket chain COOP replaced white SON and ceramic metal halide reflector lamps with LEDs. COOP wanted a lighting solution that would save money while drawing customers to its fresh food sections, typically the highest profit margin products in grocery stores. On top of the 75% reduction in lighting energy use, LEDs have reduced COOP’s operating costs by eliminating the premature spoilage of foods.
Taking the heat out: The heat in the beam produced by traditional lighting sources is another major advantage for LEDs.
Swiss department store chain Manor AG began three pilots in its food and textiles sections in 2009 with LED arrays.
Manor estimates that it reduced lighting energy use by more than 50%. “In terms of energy savings pure and simple, the reduction in consumption is anything up to 30%. Then you have to take account of the energy for cooling, which is no longer needed,” said Elle Steinbrecher, media relations manager at Manor. “LEDs develop less heat, which keeps our customers and staff more comfortable.”
The supermarket section of its Geneva flagship store cut power consumption by 50,492 watts, a savings of greater than 50%. The fashion section saved 79,800 kilowatt hours, including reduced air conditioning costs.
The chain extended its LED pilot to other departments within its stores in 2010. By year end, Manor plans to have a third of its 73 shops in Switzerland using LEDs.
True colors: LEDs enable the use of a range of color temperatures to make displays and food more appealing. A slight red hue (high Red rendition value) can make raw meat more attractive, while warm tones (2700K) can make bread products appear golden brown.
Solid state lighting sources also help consumers see the true color of clothing and other merchandise. For Manor, this has meant fewer customers unhappy with their purchases since installation of LEDs in the clothing sections of its department stores. “Customer feedback is extremely encouraging. The goods appear in a natural light, and this is undoubtedly one of the reasons for the positive reactions,” Steinbrecher said.
Keith Scott is VP for business development for Bridgelux, Livermore, Calif., which develops and manufactures LED lighting technologies and solutions (bridgelux.com).
Discounters post strong results in September
New York City — Costco Wholesale Corp. turned in a strong September performance, leading the category with a 12% rise in same-store sales for the month. Wall Street expected a 10.1% rise. However, the warehouse club operator cautioned that margins were negatively impacted during the period and that it would be raising its membership fees to compensate.
Target Corp., helped by strong sales of groceries, beauty products and clothing, saw September same-store sales rise 5.3%, beating the projected 3.9% increase. Sales for the period rose 6.5% to $5.9 billion.
“We’re very pleased with our September comparable-store sales, which were somewhat ahead of our expectations,” said Gregg Steinhafel, chairman, president and CEO, Target Corp. “We experienced strong sales results throughout the month and across a broad array of merchandise categories, demonstrating Target’s ability to … generate strong financial performance even in this soft economic environment.”
Target was likely helped by its limited-time Missoni line launch, which sold out almost immediately and temporarily crashed the retailer’s website.
Other discount and warehouse same-store sales results included:
- TJX Cos. same-store sales in September rose 4%, beating the projected 3.2% increase;
- Ross Dress for Less was up 5%;
- SteinMart dipped 1.7%; and
- Stage Stores edged down .7%.
NRF: Holiday sales forecast to rise 2.8% to $465.6 billion
Washington, D.C. — A report released Thursday by the National Retail Federation predicted an average holiday shopping season. According to the NRF forecast, holiday retail sales for 2011 are expected to increase 2.8% to $465.6 billion. While that growth is far lower than the 5.2% increase retailers experienced last year, it is slightly higher than the 10-year average holiday sales increase of 2.6%, according to NRF.
“Retailers are optimistic that a combination of strong promotions and lean inventory levels will help them address consumer caution this holiday season,” said Matthew Shay, president and CEO, NRF. “While businesses remain concerned over the viability of the economic recovery, there is no doubt that the retail industry is in a better position this year to handle consumer uncertainty than it was in 2008 and 2009.”
Though several economic indicators paint a solid picture for the holiday season – including 14 consecutive months of retail sales growth and a substantial reduction in household debt – continued consumer uncertainty over the stock market, higher gas and food prices, fiscal policy and sputtering job growth will impact spending this holiday season, said NRF.
Additionally, the substantial year-over-year gains for the 2010 holiday season will create more difficult comparisons for retailers to achieve this year.
“Just when you think the U.S. economy is turning around, another factor comes into play that changes the game,” said NRF chief economist Jack Kleinhenz, Ph.D. “Persistently high unemployment, an erratic stock market, modest income growth and rising consumer prices are all combining to impact spending this holiday season. How Americans will react to shaky economic data is the question, but the good news for retailers is that shoppers have not yet thrown in the towel.”
In related holiday news, NRF has projected that retailers will hire between 480,000 and 500,000 seasonal workers this season. The association used its holiday forecasting model to create the hiring projection. The resultant numbers are comparable to the 495,000 seasonal employees retailers hired last year.