Go Green, Not Red, this Holiday Season
The holiday shopping season is upon us. For retailers, these last three months of the year signify a marathon of competitive sales strategies to increase foot traffic and maximize profits.
According to the National Retail Federation, the holiday season can represent as much as 30% of annual sales. To adapt to shifting consumer trends and meet peak season demands, stores plan to increase both hours of operation and staff onsite.
Retailers such as Gap and Target have already scheduled hiring events across stores nationwide. In 2016, seasonal retail employment increased by 641,000 from October through December to support extended store hours. Many stores even stay open non-stop for the last few days before the holiday.
By focusing on sales strategies to capture the largest share of consumers, retailers often overlook the costs required to do so — because as store hours and foot traffic increase across retail sites, so do waste volumes and energy consumption.
Retailers spend over $21 billion per year on energy, a large portion of which hits during peak shopping season — and over $3 billion of these expenditures could be avoided through efficiency measures.
By planning early and creating a pre-holiday checklist to manage these cost areas, retailers can ensure a happy holiday season for businesses and consumers alike. Retailers can follow the following five strategies to minimize energy and waste costs.
1. Big data brings big savings. Before the holiday season begins, retailers should have established benchmarks for both energy usage and waste volumes to efficiently adjust for increases. Utilities can help retailers assess energy usage and provide recommendations for low cost efficiency measures and connected equipment.
As more equipment, including thermostats, lighting controls and machine sensors, come online and provide constant streams of data, retailers gain a more transparent view of energy usage and opportunities for significant reductions.
Additionally, for waste, retailers who have their own, individual waste services should be familiar with typical waste volumes to prepare for increases. If dumpsters are regularly filled pre-holidays, these retailers should temporarily increase service levels with their haulers before the holidays to avoid unsightly pileups and extra fines.
2. Turn that thermometer down. Retailers go out of their way to accommodate customers and create an optimal environment to make the hectic shopping experience a little more enjoyable. Busy shoppers, however, are unlikely to notice minimal heating or cooling changes that bring in big savings. Turning the thermostat down or up by just one degree across various sites can save millions of dollars.
If you have a control system, ensure that your set-points and schedules are adjusted to reflect the holiday hours. Relying on staff at each location to adjust them leaves room for error and you run the risk of having your assets on 24×7.
3. Go green on holiday displays. With increasing competition to stage elaborate window displays, retailers often underestimate the costs and requirements of additional plug loads to power holiday lighting and special effects around the clock. To mitigate the stress on existing power sources within stores, retailers should seek out energy efficient power products from online marketplaces run by utilities and local suppliers.
4. Maintenance comes first. Retailers should make sure all assets – lighting controls, heating and cooling systems, or refrigeration – are running optimally prior to peak season. Ensuring planned maintenance is completed and that all assets are commissioned correctly will reduce the chance for unplanned downtime on critical operational assets. Having an air handling unit with a damper stuck open wastes energy and is an unnecessary distraction for store managers during the most critical time of year.
5. Embrace waste year-round. Most of retail waste is recyclable. For many retailers, the holidays correspond to moving more products, creating more packaging and consequently increasing waste volumes. This influx of waste is accompanied by longer hours and more people, which means less time and space to collect it. The biggest mistake retailers make is assuming that their recycling programs are functioning well and that employees are separating materials properly. Many companies start a waste or recycling program, train their employees once, and never touch it again. But, these programs need constant attention.
Creating well-founded recycling and waste reduction programs year-round is the foundation to a greener holiday. This includes proper bin placement, ongoing employee training and clear signage for disposal locations within the store to enable new employees, and distracted employees, to maintain existing recycling programs.
From resetting HVAC controls to adjusting waste and recycling services to account for more inventory, retailers can better prepare for their busiest season through data and best practices. Last year, holiday retail sales increased 4%in 2015 to $658.3 billion. To ensure strong profits this year, retailers must not only adapt to consumer demands, but also increase their efforts to reduce energy costs, improve waste programs and be more sustainable. This will decrease overhead and ensure a greener and more profitable holiday season.
Jamie Daubenspeck is director of facility technology, Ecova and Kristin Kinder is manager of waste solutions, Ecova.
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Lids’ new loyalty program hits a home run
With a mere six months under its belt, Lids’ new Access Pass loyalty program is driving customer engagement to new levels.
Tired of running a stagnant loyalty program that only engaged a small amount of shoppers regularly, the sporting goods headwear and apparel retailer was ready to change the game. In April, Lids switched from a static points-based program to a digital model designed to “delight” shoppers.
“In the past, our Lids Club loyalty program enabled shoppers to collect points during each purchase, and that was it,” Jeff Pearson, senior VP of e-commerce and marketing, Lids Sport Group told Chain Store Age. (Lids Sports Group is made up of Lids headwear stores, Lids Locker Room retail chain, Lids Clubhouse retail stores and its online businesses. The company is owned by Genesco Inc.)
“We fell short when it came to communicating with our loyal customers, or even showing them their accrued points and how to redeem them,” he said. “It was time to bring in new offers and contests, and to keep consumers engaged to Lids core brand.”
Using its digital platform upgrade last spring as a jump-off point, Lids began designing Access Pass — an electronic loyalty program that engages all shoppers, and delivers a new level of rewards. To be sure to engage its entire customer base, Lids launched two membership options.
Access Pass Premium, which requires a $5 annual fee, rewards members with 10 points for every dollar spent. Once 1,000 points are accrued, members receive a $10 reward toward their next purchase — a reward that is redeemable at any of Lids’ more than 1,300 retail locations across North America, or online.
Premium members are also eligible for sneak peeks on new exclusive Lids merchandise, special gifts on birthdays, early access to special sales in-store and online, 20% off on all headwear and embroidery, and 10% off apparel and novelties.
A free version of Access Pass is also available. It rewards members with five points for every dollar spent, and features limited incen-tives, including special gifts on birthdays, and early notifications on special offers.
The retailer is augmenting its loyalty program with a dedicated app that enables users to track points, reward thresholds and earned rewards.
Keeping simplicity top of mind, Lids only requires Access Pass members to share their email address either online or in-store during checkout to earn points. They can also sign in at store-level by scanning their app at point-of-sale.
Since launching in April, Lids has enrolled approximately 1.7 million subscribers in both programs. Almost 70% of members — just over 1.1 million — are enrolled in the Access Pass Premium program.
Meanwhile, the Access Pass app is approaching 150,000 app downloads. While the app does not support mobile commerce, Pearson is increasingly bullish on the value it is driving related to personal engagement among members.
“Besides helping members track their loyalty, the app is a vehicle we use to engage them socially, especially when communicating exclusive offers,” Pearson reported.
For example, the app supported a promotion that rewarded Access Pass members that purchased over $50 between July 1 and July 9, with a $10 reward to be used in August. The promotion had 30,000 shoppers qualify for the reward, and 8% redeemed the incentive in August.
“This was something we couldn't communicate before we had the app or new loyalty program,” he said. “We now know which customers took advantage of the offer, and also learned that 60% customers used the reward in-store and 40% redeemed the offer online.”
Pleased with early results, Pearson expects to double Access Pass’ enrollment within three months.
“By the end of our fiscal year, January 31, 2018, we will be 10 months into the new loyalty program, and this goal would put us well ahead of numbers that we had annually for our previous Lids Club program,” Pearson explained.
“Customers are already responding well to the new program and it is outperforming our previous model,” he added. “We need to continue listening to our customers and engage them to find out what they want in future. That is how we will continue to evolve the program into something that is useful and desired by customers.”
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Wholesale club giant expands online delivery options
Costco Wholesale Club is upping its home delivery game for online food orders as the grocery delivery market continues to heat up.
The retailer has introduced a new two-day delivery service, called CostcoGrocer, for customers across the U.S. (with the exception of those in Alaska, Hawaii, and Puerto Rico.). The service, which has a fee of $3, offers delivery of non-perishable foods and sundries, with about 500 items available. The delivery fee is waived for orders over $75.
Costco is also expanding its same-day delivery partnership with Instacart to more markets. The program, which includes both dry and fresh foods, is available at some 375 Costco locations. It also is being expanded to include more products.
“There’ll be a number of additional U.S. locations planned – added between now and the end of calendar 2018 as our partnership expands,” Costco CFO Richard Galanti said during the company’s fourth quarter earnings call.
Costco’s moves to expand online delivery come as Walmart and Target are also upping their games. On Oct. 3, Walmart announced it had acquired Parcel Inc., a last-mile delivery startup that specializes in delivery of perishable items and general merchandise to customers in New York City.
Target recently expanded the rollout of its next-day delivery service of household essentials, Target Restock, to eight new markets.
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