Navigant Research Blog

Can IoT Redefine Your Shopping Experience?

— February 9, 2017

CodeThere is a lot of hype surrounding the Internet of Things (IoT). The challenge this presents is in deciphering how an IoT solution can deliver better information—not just more data—and tackle specific pain points that lead to customers entertaining a new investment. Navigant Research believes the significant benefits associated with IoT are transforming commercial facilities into intelligent buildings; two specific business benefits of IoT can be highlighted by exploring the application of IoT in retail spaces.

First, IoT can help shoppers spend where their dollar aligns with their green priorities. In 2015, Nielsen released the results of a global survey that demonstrated a shift in willingness to pay and purchasing trends among millennials, the largest segment of the population. About 72% of respondents reported they are “willing to pay more for products and services that come from companies who are committed to positive social and environmental impact.” This was an increase of 17% from 2014—if the trend continues into 2017, close to 90% of millennials will be putting their green where the green is.

Demonstrating Sustainability

IoT can be the technology backbone to qualify the sustainability claims of retailers. Accurate tracking of energy consumption and equipment performance made possible by IoT infrastructure can help retailers quantify their efforts with data. Energy efficiency efforts can be monitored and verified with real-time data to inform annual reports and marketing efforts on sustainability.

Second, an IoT solution can improve the shopping experience by improving customer service with data-directed sales support. An IoT solution can provide retailers with detailed data on customer traffic, illustrating the flow of customers throughout their stores and even the time spent browsing in specific locations. If store managers utilize this data, they can be proactive about staffing and create new strategies for product placement and incentives to move customers throughout their stores. The efficiency of speedy checkout and the product placement enhanced by this occupancy data can help enhance the shopping experience, which suggests a new avenue to create return and long-term customers. Carrie Ask, Levis’ EVP and president of Global Retail, recently explained the concrete benefits of deploying IoT solutions. “On the opportunity side, we were underestimating the potential within our store traffic to drive sales and conversions. … And on the stakes side, we also realized that when we’re out of stock, not only do we lose in the moment the chance to drive a planned or impulse purchase, but the disappointed consumer may decide that the trip to the store was not worth it—jeopardizing future traffic,” she said.

Interested in hearing more about the role of IoT in retail? Join Navigant Research along with Rick Lisa, Director of IOTG America’s Sales at Intel; Greg Fasullo, CEO at Entouch Controls; and Craig Robinson, Partner at Traverse Ventures Partners for a roundtable conversation exploring how the IoT is redefining the retail experience on February 14 at 2 p.m. ET. Click here to register.

 

Accurately Measuring Savings from Integrated Distributed Energy Resources Offerings

— January 31, 2017

AnalyticsEnergy efficiency and demand response (DR) programs have long been administered by utilities, third parties, and local governments using taxpayer or ratepayer funds. Most recently, integrated offerings that span energy efficiency, DR, and other program areas have become more feasible due to the advent of the smart grid. The integration of information and communications technologies with the power system is enabling a better balance between demand and supply side resources.

Integrated offerings are key indicators of a broader integrated distributed energy resources (iDER) future. Identifying program design and savings attribution methodologies for harnessing the benefits of these resources are critical to enabling public support for the innovators that will populate this future with integrated offerings that bundle value streams into streamlined solutions. While existing program design and funding constraints may not be able to seamlessly support these emerging technologies, avenues are opening and should be explored so as not to thwart the iDER future.

In a new white paper, Navigant presents a methodology to account for all of the energy and demand savings from an integrated energy efficiency and DR offering on an annual basis. The methodology separates the attributes of each program type while avoiding double counting of savings across programs. It also proposes methods to accurately portray the costs and benefits of each program.

Methodology Breakdown

Methodology BF

 (Source: Navigant)

Navigant recognizes that each jurisdiction has its own policies and protocols for operating an  iDER offering. Ongoing activities in New York and California provide relevant lessons in light of the states’ recent focus on iDER. Navigant used examples of these lessons to identify key considerations across three areas that integrated offerings focusing on energy efficiency and DR should consider when developing implementation plans:

  • The importance of data granularity for analysis
  • Exploring legislative channels to support integrated offerings
  • A focus on avoiding double counting benefits

Navigant draws the following conclusions from this assessment for consideration by relevant stakeholders, including utilities, other program administrators, regulators, customers, and third parties:

  • Well-established methodologies and protocols exist for quantifying energy and demand savings for energy efficiency and DR offerings across North America.
  • Advanced generation thermostats have a proven market track record of providing demonstrable benefits for energy and demand savings through established methodologies and protocols to verify and attribute savings.
  • Energy efficiency and DR programs are funded and evaluated through individualistic incentive budgets; a structure that confounds shared budgeting for cross-program functionality and hampers integrated offerings from capitalizing on their multiple value streams to gain market traction.
  • To avoid discouraging innovators from pursing integrated offerings, regulators and utilities without integrated evaluation methodologies should consider the methodology to develop interim polices and protocols for iDER offerings to count savings in two or more program areas until an integrated methodology can be developed through official channels.
 

There Is No Cookie-Cutter Approach to Energy Efficiency

— January 11, 2017

Energy efficiency is a resource available in abundance, no matter the location. It is the lowest cost option of energy investment, beating all other forms of generation. But if energy efficiency is so beneficial, why is its implementation not standardized across platforms or locations in some form or fashion? Can’t similar measures be prescribed for all buildings, old and new? Is it possible to take a boilerplate project and implement that across all buildings to gain the present efficiencies? For example: Fix these components, install this equipment, follow this process, and you’ll have an efficient building. Sounds simple, right?

It may not be that easy. There are so many variables to an energy efficiency project or engagement that one prescribed set of technologies, process improvements, or maintenance services will not be optimal across all buildings in general.

One size does not fit all. The profile of the end-use consumption of standard building components is dramatically different in cold climates versus moderate to warm climates. So, when analyzing a building for an efficiency project, all of these factors—and many, many more—must be taken into consideration.

Transition to Sustainable Buildings, Strategies and Opportunities to 2050

(Source: International Energy Agency, 2013)

Efficiency performance requirements, codes, and standards have been proven to work as prescriptive guidance for both new construction and retrofits. Defining these locally is important for the same reasons that each efficiency project is unique. For example, heating codes may not be as important or effective in a warm climate as in a cold climate.

There is still a long way to go until the value of energy efficiency is maximized around the world. A full 70% of global energy consumption is not covered by any energy efficiency performance requirement. This is despite the fact that the International Energy Agency found that performance measures are the most effective action to take in the optimal pathway to a decarbonized energy system. The good news is that, although most projects are unique to a situation or location, energy efficiency experience can be transferred to other groups, countries, and regions. The diversity of experience created by project uniqueness adds to this body of knowledge, making energy efficiency accessible anywhere and for any application.

 

Meeting Global Challenges with Energy Efficiency

— January 9, 2017

Energy CloudAccording to the International Energy Agency (IEA), efficiency is the only energy resource that all nations possess in abundance. Similar to other resources, energy efficiency must be mined. Not from the ground per se, but by examining the available opportunities and by implementing a holistic plan that looks at methods and actions appropriate for the locale, climate, population, demographics, and a host of other interrelated inputs.

According to the IEA’s World Energy Outlook 2013, every $1 invested in efficiency saves $2 in new power plants and electricity distribution costs. Globally, buildings are responsible for nearly 40% of energy use (including 60% of electricity use), 12% of water use, 40% of waste generated by volume, and 40% of material resources. This vast amount of resource consumption provides a significant opportunity that amounts to more than mere cost reductions for building owners, managers, and tenants. Energy efficiency competes on price with the cheapest of energy generation technologies.

Example End Use Consumption of Standard Building Components in Different Climate Zones

(Source: American Council for an Energy-Efficient Economy)

This value has consistently held up over time, making it a stable and relatively predictable alternative to new generation sources of any kind. Overall, investments in energy efficiency enable more effective capital utilization to help meet difficult global challenges such as accelerating urbanization, climate change, national energy security, energy access, and worker productivity, to name just a few.

Opportunities in Buildings Efficiency

Navigant Research’s 2015 Global Building Stock Database report noted that residential and commercial global building stock was expected to reach 160 billion square meters in 2016. There are many opportunities to expand and extend the value of this resource, and the world is making progress. Gross domestic product and population growth has been largely decoupled from the demand for energy, the energy intensity of nations has decreased, and energy efficiency policies covered 30% of energy consumption (up from 11% in 2000). All this has happened despite the fact that oil prices fell as much as 60% in 2014.

Overall, progress continues to be made on efficiency gains in developed and developing nations, and regional and country specific momentum may be strong enough to withstand the temporary political climates that could serve as a hindrance.

 

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