We have listed what we believe are the top considerations for the Refrigeration, HVAC, BEMS and Retail industries as we enter a new year. Read them below.
1. Temperature due diligence and compliance to become top priority
With a number of high-profile food safety incidents occurring in 2018, consumers and regulators are demanding tighter control and improved conditions surrounding their food. The need for complete Hazard Analysis & Critical Control Points (HACCP) compliance systems will therefore be front and center throughout 2019.
2. New regulations to drive higher efficiencies
Companies have been told to reduce f-gases consumption by 2030. To adhere to this new legislation, organisations will need to update their existing Heating, Ventilation, Air-Conditioning and Refrigeration (HVACR) infrastructure to move away from traditional refrigerants, and instead, use refrigerants such as Ammonia or CO2.
While this may initially appear to be an expensive change, such new regulations do represent opportunity to make maintenance and operational cost savings. By investing sooner rather than later in technologies such as heat exchangers for hot water and heating systems and LED lighting, companies can achieve cost savings, a return-on-investment (ROI) and payback of the investment and experience a boost to their profits.
3. Companies utilising real-time data and metrics to lead the marketplace
Every day, devices are becoming smarter and more intuitive. As capabilities and functionality improve, more and more systems will become automated, rendering traditional methods obsolete.
Such modern technology enables the connection of individual control and monitoring components. Doing so offers the opportunity to gather, process and present data in real-time – allowing companies to be proactive rather than reactive and make informed decisions at a glance. As competition in the market increases, the ability to confidently make quick decisions becomes the difference between market leaders and market followers.
4. Increased competition to demand tighter cost control
As the landscape reaches its highest levels of competition, retailers will need to think holistically to minimise costs and boost profits. Think not one room but the whole building. Not just electricity but all operating costs. Not just one machine but optimising performance for all equipment.
For the latter, the Energy Technology List and the Enhanced Capital Allowance (ECA) scheme is of great relevance. Here UK businesses are encouraged to invest in high-performance energy efficient equipment. Those who purchase a qualifying product can claim a tax break on 100% of the product purchase cost in the first year, representing an approximate saving of 19%. In 2019 this avenue will be of significant importance as the ECA scheme ends on 31st March 2020.
5. Flexible HVACR controls to reach peak demand
With requirements becoming more bespoke and an increased number of suppliers and controls entering the market, the need for open communication will heighten in 2019. Equipment will need to work together as industry conditions fluctuate in response to increased consumer control. No longer will one supplier provide all equipment, and companies will look to have greater freedom with regards to the solutions they choose and the controls which facilitate these. Open-protocols, such as BACnet, modus and XML, will become increasingly attractive as a result.
6. Online orders to drive further demand for the cold chain
The Food Marketing Institute predict by 2022 US consumers will spend $100 billion a year on online grocery. This also stretches across the Atlantic. A report by Statista, which takes figures from food and grocery research body IGD, states that in 2017 food sales in the UK accounted for 6.9% of the global e-commerce market, positioning the UK as having the largest online food market in Europe. Combine this information with a report by Mintel which found that 35% of consumers are attracted to the idea of adding to their shopping lists by giving orders to their Amazon Echo, Google Home or The Apple HomePod, and consumer behaviour predicts intense demand on the cold chain.
Over 2019, organisations should look to ensure this demand does not outweigh the supply. Walmart has already acted on this trend, hiring 1,400 new drivers in advance of the new year, but it required a more attractive recruitment package which organisations should look to prepare sooner rather than later.
7. Physical stores to adopt digital touchpoints
With physical stores generating 90% of sales, it would be an oversight for organisations to entirely swap to e-commerce. Instead, in 2019, organisations should capitalise on the opportunity to combine physical stores with digital prowess, turning consumers’ modern tendencies into a strength. This has already been seen within Amazon Go stores, where cash registers have been swapped for smartphone scanners. But retailers should look to build on this.
Harry Walker – Industry Head, Grocery Retail at Google, echoes this notion and is confident that, by the end of the year, the percentage of food retail journeys which involve a touchpoint will rise from 24% to 50% with the availability of innovative technology.
Amazon Go Interior (Image: Amazon)
8. Convenience to prove key to consumers
Recently there has been a digression from weekly food trips to those which are instead little and often as consumer habits lean towards convenience. This preference is expected to grow in popularity, with IGD predicting that by 2020 the number of sales made from convenience stores is to rise by 17.7%. This trend hasn’t gone unnoticed, with big supermarket brands purchasing small format, local stores in order to retain their customers.
Convenience has also been shown in the combination of store provisions – for example, smaller stores offering food while also providing a Post Office service. Food retailers should therefore look to expand their offering so the consumer can accomplish multiple tasks in one – the ultimate convenient experience.
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