Brick, Mortar and Energy

Roughly 164K businesses have closed as a result of the pandemic, according to the recent Yelp Local Economic Report. Restaurants and retailers have been hit especially hard.

The impact is expected to continue well into 2021.

One analyst even developed a stress test score, to predict which retailers might not survive. These 24 restaurant chains will likely be shutting locations.

As retailers, restaurants and hotels plan for the next phase of COVID-19 recovery, they look to solutions that continue to support customer health, bring in new sources of sales and contain operational costs.

The recovery will be a slow one, but smart businesses are discovering an untapped source of savings -- one that can also make the customer and employee experience better -- energy.

Here is your roadmap to recovery, with a focus on a relatively simple way to delight your guests and save you thousands of dollars.

This eBook provides insight into the impact COVID-19 had on restaurant, retail and hotel businesses in 2020 and covers creative steps you can take to reduce expenses.

You’ll discover:

How COVID-19 has impacted industries nationwide
Creative solutions companies are using to survive
Where you can cut costs in 2021
The cost-saving potential of energy efficiency

Chapter 1

Industry Impact of the COVID-19 Pandemic

2020 was a year like no other. Businesses saw massive drops in traffic and had to learn new ways of operating to meet the changing needs of consumers.

Online shopping and food delivery have had an impact on brick-and-mortar industries over the past five years. And brands -- retail, restaurant, and hospitality -- have been steadily integrating technology and omnichannel experiences into their thinking.

Then a pandemic reared its ugly head, accelerating and morphing that transformation. Many multi-location chains shut down stores. Some brands went out of business entirely. Travel risks and limitations, as well as the cancellation of live conferences and meetings, have taken their toll on hotels, motels, and resorts.

Impact by Industry

Retail

14,000

closures

Hotels & Resorts

29%

less occupancy

Restaurants

100,000

closures

Retailers were already facing challenges prior to the pandemic, competing with Amazon and dealing with the slow demise of many shopping centers. Reduced traffic and social distancing guidelines cut into their profit margins even further.

You're not alone in your challenges.

pandemic small business stats

Not only is business down, but those who are still open are working with fewer operational hours and employees and dealing with increased expenses.

effects of pandemic on small businesses

Consumers abandoned meals in restaurants and overall sales plummeted 34 percent.8 That had a direct impact on employment as well, with staffing levels at 71 percent. Revenue per available hotel room is down a massive 48 percent.

Like other types of businesses, hotels needed to invest in safety precautions, driving up their expenses.

All of these industries faced significant downturns and rising costs.

Chapter 2

Creative Solutions Helping Companies Thrive

Large and small brands alike took major steps to reduce expenses and find creative new ways to appeal to customers as foot traffic plummeted.

Some companies have actually seen an uptick in sales during the COVID-19 pandemic and others are finding new and unique ways to cut costs without sacrificing the customer experience.

Here are just a few big brands and small retailers that innovated their offerings and thrived as a result.

Wayfair, Overstock, and At Home fared well in the retail category, proving that even a tactile category like home furnishings can thrive when consumers need timely solutions.

The work-from-home trend clearly fueled these retailers’ success.

Warehouse retailer BJ’s increased sales as much as 30 percent in one month during the pandemic. Knowing what customers need to buy and providing it in quantity led to success.

Chipotle launched Chipotlanes, a new drive-through concept. Along with its automation focus, the chain saw a 216% boost in digital sales in just one quarter.

Even innovative and fast-moving mom-and-pop businesses have weathered the storm. By offering take-out options and more unique dishes, Tara Kitchen was able to expand into a third location.

Retailers Pivot to Online Sales

innovative retail solutions

Those retailers -- large and small -- who were able to quickly pivot to online models fared well. Expanding their lines to include products like masks, bedroom slippers and other necessities during lockdowns delivered a boost to creative businesses who focused on consumer needs and behavior shifts.

Staycations for the Win

innovative hotel solutions

Extended stay hotels performed well and some hotel brands found new ways to market their rooms -- focusing on staycations. Others donated rooms to first responders. Although that may not have solved their financial woes, these brands built awareness as companies that give back to those in need.

Restaurants, retailers, and other brick-and-mortar businesses should look to those companies that came up with creative and targeted solutions to consumer & business challenges and leave no stone unturned.

These successes show us that some old principles of business and marketing have never been more true.

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Understanding customers' needs drives innovative thinking.

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Even when times are tough, investing in growth pays off.

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Crossing industry lines can boost sales significantly.

Chapter 3

7 Keys to Survival and Prosperity

Pandemic recovery will be slow and complex.

Retailers are looking at their product offerings and how to use every square foot of indoor and exterior space to promote their brands. KPMG declares that there is “no going back” for retailers, as they will need to accelerate their move to omnichannel delivery, a trend that began prepandemic.

The restaurant industry may not recover until 2023 and will likely undergo significant changes in how restaurants serve customers.

There are some ways businesses can survive in the meantime.

1. Commit to New Thinking

Only by adopting a “no bad idea” philosophy can organizations open the doors of transformation. People can be even more creative during crises -- if you give them a chance.

2. Understand Customer Needs

It's important to know consumers, the market and your competition at a granular level. Put yourself in the shoes of your target buyer and invest in research to better understand the market you serve.

3. Invest in Marketing

Now is the time to proactively reach out to current and prospective customers. Create customer experiences that are memorable to keep your customers coming back for more.

4. Cultivate Your Team

Make sure you have the right talent to create new solutions and deliver a superior customer experience. Invest in your culture to attract and retain those people.

Hiring during COVID-19 may rely heavily on virtual interviewing. Make sure you’re prepared for this.

5. Automate Where Possible

Leverage technology as a means of keeping customers healthy, delivering faster service and reducing staffing expenses. Successful retailers are doing this in many ways.

6. Look for Relief

There are many grants and relief programs for small businesses. Sustainability grants can be a surprising way to bring in extra capital. See what disaster relief programs are available for your business.

7. Reduce Business Expenses

Cut into fat rather than muscle, seeking meaningful ways to reduce expenses while delivering best-in-class experiences to customers and employees.

Do not sacrifice the customer experience or scrimp on those benefits that help you retain the best talent.

Chapter 4

Where Can Your Business Reduce Expenses?

Building your topline takes creativity, commitment and patience. A little extra budget never hurt.

Where will those funds come from? Cost management is vital -- not only for cash flow but also for freeing up investment dollars for new ideas and marketing.

Now is a great time to re-examine your monthly and annual expenses and map-out a cost reduction plan for 2021 and beyond.

As you go through each line item, ask yourself, “How will this affect service delivery and customer satisfaction?”

Cost of Goods

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The food you serve or products you sell are critical to your business. While it might be tempting to buy cheaper ingredients or pull back on your offerings, it's important to deliver a quality experience for your customers. Cutting back here might cost you.

Talent

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The people who help you deliver guest
satisfaction and results are essential to retailers, restaurants, and hotels. If you must reduce your staff, make sure that you still have the right people in place to serve your customers.

Technology

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It's a great idea to regularly audit the technology you subscribe to. This helps ensure that you're only paying for tools that add value to your business.

A word of caution here though. Expedited delivery, touchless solutions and online-only service options are good reasons to consider investing more in this area, not less.

Operations

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This is typically where you'll find the biggest potential for savings. Whether it's going paperless or evaluating your workspace - chances are you can save thousands of dollars by taking a closer look at your operations.

There is a source of major savings here that is often overlooked -- energy expenses.

Chapter 5

Saving Energy Can Save a Business

Energy costs represent one of the highest operational expenses for restaurants.

Restaurants consume 3x more energy per square foot than other commercial buildings.

While the cost per square foot is substantially lower for hotels and retailers, the size of these buildings causes energy costs to add up - running well over $60,000 each year.

Full service hotels spend 4-6% of revenue on energy. This can be up to 10% for historic and luxury properties.

Energy Star reports that retailers spend $20 billion on energy each year.

Here's a look at the average energy costs across these three groups.

Energy costs include HVAC, electricity needed to operate equipment and technology, water consumption, food preparation and lighting.

Here's a closer look at how these expenses break down.

Energy Savings

Do the math. If you can find creative ways to reduce energy expenses, you’ll free up thousands of dollars that can be redeployed to other business-building programs.

Start with a thorough energy audit. This energy audit checklist guides you through a step-by-step review of your company's energy usage. It will help you find areas where you're wasting money, and create a plan to correct the issues.

If you run multiple locations, conduct an audit for each and compare them to one another.

Look closely at your current lighting. If your building was designed in the 1990s, your lighting may be a huge drain on your energy usage and your bank account.

Chapter 6

The 5 Key Stakeholders in Energy Management

In an ideal world, you could simply flip a switch and begin to enjoy energy savings. People are ultimately the engine behind making significant changes to your operations. But even in small organizations, capital improvements take time and persuasion.

There are five groups of people who are vital to an energy- and cost-saving initiative.

Your Customers

Today’s consumers -- especially younger generations -- are committed to sustainable solutions. Not only does an energy management program save money, but it also creates a healthier and safer business and planet.

Your Employees

Once your team fully understands the impact that saving energy can have on both business and personal health, they’ll become advocates and ambassadors.

Cleaner air, better lighting (which improves productivity), and safety in common areas are just a few of the many personal benefits your valued employees will enjoy.

Your Business Leaders

Your managers will likely rally to embrace thinking and solutions that result in long-term savings. Be sure the share your plan with them early on, and how it will benefit your bottom line, employee health and the environment.

Your Investors

Any stakeholder - from a VC firm to your board of directors - is looking for positive change, especially when it directly impacts the bottom line. Smart businesses are including sustainability and energy-management statistics in their quarterly and annual reports.

Media

Local and national media often seek success stories of SMBs and big brands that are contributing to the health of our planet, customers and employees. Be sure to share your story with the people who can help you spread it.

Chapter 7

The Cost-Saving Potential of LED Lighting

Lighting is the "low hanging fruit" of energy savings.

By selecting and installing the right lighting systems, restaurants, retailers, hotels and other brick-and-mortar operations have seen more than $200 million in energy-savings.

LED lights use 90% less electricity than incandescent light bulbs and 50% less than fluorescent lighting.

LED lights not only use less energy to operate, but these systems include dimmers, sensors and smart placement of lights to ensure you have just the right amount of lighting at the right times of the day and seasons.

Average Industry Savings

Retailers, restaurants and hotels stand to save substantial by switching to LED lights. Not only do LEDs use less energy, but they last longer than traditional bulbs, decreasing maintenance costs.

Retail Plazas
& Parking Lots

$3,380 maintenance savings per year
$12,484 energy savings per year
$15,864 total savings per year
$237,955 total savings by partnering with FES

Casual Dining
Restaurants

$1,100 maintenance savings per year
$4,505 energy savings per year
$5,605 total savings per year
$82,575 total savings by partnering with FES

Hospitality
& Leisure

$1,269 maintenance savings per year
$3,468 energy savings per year
$4,737 total savings per year
$71,059 total savings by partnering with FES

Chapter 8

Lighting-as-a-Service:

What Is It & How Can It Help?

We’re all used to subscription models in our lives as consumers and in business. For example, Software-as-a-Service (SaaS) is a way that companies can access sophisticated or expensive technologies, paying for usage rights on a monthly basis.

Lighting-as-a-Service (LaaS) is a relatively new concept. It allows “subscribers” to pay for energy efficient lighting systems over time, long after they've cashed in on the savings.

FES covers the entire upfront cost to design and install the new lighting system, plus includes ongoing maintenance within the monthly fee.

Subscription models have numerous advantages.

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Know exactly what monthly costs will be, enabling you to budget and manage cash flow.

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Service providers typically offer ongoing maintenance and support throughout your subscription.

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Reap the rewards of the product or service you're subscribing to before laying out the investment.

FES: An Energy Partner for Life

FES makes it easy for businesses to make smart energy choices that deliver exponential value.
We've partnered with thousands of small businesses across the country to:

Save them money on energy costs
Eliminate lighting maintenance expenses
Improve health and safety for customers & employees

To date, FES has partnered with thousands of SMBs to:

Generate

$200M+

in energy savings

Install

500K+

energy efficient lights

Eliminate

68M+ lbs

of CO2 emissions/yr

Chat with an Energy Specialist

If you need a partner to help unlock instant savings, connect with one of our energy saving specialists. We’ll complete a free energy analysis to help you understand exactly how much your business can save.

Let's Chat

Get Paid to Switch Your Business to LED

Efficiency can make all the difference. To help small businesses recover from the pandemic, we’re covering the upfront costs to switch to energy-efficient lighting. Plus you may get a cash rebate for your old lights.

Learn More

About FES

Future Energy Solutions is on a mission to make it easy for businesses to make smart energy choices.

We design, deliver, install, and maintain LED lighting upgrades with zero capital cost up-front, making it easier and more cost effective than ever for businesses to switch to LED. We work closely with our customers to engineer custom lighting solutions perfectly tailored to individual business needs that deliver unrivaled savings.

For more practical tips on energy savings, post-pandemic recovery, and SMB operations, subscribe to our blog - the FES View.