Why Retailers Need to Care About Facilities Performance

“We see leading retailers being more proactive in the way they manage the performance and the cost of these revenue-generating assets, because when assets are unmanaged, there’s no source of truth,” says Chris Zach, a senior product marketing manager with ServiceChannel. “You don’t know what assets you own, if they’re under warranty, how old are they and how many there are. If there’s a lack of data for reducing the down time and understanding which units break down the most and the root causes of those breakdowns, then the capital spend becomes reactive. You’re not planning ahead — you’re just running the assets until they catastrophically fail and you have to replace them at that point.”

The High Cost of Failure

Repair and maintenance costs, when not properly managed, can be quite high, as illustrated by ServiceChannel’s “Grocery Facilities Benchmark Report.” However, there are costs beyond the actual funds expended to fix equipment. The most extreme examples involve refrigeration, where broken equipment can require product to be discarded if not repaired quickly enough. To address the situation, some retailers are employing Internet of Things (IoT) devices to provide a steady stream of performance details allowing for early identification of problems.

“Some of the leading use cases that we are seeing for IoT are with refrigeration,” Salisbury affirms. “If you can lose $250,000 of product because of a single case or rack failure, there’s a really strong business case for using IoT to accelerate diagnosis and get ahead on preventative maintenance.”

The other element of facilities failure is the message of neglect that it sends to shoppers when they encounter an improperly functioning cold case or lapse in service due to a broken piece of foodservice equipment. This issue has gained new relevance as shopper traffic began returning to stores in 2021. Throughout much of 2020, when repair and maintenance costs were largely flat, there was greater spending on janitorial aspects of facilities due to pandemic concerns; however, those expenses have waned and at the midpoint of 2021, overall facilities investments had risen.

As Zach notes, “We’ve seen that spend is up 15% in 2021 versus last year, so it’s clear that brands are investing to attract customers back into their stores in person and making sure that they have a good experience when they show up again.”