For the past two years, Australia’s retailers focused on addressing the digital transformation and directed their energies into recruiting more online customers. This pivot came as a result of the pandemic where it forced their bricks-and-mortar stores to close for months on end.

However, retailers have begun to bounce back and thrive in the post-COVID-19 era, with spending pushed to a year-on-year 7.5% growth in 2022[1], as customers opt to shop in-store and crave in-person experience. With that a new challenge is on the horizon for retailers that requires increased attention – greenhouse gas (GHG) emissions reduction.

It is not well known, but the Australian retail industry accounted for around half of the energy use in the commercial property sector[2]. There is no getting around it; the retail sector as a whole, has encountered great difficulties making positive significant impact regarding sustainability and emissions reduction.

Climate change is no longer a warning to retailers. Last year alone, we saw large parts of South-Eastern Australia experience record-breaking rainfall and floods.[3] The outbreak of severe flooding in New South Wales also recorded the country’s most expensive natural disaster with insurers estimating that AU$5.5bln in claims have been lodged.[4]

When time is of the essence, energy efficiency is a high impact avenue to reducing GHG emissions and addressing extreme weather events. Retailers have been finding their footing with climate mitigation actions, and for the first time in Australian history, artificial intelligence (AI) can now be used to reduce energy costs and emissions in multi-site retail stores. 

Where is it all going…

The biggest culprit for energy use in retail: Heating, Ventilation, and Air Conditioning (HVAC). The HVAC of a retail premises can be anywhere between 40% and 70% of total energy use.

This is all in an environment that has seen energy costs accelerate like we haven’t seen since the 1970s energy crisis. And the majority of retail employees and consumers are too young to remember the consequences of that moment in world history.

The point being – never has energy efficiency been more important for the retail sector, than it is at this very moment.

The answer

A scalable solution, powered by AI, that is available to the retail real estate sector. Once limited to expensive building management systems in large commercial buildings, recent changes in hardware options have allowed the deployment of AI in premises as small as 200 square metres. The visibility, control and predictive nature of AI opens up significant financial opportunity.AI has a significant role to play on the road to net zero. Aggregate data can be used to apply AI to help reduce emissions by making existing operations more effective and efficient, accelerating the design and operation processes and enabling new business models.

Specifically for the retail sector, by overhauling the most carbon-intensive processes, improving energy efficiency in buildings and deploying renewable energy, retailers can step up their efforts to make a serious impact in the fight against climate change.

Thanks to AI, retailers’ existing HVAC systems can level up to a predictive solution that learns precisely how to use less energy to optimize comfort in all areas 24/7 by examining data like local weather forecasts, seasonal climate and previous use. Without having to retrofit a single piece of the building, AI allows  retailers to cut their carbon footprint and reduce the operational costs in an immediate, safe and cost-effective way.

The bottom line

Some retailers have recently set more ambitious emission-reduction targets[5] but getting the industry to net zero requires a more comprehensive approach. HVAC alone is only part of the solution. The six technologies prioritized through the country’s Technology Investment Roadmap can also help reduce or capture emissions across all sectors.[6]

HVAC is one of the largest sources of energy consumption for retail buildings. Any retailers looking to improve their sustainability efforts cannot afford to ignore the role of AI in HVAC controls. AI is now impacting the high-energy consumption sector, offering a simple, safe alternative to lower costs while improving the overall energy efficiency.

Sam Ramadori is CEO of BrainBox AI.