Does turning off the screens at a store make THAT much difference???
March 3, 2009 by Dave Haynes
When I first read a few days ago of reports about the demise of the Tesco Screens network, my initial reaction was a shrug. As noted, sprinkling a few screens around cavernous stores, hoping they get noticed, is usually an exercise in futility.
It was the rationale for the shutdown that caught my eye, and made me really wonder.
At least part of the reason Tesco says it is quite literally pulling the plug is the power draw from all those screens and PCs. Tesco, you see, is greening up their stores, and also looking to shave costs in the process.
Tesco confirmed as much to Barnaby Page at Screens.TV:
Dunnhumby Retail Media in the UK says the age and inefficient energy usage of the screens it managed in Tesco stores are behind the closure of the Tesco Screens network.
The high-profile network – launched in 2004 as Tesco TV on an advertising-funded model, and later relaunched by Tesco-owned Dunnhumby as a promotional tool for the retailer – will be replaced by “modern and energy-efficient alternative communications for customers”, Dunnhumby spokesperson Katrina Jackson told SCREENS.tv.
What struck me in that was a couple of things:
1 – Was this the start of something bigger, with other stores rationalizing under-performing ad networks by saying they make too little and cost too much in power, in an energy concious new economy?
2 – Do the things REALLY draw that much power?
The few times venue operators ever asked me about power consumption, I’ve said the impact was nominal and crossed my fingers that it was so. Electrical engineer I am definitely not. But I’m not so bad at research.
So I dug around Monday night and tried to get a sense of energy consumption and whether a screen network in a larger footprint store was something that would even be on the radar of store ops guys who look to green a place up and lower not only costs but carbon footprint.
I came up with a few things, and I will use the example of a 50,000 square foot grocery store in the US as an example, mostly because those numbers were handy and supplied by the US government’s Energy Star program. An industry focused paper suggests a supermarket of that size runs up an energy bill of about $200,000 annually, with about half that cost going to heating, cooling and lighting.
I looked up energy consumption averages, again from a reputable source, and determined the wattage for LCD panels, PCs and routers/modems. Then I built a little spreadsheet that figured out the kilowatt hours for 10 42 inch panels, 10 PCs and 1 router/modem. I’m guessing that would kinda sorta fill out a store of that size.
Then I looked up the industry average for cost per kilowatt hour, which is roughly 10 cents in the US right now.
I assumed the network was up 360 days a year, and that while the panels were off for 10 hours each night, the PCs and router/modem stayed on all the time. When I run the numbers, it comes out to 17,500 kilowatt hours a year, and when billed out, to $1,750 in energy costs for the store.
That’s actually more than I thought it would be, and might raise the eyebrow of a grocery manager if he was letting a third-party company in just on a revenue share basis.
But when those numbers are worked back to a daily cost, it’s less than $5 and, divided by the 14 hours the screens are on, 35 cents an hour. If you can’t justify the 35 cents an hour it costs to run your ad screen network in a store and hopefully drive sales, you have real problems.
The larger question is whether pulling out a network because of this relatively nominal cost makes ANY sense. Energy Star, among many groups, can point out countless ways grocers can REALLY reduce energy costs, like freezer bins with doors.
Now, supermarkets are probably the worst examples of energy consumption in the retail sector, but there are a lot of them. Other large stores that don’t have have many or any chillers do have a lot of lighting, so while the screen network bill may be a larger percentage of the overall bill, it will still be nominal.
I’d imagine there will be more instances when screen networks are questioned because of their energy usage and relative value in the retail environment, but the numbers are hardly damning. Tesco’s 2,500 or so plasmas are as much as five years old and probably inefficient as hel. But they were also probably due for replacement, because they were running out of lamp hours, regardless of any green sensibilities.
Both plasmas and LCD technologies are growing more and more efficient, at least in part because big, honkin’ HDTVs in peoples’ homes really are having an impact on the grid, and homeowner bills. So replacement screens would deliver the desired energy savings immediately. But a Tesco equipment refresh like that, between screens and labor, would have also been a few million dollars in new cost when the ROI just wasnt there because of the business model.
So the energy conscious argument for ripping out the screen network doesn’t really hold. They were probably coming down soon anyway because of age, and no one could make a strong argument, I’d imagine, for throwing a few million more at something that wasn’t working so hot.
I just wonder, still, if the energy thing will come up as a result of Tesco’s move. If so, maybe you now have a little reasoned ammunition to counter the whole energy drain thing.