How will energy utilities capture the modern consumer?
Today’s consumer expects instant, convenient, and customized services. They wake up, check a Fitbit, sleep app or other wearable technology for data about their sleep patterns. They immediately proceed to check the weather, news, and social media for updates on their phone. Even before breakfast, the average consumer sees hundreds of advertisements. To get to work, consumers can order an Uber, check the fastest route on Google Maps or Waze. Do some banking, listen to a podcast, or remotely order a Starbucks coffee on the way – the choice is theirs.
Through each one of these interactions, and thousands of others, consumers’ expectations are fundamentally changing. Consumers are increasingly expecting high levels of convenience from their energy utilities. [inlinetweet prefix=”” tweeter=”@marsdd” suffix=”#futureofenergy”]Today’s energy companies can either capitalize on these consumer engagement opportunities or get left behind[/inlinetweet].
But energy utilities face a myriad of challenges in transforming their customer relationship, including increased pressure to reduce prices, threats of load defection as a result of the declining cost of renewables, and the integration of new technologies. Utility executives are asking: Who is my customer and what are their changing needs? Do I treat non-traditional energy players as partners or competitors? Where should I invest my limited resources?
Moving forward, utilities can learn from how other sectors are being similarly disrupted, and how major players are adapting to capture the modern consumer.
Finance & Banking
New technologies and consolidated platforms in the financial sector are empowering customers and disrupting traditional institutions. Industry incumbents are exploring how they might adapt as fintech startups facilitate crypto-currency, artificial intelligence, and biometric authentication. Experts at the 2014 Financial News and WSJD Fintech Conference predicted some major advancements over the coming years. Robot advisors will soon be assisting with financial decision-making, financial services will be decentralized and bank accounts transferable. Customers will ultimately have more choices, and be able to lend, borrow and trade over social networks.
Consumers are increasingly expecting high levels of convenience from their energy utilities. Today’s energy companies can either capitalize on these consumer engagement opportunities or get left behind.
We’re not that far off from these predictions becoming reality. Peer-to-peer loans are already available at Fidor Bank. The German bank supports an open interface for customers and app developers, offering services like credit transfers over Twitter. Meanwhile in Poland, Idea Bank has created the “Uber for money”. Customers can request access to an electric car, repackaged as (literally) a mobile ATM. The US-based Nusenda Credit Union has combined micro-lending and community sponsors in an effort to reach low-income entrepreneurs.
Alternative sources of capital are increasingly available across Canada and large companies like CIBC are starting to respond in collaborative ways. At the MaRS Discovery District, CIBC’s Live Lab provides a soft landing space for fintech startups, providing the unique opportunity for CIBC to engage with new market entrants.
Legal startups and innovative law firms are changing how legal services are delivered. Internet applications have increased options for consumers and addressed inefficiencies for lawyers. ContractExpress, for instance, offers contract automation software. CyberSettle’s online portal allows faster dispute settlements. Rocket Lawyer provides a subscription platform where clients can access legal forms, documents, help articles and discounts with local attorneys. And in Canada, LegalZoom offers small businesses and entrepreneurs virtual assistance with incorporation.
Firms are also starting to take advantage of freelance lawyers, digital process mapping, and flat-rate billing. A firm in Toronto, SkyLaw LLP, has created a collaborative model that provides subscription-based resources and workspace for independent practitioners.
These new technologies and business models are providing viable alternatives to engaging traditional legal services. As increasing efficiencies in legal services reduce demand for traditional lawyers, firms will benefit from hiring new talent representative of a wider skills and knowledge base, like business management, information technology, and the ability to analyze and consider the impact of global trends on the core business.
“The world is moving so fast these days that the man who says it can’t be done is generally interrupted by someone doing it.” – Elbert Hubbard
The Future of Health is fundamentally a shift from a legacy paradigm centered around “the system” (doctors, hospitals, administrators, governments, insurers), to one centered instead around the “citizen” (also called end-user, patient, consumer, taxpayer, employee…).
With this shift comes many other changes, driven by consumer demand, availability of technology, and the increasing inability to fund health services for an aging and unhealthy population. These changes will include:
- A shift from designing healthcare in a “one size fits all” model, to being so personalized and precise that it can be designed to be tailored to each individual’s unique context.
- A shift from the centralized delivery of products and health services in physical institutions (like hospitals and doctor offices), to a decentralized, de-physicalized, and dematerialized model, where there is a seamless interplay between digital and physical modalities for delivering services (also called “digi-cal”).
- A shift in the currency of healthcare from “cost” to “value” – enabling entirely new business models to be created, where insurers can pay for the results they want (i.e., better health), instead of paying for inputs such as # pills, # doctor visits, # lab tests.
These shifts are opening up a flurry of opportunities. In the Netherlands, SNS Bank worked with partners on a blockchain application that allows people with chronic illnesses to seamlessly refill their prescriptions without having to make a doctor appointment or visit the pharmacy. To keep up, traditional health players will have to rethink their business models, innovate, and deliver the 21st century healthcare experience that their customers, the same citizens who fund the health system, now expect.
Energy utilities and the modern consumer
Other companies have pivoted to meet evolving customer expectations and energy companies will need to follow suit. They will need to adopt innovative processes and technologies that offer additional value to customers. Some have already embraced new business models in the race to become future-ready.
Across Ontario, ten of the largest utilities have adopted the Green Button Standard, enabling greater access to data that can be leveraged to provide additional services, facilitate greater efficiency and savings. In Brooklyn, a private energy company is utilizing blockchain technology to facilitate solar energy trading within a neighbourhood. Companies like Nest and Ecobee are allowing customers to better manage their energy usage.
As Elbert Hubbard put it, “The world is moving so fast these days that the man who says it can’t be done is generally interrupted by someone doing it”. Increased convenience, affordability, and customer-centered products and services have raised the bar for would-be leading energy utilities. In order to succeed, the savvy utility will absorb lessons learned from other sectors and get ahead of the modern consumer’s needs. Financial institutions have demonstrated the benefits of partnering with up-and-coming start-ups. Law firms are changing their business models to reflect a changing market and healthcare is no longer “one size fits all”. The current chapter on energy utilities is still being written, but other sectors can provide valuable insights on how to capture the modern consumer.