Consumers are going digital, and there's no way to stop it.
For traditional power companies, this is a doubled-edged sword. On the one hand, digital technology is changing the nature of consumer engagement, which in turn is changing traditional business models and opening the door for competitors.
But on the other hand, a new survey from Accenture shows that digitally engaged energy consumers can unleash far more business value for utilities that embrace digital technologies than those that don’t.
A poll of more than 11,000 energy consumers in 21 countries revealed that 41 percent of digitally engaged consumers (people who have interacted through digital channels within the past year) trust their energy provider to help them optimize their energy consumption, versus 31 percent of non-digital users.
Digital consumers are also happier with their service. Nearly 70 percent of digital consumers say they are satisfied with their energy provider -- 14 percentage points higher than those who do not use digital channels. In addition, 42 percent of digital consumers say they would recommend or promote their utility, versus just 13 percent of non-digital users.
Where the digitally engaged energy consumer unleashes more business value
Digital consumers are highly likely to adopt new technologies. The survey found 73 percent of digital consumers would sign up for home energy generation products, 70 percent said they would sign up for automated home energy management devices or services, and 80 percent said they would participate in an energy management program.
It’s interesting to note, however, that roughly half of all non-digital consumers said they would also adopt these products.
Products and services at the grid edge constitute the domain where traditional energy providers are facing heightened competition. Energy is reaching new levels of self-sufficiency and convenience. Ikea, for instance, now makes furniture with built-in wireless phone charging, and several companies offer backpacks equipped with solar panels for phone charging on the go.
Consumers are starting to expect this same level of freedom and flexibility with their home energy use. Increasing adoption of rooftop solar, electric vehicles and battery storage (like the Tesla Powerwall) is making energy "prosumers" far more prevalent. At the same time, Apple, ADT, Google, Samsung, Verizon and Wal-Mart are partnering with new and existing hardware and software providers to develop new home energy management solutions.
These advanced energy products and services are no longer niche opportunities -- they’re fast-growing markets where energy providers can offer their customers new value propositions. In competitive markets, utilities can create new revenue streams by offering digital solutions, such as solar, energy-efficiency tools, or bundled home services. And in regulated markets, utilities can participate in innovative partnerships or digital information services.
While they might not have expected to be competing with popular brands like Google or Apple, energy providers currently have an advantage over new market entrants: they are more trusted.
According to the survey, 36 percent of respondents said they trust their utilities, whereas 30 percent said they trust online service providers and 25 percent said they trust home service providers. It’s noteworthy that consumer groups, academic associations and environmental groups were the most trusted overall, which shows there’s room for all industry participants to improve their performance.
Utilities are trusted providers of new energy products and services
“As energy and everyday devices become increasingly connected, an unprecedented amount of personal information about consumers’ habits and their households is becoming available, magnifying the importance of digital trust,” said Tony Masella, global managing director of Accenture Energy Consumer Services.
Energy providers have an opportunity to leverage their position in the marketplace and decide what role they want to play in selling digitized technologies and/or maintaining platforms to connect them.
“In addition to ensuring customers’ confidence in their data privacy, energy providers can use this information to develop more personalized products and services,” Masella said. “In fact, they must do this to remain competitive, given that barriers to entry are coming down and utilities must now compete with startup digital retailers and new entrants from other industries, which are offering new and bundled solutions and services.”
So while the opportunity exists, utilities need to step up their game. For instance, 41 percent of survey respondents said their digital experience with their energy provider was fraught with more difficulty than their dealings with other types of providers. Consumers increasingly want easy-to-use apps and social media channels to find information.
“The best digital solutions take the power of information technology and put it in the hands of the broader ecosystem -- and this ecosystem includes management, front-line users, end customers, partners and developers,” according to the report.
“The fundamental shift in mindset from 'me' to 'we' means that utilities and energy providers must embrace a mantra of not building it themselves, but instead leveraging what is available through the broader ecosystem to address their business requirements.”