- Nov 22, 2021 7:58 pm GMT
In the last decade, customer purchasing behavior has changed dramatically. When the coronavirus pandemic hit, ordering goods online shifted from a luxury to a necessity, with online retail giants like Amazon posting their most profitable year ever. Simply put, online shopping is what today’s customers have come to expect from everyone, including their utility.
E-commerce stores cater to every kind of consumer, and according to a survey completed by Shopify, e-commerce is expected to generate a whopping $4.5 trillion in sales in 2021 alone. To meet this need, utilities should expand their offerings to better supports customer’s whole home comfort, electrification, and automation needs, while also making it easy to identify and purchase both efficient products and more complicated projects. Ease of purchasing, along with the ability to offer product bundles, program enrollment, and even installation scheduling, provides an enhanced customer experience while also allowing utility marketplaces to expand into new areas, becoming a trusted commerce resource for their customers.
Utility marketplaces have historically offered traditional products suitable for do-it-yourself installation, such as LEDs, showerheads, faucet aerators and smart thermostats. But the emerging trend is to expand on those offerings and provide more innovative products and services, along with discounted bundles of related products. Think:
- EV chargers paired with smart thermostats, smart speakers, and installation services to help drive beneficial electrification initiatives and activate enrollment in a demand response (DR) program for a generation and transmission cooperative, or
- Smart sprinklers coupled with smart outdoor LEDs to help activate a time of use program for a municipal electric and water utility, or
- Air purifiers combined with a smart plug and a subscription for replacement filters to help activate a healthy homes program for an investor-owned utility.
When a utility offers a marketplace to its customers, it paves the way to providing products and services that correspond to the demand-side management (DSM) programs they are offering. This can be activated by adding more innovative products and program enrollment features—all from the same online store, and all through a single checkout process.
Thinking outside the utility marketplace box has proven effective. Metrics for marketplaces with more innovative offerings show an increase of visits of as much as 38% and an increase of shopping behaviors, like “add to cart,” of as much as 17%. Product bundles have continued to gain traction over the last year, with sales increasing as much as 72%, making them some of the most popular items sold. Additionally, marketplaces that include an installation option with DR enrollment see a 233% higher conversion rate than average, whether the customer takes advantage of the installation services or not. What’s more, abandoned cart rates for marketplaces with more innovative offerings are down as much as 9.4%, resulting in increased sales and helping to drive increases in average annual Net Promoter Scores.
As we approach the end of the year and the upcoming holiday shopping season, utilities can use their marketplace to not only meet savings goals, but also strengthen awareness with their customers and encourage conversion throughout their DSM portfolio. According to Quantum Metrics, 53% of consumers are planning to spend $1,000 or more this holiday season. In anticipation of Black Friday and Cyber Monday sales, make it easy for those dollars to be spent in your marketplace by offering an expanded product selection, thoughtful product bundles, and integrated services to activate other program types.
Utility marketplaces are growing exponentially with current annual product sales estimated at $140 million. Guidehouse insights estimates the market will increase to $250M domestically by 2029. In order to meet this trend, utility marketplaces need to continue to evolve in product offerings, services, and design to meet growing customer expectations.
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