It’s a wrap from the Norwegian retail conference!
We have been able to engage with leading energy retailers from Norway who shared their perspectives on their journey from a traditional utility to a digital service provider. The message from the retail conference in Norway was clear, but also obvious in a competitive landscape: Retailers must put customers at the heart of the business.
For pretty much all other industries, that’s been the principal rule for years. In all fairness to retailers, they have been trapped by the complexity of price mechanisms and the commodity of kWh. If we also keep in mind that even the retail companies have been dominated by engineers, it is obvious that customer experience hasn't been the core business driver.
An energy transition on the way
Looking back to my first visit to these conferences in the early 2000's, the same topics were discussed. Since then, things have changed at an evolutionary pace. But I`m very excited to see the initiatives that are already out there and underway. I want to thank and commend the organizer, Energi Norge, and their vision of leading Norway on the way to a global leadership role as the first renewable and fully electric society in the world! There is no doubt that customers are becoming more cautious and caring about climate and renewable energy resources. Technology has made smart homes and real time energy services more of a reality without costing a fortune.
To us the pattern is clear:
- Retailers are assessing their environmental, social and governance commitments and many will continue to raise the bar on carbon emissions reduction goals.
Some retailers are on their way to explore new transactive business models, to incentivize customer participation and boost grid flexibility. There is a desire to gain deeper understanding from the data which the proliferation of customer data and sensors are providing.
- More active listening and communication with customers. There are still some steps to be taken in order to fetch data (within GDPR compliance) and analyzing them to understand customers even better. Few customers really care about pricing dynamics, spot, peaks and so on. They care about service, reliability, credibility, power quality and sustainability.
- New business models are emerging. We can learn from companies like Schibsted, who are setting up a cannibalization strategy as a survival tool through e.g. the establishment of the classified advertisements website - Finn.no. Many retailers have already increased their investments in charging infrastructure for electric vehicles and analytical solutions to better integrate EVs and grid demand response strategies.
- Using existing data more actively through real insight and sharing data through open APIs. Doing this enables an ecosystem of partner opportunities. There is now less talk about Blockchain and AI, but instead a more pragmatic view on how to get existing stuff working better.
As said, there many things to be positive about, knowing that coordination with electric utilities has been identified by consumers as their top enabler for moving to clean energy resources.
Impact on traditional retailers
In a competitive environment where companies are looking to win customers’ hearts by creating seamless customer experience, how does this affect traditional energy retailers?
We don’t have a silver bullet answer, but we do have great insight to what works globally for our 100s of energy retail customers. Start with simplifying your power offers, embed them as a service, listen and communicate by aiming for less complaints, fewer dissatisfied consumers and more engagement. Be patient. More and more people are joining the energy transition.
Are you interested in Hansen's guidelines for a competitive retailer? Please take a look at our Retailer blog: Guidelines for a Competitive Retailer for more specifics.
For a more deeper dive into the European retail energy market, check out our 'Energy Transition Papers – Future of Retail' where we further explore Retailers role in the ongoing energy transition and how together we can address ways to win the new energy customer.
By Stian Madsen - Hansen’s VP Marketing and Partners in the EMEA region. Stian has been with Hansen for close to 15 years and focuses on guiding utility companies through the ongoing industry transformation, where delivering a personalized energy experience to energy consumers is a key factor.