Meeting the needs of “digital natives” is a new challenge for energy management and supply. How are forward-thinking companies seizing this opportunity?
Rarely have the needs and desires of consumers been as fragmented as they are now. An immense generational divide has opened up – driven by relentless technological innovation – and organisations in all industries must adapt their processes to remain competitive.
The newest segment of consumers and employers are known in some circles as “digital natives”, young people who have grown up with computers, the internet, smart devices – and treat their use as second nature. Meeting the needs and expectations of this group of millennials – people with a strong interest in convenience, flexibility and environmental issues – means providing energy management solutions that reflect those values.
Some forward-thinking energy suppliers are already rising to this challenge, introducing innovative new products and engagement strategies that meet the needs of every consumer regardless of their background or generation.
New approaches to energy supply for digital natives
A 2016 study from Deloitte examined the prospective impact of digital natives on the energy sector, finding that demand for change within the industry is significantly more urgent amongst the 21-34 years old age group than any other generation. Some of the more revealing results regarding energy management include:
- 51 per cent of digital natives feel strongly about joining programmes to reduce energy consumption by 10-15 per cent in the next 5 years.
- 57 per cent were interested in smart meters allowing them to manage energy consumption and reduce electricity bills.
- 49 per cent favour computer or smartphone applications that help improve energy efficiency in the home.
The ability to meet these new demands will be the defining factor for both existing energy providers and any new entrants into the sector. Innovation in energy management is already underway in some markets, however, showing that engaged companies have already identified the challenges coming from digital natives.
The ability to meet the demands of digital natives will be the defining factor for energy providers.
Innovative energy management solutions in action
In the UK, French energy startup Engie has unveiled a new tracker tariff linked to wholesale prices in May 2017, seeking to provide greater transparency for existing and prospective customers. Unlike some competing schemes rolled out by other providers, Engie’s platform promises that customers will be moved to its cheapest deal when fixed tariffs come to an end, rather than more expensive default levels.
“Wholesale price changes are passed on,” said Paul Rawson, Engie’s head of energy solutions speaking to The Guardian. “I think it’s a new innovation, and a new ability for customers to get real price transparency and restore a bit of trust in the industry.”
Engie’s tracker offering follows that of Octopus Energy, another new supplier that attracted an impressive 90,000 customers in its first 12 months of operation.
Further innovation in the UK is coming from new digital renewable energy company Pure Planet, established by the team behind Virgin Mobile, widely credited with shaking up the UK Telco market with lower fees and better service. Pure Planet is a digital-only brand using an AI bot to provide customer service. The energy startup is looking to offer low prices, charging customers an identical rate to what Pure Planet pays for energy on the wholesale market plus a small monthly membership fee that includes the standing charge. By offering only 100 per cent renewable energy, Pure Planet taps into another key demand of the digital native – sustainability.
— Pure Planet (@joinpureplanet) June 14, 2017
How are Octopus, Pure Planet and Engie able to create such unique digital-first offerings and grow so quickly? Their approach has been to enter the UK market with a focus on how they can remain lean, both operationally and in their systems and processes. By opting for a market-ready yet flexible back office software together with best practice taken from other industries, they can innovate at a faster rate than the traditional energy companies, who are often trapped with cumbersome legacy systems and processes.
The signals are there – digital transformation is essential to keep energy companies relevant and competitive.
Note: Pure Planet, Octopus Energy and Engie are customers of Gentrack’s Junifer Systems.