Waiting for certainty about smart could expose P&Us to serious risks — timely decisions are needed about how to adapt business models.
So what are the key implications for P&Us from our consumer research? In the short term, they need to develop a customer value proposition for smart meters and communicate it clearly. Consumers want to know what's coming and what potential benefits smart technology might bring for them.
In the longer term, P&Us must address the worrying gaps between our consumer research and our sector research. While consumers were positive about smart, they were negative about energy suppliers and the smart services they are willing to buy from them, and this situation jeopardizes the sector's objectives for smart.
To avoid being pushed to the sidelines in a future smart world, utilities need to:
- Challenge their assumptions about customers: P&Us must work harder to earn their customers' trust, and build stronger relationships so they gain permission from consumers to enter the smart world.
- Fill skills gaps and develop one vision: P&Us rated themselves highly on technical and strategic skills, and less well on skills like innovation and branding. All these skills are needed to succeed in smart – and strategic, retail and implementation teams need to cooperate around a shared smart vision.
- Establish new partnerships: Because of limited trust, consumers will only buy energy-related services from P&Us. This means P&Us need to find the right partners to work with, especially trusted brands that have succeeded in times of industry transformation.
- Revisit business models: P&Us must ask themselves if their current model is viable in the long term. There are three options – business as usual, improving customer focus and a retail exit strategy.
Ernst & Young can help you along your journey to smart, by assessing which route is right for your business and helping you implement change successfully.