Utility Week

INTERVIEW Seizing the golden opportunities Retail utilities must seize their Apple moment, or risk disappearing into irrelevance, believes Capgemini's Head of Energy Retail UK, Carl Haigney. Whilst ongoing economic and market uncertainty have done few favours for the industry, they have also proved the wake-up call retailers needed to take an urgent, strategic look at long-term opportunities up ahead, he says. "The big utilities are getting better at recognising the needs of their customers. "They recognise customer sentiment is becoming more powerful. It's driving business behaviour. And companies are trying very hard, but they do need to somehow rebrand, to recreate themselves in the digital world with green propositions that customers are really inspired by. Retailers that do something about it, will get a greater market share." The growth in demand for EVs, says Haigney, is a case in point. Whilst early adoption had been slow – partly due to availability and range concerns – demand is rising as battery issues go away and model availability dramatically increases. "It's starting to open new opportunities for retailers, together with solar and battery storage. The retailers of the future will be the ones that grab the zero-carbon propositions – but take them further. "Because there's an evolution going on. We're at the fi rst stage. Next stage is enabling customers to fully become prosumers, to make their own electricity and sell surplus. "Currently, there's a storage issue around becoming self-suffi cient, but batteries are coming down in price. In four, fi ve years' time, it will be routine for new houses to have batteries, or consumers to be buying them to store power they've generated or purchased when it's cheap." This could also revise thinking around future power outages, with millions of EVs offering potentially huge levels of distributed on-demand capacity. "Basically, energy customers are becoming ever more powerful and retailers have to start thinking a lot broader – and not just with millennials. The big six tend to be trusted among the older demographic – but even that is starting to wane." A cursory tale is the telecoms industry, where mobile telephony proved a rapid game-changer for incumbents, resulting in spin-off companies such as O2 which has, via the O2 arena and sponsorship of the England rugby team, positioned itself as a lifestyle brand. "Larger energy companies must transform their image by showing consumers they, too, are lifestyle enablers and environmentally conscious. Most are starting to realise they will disappear unless they capture that new market and the hearts and minds of customers." They must play more to their strengths too. Whilst they may have some size disadvantages, they have millions on their databases and decades of customer intimacy. "They should be rubbing their hands with glee. But they need to crack on, as unless they do something radical, they're not going to have that customer base in the future. If they do it and fail, then at least they've tried. If they don't do it then the shareholders will take their revenge, I think." Just as Apple saw a chance for hosting and facilitating iTunes, there's an opportunity for enabling people's purchase of energy, believes Haigney. Needs will vary and there will be a role for a broker, right at the heart of the industry. Capgemini's message is to work from a consumer perspective, to harness client personas via their websites, in the same way as retailers do within other sectors. The big six have vast amounts of customer data, he says, even on brands and ages of appliances, on consumption. "It's about companies using that intel but also making themselves easy to buy from. They may be able to guarantee a customer is on the best tariff or insurance policy, but that information is often buried away somewhere in their systems. "We take two approaches – our in- house design service can work on the whole digital enterprise. But, equally, we urge utilities not to neglect legacy – we can feed, water and optimise that in a safe way. Because there's gold buried in those systems, information that could be used to sell future products. It's just knowing where to fi nd it. "If you just simply switch off the legacy systems, you're throwing all those nuggets of information away. If you maintain it but do nothing with it, you just have a legacy cost on your books. Let's treat it properly – as an asset for the business." Taking such strategic leaps is hard, agrees Haigney. "Yes, repositioning is a big bet especially in uncertain times. But if they don't do it, we're going to see the smaller players of this world buying the bigger players. Because intrinsically they've got more market value. "You're never going to change the world by doing more of the same."

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