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 customers’ 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:
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.
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.
Want a sneak peek of our new Utility Marketplace launching next year? Contact us to schedule a meeting today!