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Consumer data right – powering a shift in the energy market

We're in the middle of an energy transition. The energy system is being disrupted, driven by shifting consumer preferences, regulatory changes – including the consumer data right (CDR) opening up energy data – and technology-enabled innovation.

CDR is set to radically reshape the energy industry by the end of this year. Introducing CDR will allow consumers to authorise third parties to access their energy data. This creates the potential for a whole range of new customer focused services. It will no longer be a case of comparing apples with oranges — consumers will be able to easily compare energy offers and switch quickly. Switching providers will likely be as simple as clicking a button on a website, email or app. 

With the power of energy data in the hands of consumers, energy retailers will need to work harder for their customers with competitive offers and services or risk losing them. Retailers must take the opportunity to move closer to their customers by using this data exchange to create value and drive growth. 

By opening up their data, energy retailers will enter a new era in compliance, innovation and competition in the market. 

For those who are ready to move beyond compliance and compete and grow, there will be immense opportunity to revolutionise the market with innovative retail products, dynamic pricing models and delivery of services. 

Energy retailers will need to quickly respond to potential collaborators and competitors in the market. For the first movers, there will be an opportunity to further expand into multi-sector collaboration and alliances. Energy players will be able to leverage their platforms and offerings to create new customer value in other industries including telecommunications, financial services, and smart cities. Collaboration and competition will not be limited to traditional organisations from the energy sector. 

Are you ready to take advantage of the changes that are coming?

Now is the time to assess the market, predict how CDR will unfold and what it means for your relationship with customers. As custodians of data, energy retailers must be ready to share. Learning from the lessons of the banking sector and adopting proven solutions will speed up time to compliance, reduce risk and accelerate strategies to secure and expand their customer base.

The sharing of more accurate and granular data is not only an opportunity to better understand customers but to create new markets and take up new revenue streams.

We are already seeing evidence of new entrants to the energy sector where data and an existing customer base create opportunity.

Although compliance is complex and must be a priority, there is an opportunity to derive real value from consumer data. While retailers can simply meet their obligations and leave it at that, those that do will be left behind. Those that go beyond compliance will remain competitive and future-proof their business.

In the UK where a similar ‘open data’ model has been implemented energy retailers have leveraged data to deliver more efficient energy services to customers while simultaneously engaging with them around their net zero emissions strategies.

Shifts in technology and data position the customer at the forefront of service design. The disruption of the taxi industry by Uber is a great example of how technology and data allowed a new entrant to a previously closed market where a customer centric service has created an entirely new model. Netflix identified the opportunity to leverage technology and data revolutionising the entertainment industry, displacing Blockbuster and other historically dominant players.

Energy retailers must rethink their relationship with their customers and identify new and better products and services that go beyond today’s experience. Trust will be a key differentiator for energy companies – protecting data and privacy will be non-negotiable. Companies who excel at greater personalisation of their products and services will do well.

It is no longer a question of CDR compliance. Now is the time to venture into new markets, attract new customers and leverage high-value data. Those energy retailers who are ready to do this will lead the space and thrive.

Get in touch to understand how Deloitte can help your organisation unlock the value of CDR.