Shifting customer dynamics are changing in extraordinary ways in the energy industry. A changing of the guard from Boomers to Millennials comes with a shift in fundamental needs and wants, influence, and purchasing power. As Millennials start overtaking Boomers in number, we are seeing a greater demand for sustainability and green solutions, and a continued need for low and more transparent pricing.
This has left us with a very important question; “how can the energy industry meet the demands of customers while playing a role in creating a sustainable future?”
To understand what is driving changes in customer expectations and behaviours, we must first look at what is happening in the economy on a global scale.
The continuing effects of COVID-19 and the war in Ukraine have created a political and economic landscape that includes high inflation, low unemployment, increasing interest rates, and commodity shortages.
This, coupled with recent bushfire and flood events in our country has highlighted the criticality of climate change, bringing the need for urgent action to the front of customers’ minds.
In response, we are seeing customers becoming more conscious of their purchasing decisions than ever before, driven by financial pressures and social beliefs. Historically, energy was viewed as a low effort ‘grudge’ purchase, however we are now seeing customers actively seek sustainable, digital, and efficient renewable solutions. While there has been significant investment into renewables and other sustainable energy infrastructure, these projects usually take years to execute and connect to the grid, and customers are just not used to this pace of change, and are taking matters into their own hands.
There is a huge opportunity for organisations to shake up the industry through introducing new methods of purchasing. We believe that new products and services such as bundling, subscriptions and home controlled systems will be at the heart of the energy transition over the next 5-10 years. Additionally, the overall experience of purchasing and consuming energy is a major area for organisations to target. What would the perfect service look like for the customer? Is it seamless, digital, and transparent?
Speculating even further into the future, community energy sharing is another area that the energy sector could evolve towards, with smaller, independent networks in neighbourhoods supporting residential generation, storage and trade of energy. There are already real-life examples of these community hubs in rural Australia, so we know it can work – the next challenge is how the industry can support this at scale.
Ultimately, we are currently in the midst of an exciting once-in-a-lifetime season of transition. The way in which we buy consume and trade energy is going to be completely revolutionised over the next 5-10 years. Organisations should be proactive and on the front foot with this transition to the future of energy because once the shift has been made, the first movers will own this space.
Listen to Sanj Perera and Laura Foo discuss these thoughts, ideas, and opinions in depth on our Candid Conversations podcast.