Millennials have surpassed Gen X and the Baby Boomers to become the largest generation in the U.S. workforce. More than one in three American workers are now millennials, those born between 1980 and 2000. As these individuals form households, they represent a major opportunity for energy utilities.
New research from Accenture has found, however, that while millennials are interested in new energy-related products and services, they want such products and services to be readily available, immediately understandable and personalized to their own values and needs.
That is good news for energy utilities, because it creates a source of future value. However, engaging with millennials and building lasting relationships will take a lot of work by utilities, to meet millennials’ requirements.
Millennials place a high value on convenience, seeking “set and forget” solutions and new technologies. Globally, they are less willing than their older counterparts to manage their energy consumption on their own, with only six percent of millennial respondents saying they prefer to do so, as opposed to 11 percent of the 35 to 54 age group and 17 percent of the over-55 group.
Millennial energy consumers will also be the first to adopt the latest products and services. Nearly a quarter (24 percent) of millennials surveyed worldwide are early adopters, compared to only 17 percent of those aged 35 to 54 and just 7 percent of those over the age of 55.
In the U.S., 58 percent of millennial respondents said they are likely to sign up over the next five years for an application to remotely monitor and control home elements, versus 22 percent of those over 55, demonstrating strong interest in next-generation home energy solutions. Fifty-seven percent of millennials–three times as many as those over 55–are also likely to sign up for solar panels in the next five years.
Millennials nationwide are significantly more demanding than older consumers. For example, 95 percent said they would be more likely to consider switching to a different energy provider if their energy provider was not able to provide a seamless consumer experience – one that is consistent, effortless, and intuitive. By comparison, 45 percent of consumers over 55 said the lack of seamlessness would cause them to consider switching. Similarly, 89 percent of U.S. millennials said their providers’ inability to provide a seamless experience would discourage them from signing up for additional products and services, versus 59 percent of consumers over 55 who voiced these concerns.
So, the opportunity is there for energy utilities. To convert this to increased sales of new products and services, however, they have to become more agile at engaging with millennials. We see three key principles that can guide utilities in their efforts to develop and market suitable products for this high-potential but demanding generation.
1. Provide a personalized experience. Millennials want to be served on their own terms, on an “anytime, anywhere” basis with a high degree of interaction. They attach more importance than older demographics to a personalized experience across digital channels, along with access to the latest digital technologies that enable them to interact with their energy providers. Our research showed, for example, that 85 percent of millennials would be interested in an online personalized marketplace developed by their energy provider to select and purchase energy-related products and services.
2. Be differentiated to consumers. In a world of mass-scale production, energy providers can differentiate themselves by offering consumers the ability to buy unique, personalized products. The results showed that 81 percent of millennials are likely to be more satisfied if offered an in-home assistant and monitoring device that provides energy usage feedback and that suggests customized new products and services offers. And to be hyper-relevant, utilities need a more dynamic, granular view of each customer, created through the use of advanced analytics.
3. Provide opportunities to share products and services. Millennial consumers seek new ways to share products and services and obtain benefits without the burden of ownership. They also place a high value on intangibles such as trust, community and collaboration. The survey research showed, for example, that 47 percent of all consumers globally are interested in community solar programs that are managed by third parties and allow them to benefit from solar power, even if they do not have solar panels on their own properties.
Beyond keeping these guidelines in mind, it will take more than investment in digital technologies for energy utilities to make the kind of connections needed to build long-term relationships with millennials. Energy utilities have traditionally seen assets such as generating plants and distribution systems as the core of their businesses.
The challenge now is to move the focus to people–particularly millennials–and make them the center of a new business strategy. The energy utilities that understand what millennials want and then deliver against those expectations will be best positioned for profitable growth in this new customer-centric environment.
About the author: Scott Tinkler is managing director, North America Accenture Energy Consumer Services Lead, at Accenture.