Technology and customer expectations are rewriting the future of energy, and keeping up with this utility industry evolution means developing new, innovative, revenue-generating products and services. One of these new offerings is an e-commerce marketplace called the SMUD Energy Store.
SMUD Energy Store, opened last October, offers Sacramento Municipal Utility District (SMUD) customers products and services in six categories: smart thermostats, connected home products, lighting, water-saving items, outdoor living products and advanced power strips.
While profit isn’t the main driver for SMUD’s Energy Store, providing smart products and technology platforms are helping us give customers more choice, flexibility and control — how, when and where they want it. The drive to innovate comes from our passion to provide value to our customers and community.
STARTING FROM SQUARE ONE
When we considered the concept of a store, we first turned to our customers to help us imagine what a SMUD online marketplace could be. We hosted an online ideation exercise with customers, where nearly 100 marketplace concepts were generated, evaluated, refined and ultimately narrowed down to the top 10 ideas. The top idea helped provide the vision of a SMUD online marketplace.
With a vision in place, SMUD’s market research and analytics teams dove into a deep analysis of SMUD’s digitally inclined customer segments. This study of customer preferences and propensities helped drive the development of a marketplace to best serve the needs of customers in SMUD’s most important and growing customer segments.
Extensive online user testing helped us determine the right business model for SMUD Energy Store. For example, customers overwhelmingly preferred a direct sales platform through SMUD to purchase energy-related products over referrals to other vendors.
In addition, customers expressed a desire for:
• well-vetted products with competitive prices;
• clear and comprehensive product descriptions;
• a simple and intuitive user interface; and
• rebates applied instantly at checkout.
In partnership with Simple Energy, a national leader in providing utility-branded marketplaces, we set out to make it easy for our customers to find affordable, energy-saving and smart-home products for their homes and businesses online at SMUDEnergyStore.com. Once the business model and platform were determined, we turned to our customers to get their input on the types of products and services they’d most likely buy. We also researched what they expected in terms of shipping, delivery, customer service, online rebates, discounts and savings. Customer research data also helped us name the store and informed our marketing campaign concepts.
OPENING THE VIRTUAL DOORS
SMUD’s partnership with Simple Energy was announced in June 2017, and within three months, SMUD Energy Store was up and running. Through a soft launch, SMUD board members, employees and a small number of customers began shopping at SMUD Energy Store. The store officially opened to all customers in October 2017.
To create a seamless shopping experience, SMUD Energy Store offers instant rebates on qualifying products applied directly in the customers’ shopping carts. Free shipping is offered on orders over $49 and a flat $5 fee applies to orders less than $49.
SMUD Energy Store also offers buyer’s guides, online customer service chat, product reviews and special promotions for SMUD’s low-income customers. To help customers make the best energy decisions for their home, we also offer FAQs, tips, step-by-step instructions, workshop resources and equipment operating instructions.
INTEGRATED MARKETING IS KEY
Our public launch was supported by a two-month integrated marketing campaign that included a robust email marketing strategy for SMUD customers with online accounts, digital and social media advertising, advertising on SMUD’s website (smud.org), 15-and 30-second TV and radio spots, outdoor billboards, bus signs, print advertising, bill inserts and print newsletter communications.
The timing of our launch coincided with the online holiday shopping season, allowing us to offer competitive Black Friday deals and seasonal holiday light promotions. During Black Friday week alone, November 19-25, SMUD Energy Store sold more items than all the weeks combined since opening, with smart thermostats leading all sales.
THE RIGHT OFFERINGS AT THE RIGHT TIME
As our Chief Customer Officer Nicole Howard puts it, “Utility customers have higher expectations because of the rapid deployment of technology in other areas of their lives. They expect to do business with their utility how, when and where they want to.”
It wasn’t long ago that utilities took a one-size-fits-all approach to delivering new products and services to their customers. Our approach to SMUD Energy Store was anything but. Developing and launching SMUD Energy Store proved that we can give customers the control and choice they want.
“Our research tells us that our largest customer segments tend to be digitally driven, wanting self-service options where they can do business with SMUD online,” Howard added. “We’re listening and paying attention to their motivations, drivers, wants, needs and preferences; and we’re putting a priority on enhancing all of our digital-first initiatives.”
Half of all SMUD Energy Store website traffic comes from email marketing campaigns, which illustrates that digital is the channel of choice for targeted SMUD customer segments.
RESEARCH RESULTS IN SUCCESS
Customer feedback has been positive. In almost 1,000 post-purchase survey responses, customers responded with an average score of 9.1 out of 10 when asked how likely they are to recommend SMUD Energy Store to a friend. Through ongoing user testing, customer feedback has helped us refine several aspects of the store, including page layout, navigation and the checkout process.
Currently, we’re surveying customers about what SMUD Energy Store should offer in the future. By leveraging the market research and listening to our customers’ requests for products and services, in just under six months, SMUD Energy Store is exceeding expectations:
• Reached $1 million in gross sales just two months after opening (out of 1.3 million e-commerce companies, only 13 percent have more than $1 million in online web sales).
• Sold more than 10,000 items through nearly 7,000 orders.
• Processed 1,600 rebated LED packs and 5,100 rebated smart thermostats.
Top-selling items include Wi-Fi learning thermostats, connected home devices, LED light packs and Christmas lights. We’re constantly monitoring what’s selling well and adjusting to what our customers tell us they want and need.
WHERE WE’RE GOING
With customer input, we have a lot planned for 2018 and beyond for SMUD Energy Store to bring even more value to shoppers.
This includes expanding our store to include home services, where customers can learn more about energy-efficient home improvement projects, access to SMUD’s rebates and financing, and the ability to connect with a qualified local contractor through HomeAdvisor — an online resource of trusted home improvement professionals.
Ali Crawford, manager of SMUD’s product design and development team, said, “We’re frequently expanding our customer offerings as new technology comes to market, and as consumer trends and preferences evolve.”
Guided by ongoing customer and market research, SMUD Energy Store will continue to evolve to ensure products and services keep pace with customers’ needs and expectations.