How is COVID-19 reshaping the digital home? Five takeaways for Energy & Utilities companies.

From smart meters and thermostats to EV charging points, energy companies already have one foot firmly in the digital home, but how can they make further progress in a world being reshaped by COVID-19?

Recent EY research of 2,500 UK households, conducted over May and June 2020, provides a snapshot of how lockdown has altered behaviours within the digital home. What does it tell us about how utilities companies can help consumers to continue embracing smart home technology? In doing so, how can they fight off competition from other powerful players including broadband providers and technology companies?

Here are my five key takeaways, based on the survey and my experience working with clients across the energy industry.

1. Digital engagement is rising, even among hard-to-reach energy customers

One fifth (21%) of households say they are more engaged with home technology and gadgets as a result of COVID-19. More than one in ten consumers have tried online shopping and online health services since the UK entered lockdown. Perhaps even more importantly, 7% of UK households broke new ground by managing household bills online. Utilities companies, which traditionally have significant numbers of ‘digitally disengaged’ customers, can benefit from these new opportunities to connect.

2. The smart home market offers exciting opportunities

Our survey showed smart home products are of greater interest than they were before lockdown, with 15% valuing smart utilities more than before, 14% valuing digital assistants more highly and 18% putting greater value on video. This builds on the positive results from the October 2019 survey, which found that smart lighting, heating and security ownership had nearly doubled in percentage terms over the previous year, now penetrating nearly one in five households. The smart home therefore offers utilities companies an exciting route to growth.

3. Utilities are the most highly trusted with data

Given the opportunities described above it is good news that utilities companies are highly trusted within the digital home. The October 2019 survey revealed that 25% of households said utilities companies would be best at keeping personal data safe, ahead of their broadband provider (24%), tech-based websites (10%) and specialist technology companies (7%). More anecdotally, utilities are one of the few providers trusted to cross the threshold of the physical home. With data privacy and security fears rising, this is an advantage that utilities companies must maximise to the fullest.

4. Households are getting more concerned about data privacy and security

Utility companies’ high consumer trust ratings are more valuable than ever as COVID-19 increases data protection fears within the smart home. Over a third of households (35%) are more cautious about disclosing personal details and financial information on the internet during the Coronavirus pandemic. More specifically, over half (52%) are concerned about information captured and shared by smart home/internet connected devices. This provides utilities with an opportunity to leverage their trusted position within the home.

5. Utilities companies must close the experience gap

They may be trusted, but utilities companies are not always loved. Only 35% of respondents would be likely to recommend their utilities provider. But over half (52%) would recommend their mobile provider, 47% their streaming TV provider and 44% their broadband provider. This gap will need to be closed if utilities companies are to make further steps inside the digital home.

What next?

The risk is that if utilities companies do not cement their position within the smart home, they could lose it to well-funded competitors including broadband providers and technology manufacturers. To respond effectively, utilities companies should start by accelerating their product roadmap and reviewing their digital proposition and experience to engage better with their customers. The challenge will be to ensure they can capitalise and sustain these increased levels of digital appetite now and avoid customers reverting back to their previous, less engaged ways. Incentive and reward schemes might pose beneficial. Having done so, they will be in a stronger position to benefit from the rapidly changing and growing digital home.