The e-commerce boom has not only expanded consumer choice and shopping options, competition has proliferated as well. As energy utilities look to strengthen relationships with their customers, many are launching marketplace websites to sell energy-related products and services.
The e-commerce boom
In the face of the coronavirus pandemic, e-commerce has experienced massive growth. In fact, total online spending reached $82.5 billion in May 2020, which is up 77% year-over-year. E-commerce sales are projected to grow by 20% in 2020, accelerating by five years the expected shift away from physical stores.
While online shopping is rapidly growing, energy utilities still face an uphill battle to break through the crowded field of marketplaces dominated by titans like Amazon and Walmart. This competition, coupled with the fact that the average e-commerce site conversion rate is between 2% and 3%, reinforces how energy utilities are fighting for a slim share of a very crowded market.
Though challenging, energy utilities have a few competitive advantages over established e-commerce players and can play a role in two distinct marketplace categories:
- Project marketplaces connect customers interested in energy efficiency solutions with certified professionals. These marketplaces include installation services for EV charging stations, solar panels and even smaller efficiency projects such as tankless water heaters.
- Product marketplaces are e-commerce-style websites where customers can purchase smart thermostats, ENERGY STAR® appliances, LED lighting, advanced power strips and other efficiency-related products directly from their energy utility.
A trusted marketplace for energy products
Energy-related marketplaces serve a specific niche, but utilities can use this to their advantage. If you search on Amazon for LED lightbulbs, you’ll find more than 10,000 results. However, there are few recognizable brands to choose from and it’s hard to compare the many features and prices.
Your customers are busy and don’t have the time or patience to wade through the overwhelming number of options. In comparison, your marketplace offers fewer products that have been vetted by your energy utility, ensuring authenticity and reliability. Customers want a simple recommendation they can trust, and you can provide that.
How to market your energy utility marketplace
In addition to increasing revenue, marketplaces help energy utilities improve brand awareness and increase customer adoption of energy efficiency products and services. In order to fully realize the potential of these marketplaces, energy utilities should implement a multifaceted marketing strategy to drive awareness and traffic — and make every visit count with sales conversions.
1. Email campaigns: This is a tried-and-true way to drive customers to your marketplace and increase conversions. These campaigns are strong performers with a benchmark open rate of 26% to 29%. Engagement is also high with a click-through rate of 2%, which is 67% higher than benchmark. Questline performance metrics show click-throughs on marketplace emails increased by 25% from last year.
2. Content marketing: This is another strategy for boosting traffic to marketplace sites. By adding calls-to-action to engaging and educational content, energy utilities create an organic way to reach customers. For example, include a CTA to your marketplace in an article about smart home technology or an infographic featuring energy-savings tips.
3. Abandoned cart emails: Emailing customers who have abandoned shopping carts is a successful strategy for driving incremental conversions. By sending an automated message, you can offer additional incentives such as a coupon to complete the sale at a low cost. These easy-to-implement emails achieve success rates between 27% and 30%.
As more customers choose to shop online, energy utilities benefit from taking advantage of this e-commerce opportunity. While it can seem like an uphill battle to compete with colossal retailers, energy utilities should use their industry expertise to their advantage. Your customers trust your energy utility and the products you recommend — and that’s a great place to start when promoting your marketplace.