Many have failed to attract customers in trying to bundle energy with other retail products. The Europeans may have found the right model.
Alex Briones is a principal with Booz Allen in the energy group, based in London. Matthew McKenna is a partner with Booz Allen in the energy group, based in Houston. Neil McArthur is a partner with Booz Allen in the energy group, based in Amsterdam.
Some experimenting by European energy companies is occurring in what is called the broad multi-utility concept-in which electricity and gas companies are building partnerships with other retailers or service providers, developing new offers together.
For example: 1) retailers growing into banking, financial, travel, and energy supplies, 2) telecoms converging with media, banking, and energy, and 3) electricity companies selling gas, telecom services, and exploring the possibility of providing water as well.
Those markets are reshaping, and vertical sectors are converging along customer needs. This convergence trend is a potential threat to any business. Incumbents, particularly traditional electricity/gas/water distribution companies, face a challenge that amounts to completely reinventing their business in terms of customer acquisition, product development, distribution channels, branding, and pricing.
Multi-utilities are emerging as a way to improve two key performance drivers in the mass residential marketplace, namely acquiring customers and servicing them. Several recent developments explain the significant activity in this area.
Deregulation is transforming the value chains of some of the most important basic services for the home. In the last 10 years, there has been an extensive liberalization in telecom, electricity, gas, and cable TV sectors.