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Since 2010, Simple Energy has worked to improve the relationship between utilities and their customers, with the goal of increasing the purchase of energy-efficient appliances. A new product from the Boulder-based company aims to do just that.
Today, Simple Energy announced the launch of Marketplace, an e-commerce platform that features energy-efficient products coupled with instantly-redeemable rebate offers. Simple Energy CEO and founder Yoav Lurie said Marketplace is essentially an extension of the digital marketing services the company has provided utility companies. Only now, in addition to a convenient direct messaging system, utilities can provide their customers with personal energy consumption data, energy advice and suggested energy-efficient products tailored to their unique needs.
And of course, consumers will have access to instantly-redeemable rebates, a feature distinguishing Marketplace from similar e-commerce platforms, Lurie said.
“Historically, utilities have offered lots of rebates. In fact, every utility offers millions of dollars of rebates to their customers to buy more efficient products,” Lurie said, adding that a recent report from The Nielsen Company found that less than 7 percent of consumers are accessing utility rebates available to them. “The reason that so few people take advantage of them is because it’s cumbersome.”
Lurie told a story that he said many consumers experience. A few years ago, his mom applied for a rebate on an instant hot water heater. She paid more for an energy-efficient product, mailed the rebate form to her gas company and, six weeks later, was rejected.
With Marketplace, people won’t have to worry about that. The rebate is covered at the point of sale, and the platform suggests rebate-eligible products from manufacturers like Nest, Samsung, Whirlpool, GE, LG, Philips and more.
“If the utility is offering a $100 net thermostat rebate, for example, it would be $149 instead of $249 at the point of sale,” Lurie said. “They’d be paying a lot less and it’s an experience that they’re getting without dealing with all the mess of sending the rebate into the utility.”
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No customer acquisition cost for utilities
Marketplace is beneficial to utilities, too. The e-commerce tool is white-labeled on behalf of the utilities and is built into the existing consumer engagement platform already provided by Simple Energy, which closed a $6 million Series B round in January 2014.
According to Lurie, that fact offers utilities real value and eliminates a huge pain point for many companies: getting new customers.
“We have a negative cost of customer acquisition,” Lurie said. “The utility already has the customer and pays us to engage them.”
A smart thermostat rebate program in Colorado and San Diego Gas & Electric will be the first utilities to use Marketplace, exposing the e-commerce site to 2.5 million households in the Midwest and West Coast. Lurie said other utilities are lining up to pay the annual license fee, which varies based on which configuration the utility selects.
Simple Energy will make money from each transaction on Marketplace, too. They will serve as the sole retailer for transactions made directly on Marketplace, and Simple Energy will receive a commission on transactions that are completed through a partner site. Amazon and Best Buy are the two retail partners ready for the launch.
A glimpse at the future of utilities
To start, Marketplace will feature only appliances, but Lurie said it will soon offer services, such as upgrades or the cleansing of an HVAC air filter.
He said he is interested, as many are, about the future of utilities. The worldwide energy efficiency industry is worth at least $310 billion, according to the International Energy Agency’s “Energy Efficiency Market Report 2014”. The industry is constantly changing, with new forms of energy — such as solar — growing in popularity, not to mention companies like Google and Nest entering the picture.
The future of utilities is in question, Lurie said, and he hopes Marketplace — with its product profiles, utility branding, usage data and rebate system — will give the industry some crucial insight.
“We’re really excited about offering the opportunity to see what a certain view of that future — one where [utilities are] actually able to monetize better relationships with their own customers — would look like,” Lurie said.
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