Sprosty is known for its expertise at the intersection of retail and technology, and we’ve helped some of the biggest retail brands in the industry launch successful new technology initiatives. Our specialty is helping companies in and out of retail find growth opportunities that others can’t see. Not surprisingly, the retail opportunity is a huge blind spot for many non-retailers. Not only do many companies not understand their potential role in retail, but many fail to do the most basic step to determine what their customers expect of them. How will you know if your existing customers will give you the right to sell directly to them wth products and services that solve their pain points? ASK THEM!
Sounds simple, right? It should be, especially when you’re looking at adjacent markets. Yet many companies ignore these obvious opportunities and instead try to find ways to generate new revenue doing more of what they’re already doing using their same old business model.
We called out utilities as an example of the types of companies that would be a natural fit for retail in a recent column for CIO. They are the type of company that should—and needs to—break out of their current mold. The federal government has mandated that they produce less product (energy), yet at the same time, shareholders expect them to produce more profit and revenue. They have no other choice than to look outside their comfort zones and find new ways to generate revenue.
So, some are starting to ask their customers about whether they will give the utility the right to be in retail and enter into a more direct “channel” relationship with them. They are researching their customers’ pain points and identifying what products and services their customers want or need them to offer beyond their traditional offerings.
As they do this, they may fall into the traditional corporate philosophy of pass/fail: “we tried this and it failed, so kill it” and “we tried this and it worked, so scale it.” But in retail, there is no immediate pass/fail. There’s experimentation. There’s iteration with live customer experiences including pop-up stores. There’s social media testing and dialog creation to see customer response. Throughout the experimentation process, offers can be turned on and off, and modified on the fly.
Many utilities are finding a natural starting point as simple as a lightbulb program, where they offer a product every single one of their customers is already buying somewhere else. One of our utility clients tested this simple concept and sold 250,000 lightbulbs in a single day. Did their customers give them the right to be in retail? The response was an emphatic yes.
This utility is now examining its next retail move by taking a hard look at the customer pain points they could address. Is it energy efficiency programs? Home security solutions? Smart home solutions? Why not start by asking the customer?