PowerPoint-Prsentation

Who will own the Smart Home?Dr. Holger Schmidt FOCUS Magazine Netzoekonom.de1

Is There a Demand for Digital Smart Home/ Energy Saving products? 2

Importance of Home Energy ServicesHow important are services allowing you to manage selected energy settings in your house, e.g. change heating/AC levels via smartphone/tablet at home or when you are away. (Answers in percent, 1504 respondents)Source: Accenture Spring 2014 3

What Customers expect from Energy Provider?Along with a smart meter, PercentSource: Accenture, Survey4

Willingness to Pay for Home Energy ServicesRespondents who consider Home Energy Services as important or very important. 562 Respondents, Euro per MonthSource: Accenture Spring 2014 5

6The Techs Are Entering the Smart Home Market

The Heat is on for Hardware

Category killer in software markets are invincible.

VCs think: Internet of Things is the next big thing.

Nest acquisition by Google was the starting point

Its easier for tech companies to enter marktes with non-innovative incumbents as to compete against other tech firms. Much venture capital is flowing into finance und energy.

Smartphones penetration is high. The infrastructure to control hardware is available.7

Google: Money for Landgrabbing are Earnings 2001 2003 2005 2007 2009 2011 2013Net Income and Strategic Acquisitions/InvestmentsSource: Google

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How Tech Firms intend to disrupt traditional sectorsSoftware-InnovationConvenienceSaving MoneySave Time19942010Better Products to give customers:ConvenienceMore MoneyMore TimeBetter DesignHardware-Innovation** Apple started 2001. +9

Saving Money, Convenience, More TimeSoftware related disruptionsCustomerFaster Loans, Easy Access (Choices, Time) Convenience, Saving TimeSaving Money (Free SMS), More OptionsTime Saving, ConvenienceConvenience, Saving Money, Saving TimeTravelBanksTelcosTaxiCommerceEducation10

Convenience (More Functions)Hardware related disruptionsCustomerDesign, Convenience, More ChoiceSave Money, More Comfort, DesignSaving TimeConvenience (More Functions)Save Money, Save TimeWatchesMusicCarsClothingLogisticsSmart Home- Energy11

Who is Coming?

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Smart Home Wild West

Nest is comingSource: The Verge The UK launch is only the start and the company will continue to aggressively expand throughout Europe.Matt Rogers, Nest Co-founder

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Nest-Approach in UKCooperation with RWE npower

Offer: A bundle of a Nest Thermostat and a long-term electricity contract

Good opportunity for npower to differentiate from large competitors like British Gas

Risk for npower: Become a replaceable provider as soon asNest is a household name.

dump pipe doom15

Apple is coming

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Apple HomeKit

Good NightSmart Home Devices

Energy-Supplier17

Tado is already there

>1000 Installations per month18 month on the marketRaising fresh money right now

Strategy:Nice ProductRegular digital customer contact

In a few years, customers will have forgotten the name of their energy supplier

Christian Deilmann, CEO Tado18

Tado Cooling (Kickstarter Project)Source: Kickstarter

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Neurio (Kickstarter Project)

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Is the Energy Industry prepared? 21

Unique Users of Energy Websites GermanyThousandsQuelle: Comscore

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Users of Energy Websites in EuropeSource: Comscore

Unique Visitors (Millions), April 201423

Downloads of Energy /Smart Home AppsSource: Priori DataAll-Time Downloads, selected AppsVery high Marketing Expenditures24

Monthly Active Users of Energy /Smart Home AppsSource: Priori DataApril 9 May 9 2014, selected Apps25

Strategies for Energy Incumbents?26

Preferred Provider of Home Energy ServicesRespondents who consider Home Energy Services as important or very important. 562 Respondents in Germany, Percent, Source: Accenture Spring 2014 27

Preferred Provider of Home Energy ServicesRespondents who consider Home Energy Services as important or very important. 562 Respondents in Germany, Percent, Age groupsSource: Accenture Spring 2014 28

Digital To Do List:29

Build Products for the Digital Age30

Design matters

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Build Customer Relationships for the Digital Age32

Digital To Dos:Content-Marketingto boost traffic and to improve your reputation(Look at NewsCred)Learn about customers behaviour to offer good tailor-made products(Look at Opower)Listen to your customers. Learn. Interact.But: Social Media is a tool for communication and relationship management, not for sales. 33

Examples to boost customer loyalty by buildung regular digital relationships

Submit gas and electricity meter readingsShow bills and account detailsBook an appointment with an engineerProvide customers with advice on consumptionProvide customers with targeted offers. (Give them a better tariff)Incentivising customers to reduce consumption in high demand periodsGamification for energy saving. Be the energy provider for the smartphone generationPossibility to share billsOffer relocation services34

Organize Your Companies for the digital Age35

Organisational Structure

Source: Alex Pentland SociaL PhysicsPersonal Face-to-Face CommunicationElectronic Communication (E-Mail, Chat...)Problem36

Organisational StructureSource: Alex Pentland SociaL Physics

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Team StructureSource: Alex Pentland SociaL Physics

Asymmetric Communication PatternsSymmetric Communication PatternsUnproductive TeamProductive Team38

Questions?

39Contact:

Dr. Holger Schmidths@netzoekonom.deTwitter.com/HolgerSchmidtwww.netzoekonom.de