Millennials now represent almost a quarter of the world’s population and the oldest among them are in their mid-to-late 30s. In previous generations, that meant entering the property ladder and its DIY ecosystem but Millennials have a less clear-cut relationship with the home. While it could spell trouble for the Utility sector, a little creative thinking should help providers reap the rewards of the largest consumer group for years to come.
Each generation is shaped by the major events that marked history during their young adult years and the millennial generation is no different. It “has grown up during a period of rapid change, characterised by globalisation, the digital revolution and the great economic crisis of 2008,” says Spanish economist Roser Ferrer. As a result, they have “a set of preferences, attitudes and expectations that differ from those of previous generations.”
Millennials are digitally-minded, demanding and wary consumers. They like straight talking and fact-based marketing, and are more likely to read reviews before making purchase decisions. This outlook on life has a significant impact on the Utility sector.
Here are five facts Utilities should consider when catering to Millennials:
- They have a different relationship than older generations with home ownership
- They’re more likely to use online resources to make decisions related to the home
- They’re more likely to recommend their Utility
- They prefer to “support companies that align with their values”
- They’re “ditching DIY” for a new “do it for me” attitude
So, how can Utilities turn these particularities of the millennial generation into golden opportunities?
The first step on the property ladder is high
Millennials are more hesitant when it comes to investing, explains Ferrer, which is hardly surprising considering they lived through the 2008 financial crisis. They also face many obstacles on their way to purchasing a home.
This has important consequences for the home market, and by extension the Utility sector, with less than half saying they want to own a home according to the 2019 Deloitte Global Millennial Survey. In the US for example, home ownership among Millennials in 2018 was about 9% lower than previous generations.
Perhaps even more significantly, almost two thirds of those who did purchase a home say they regret it compared to 35% of Baby Boomers and 50% of Gen Xers. Their main complaint, says senior money writer Megan Leonhardt, has to do with the fact they had underestimated the costs associated with owning a home.
This is coupled with an aversion to and, let’s face it… a difficulty with DIY. A ‘Home Truths’ survey conducted by HomeServe in the UK in May 2019, shows Millennials don’t see eye-to-eye with older generations when it comes to fixing, maintaining and improving the home. According to another survey, this one by faucet company Moen, 60% of Millennials admit having problems “with basic DIY tasks, like fixing leaks and even changing lightbulbs.”
Turning an obstacle into opportunity
While Millennials’ reluctance to “get their hands dirty” could be seen as a problem, it actually presents a great opportunity for the utility sector. If a millennial homeowner doesn’t have the time, interest or skills to maintain or upgrade their home, why not offer them services to fill that gap?
Home assistance cover for example, is well received amongst Millennials with 57% saying they’d be ready to sign up according to a 2017 HomeServe survey of 18,000 homeowners in 18 markets around the world. This is especially true in Australia, the Netherlands, Japan, and Germany where under 35s are significantly more likely to buy home assistance cover than older generations.
A programme like the TotalHome Warranty, recently launched by HomeServe in the US, is the type of creative thinking that endears customers like Millennials. Knowing they can outsource emergency repairs and that they’re covered in the event of an unexpected breakdown gives them peace of mind, and allows them to save time and money, with not a hint of DIY in sight.
Meeting Millennials in the digital world
In a world where core utility offerings are now practically indistinguishable from one another, the battle for consumers’ hearts and wallets happens elsewhere. Millennials travel the digital environment with ease and are able to “access information, compare products and services, buy and communicate from anywhere and at any time,” Ferrer explains. This means Utilities can’t hide.
This is especially true since one aspect that defines the millennial generation is their reliance on the opinions of others. A study by boiler company BOXT in the UK reveals eight out of 10 Millennials “never buy anything without first reading a review” while almost half of respondents read six reviews on average before making a purchase.
Hitting the mark
Luckily for Utilities, when they hit the mark, it seems Millennials globally are more than happy to support them, according to the 2017 HomeServe survey. While the results vary by country, under-35s in Australia, Japan, Mexico and The Netherlands for example are more likely to recommend their utility provider than older generations.
Question is… how can they hit the mark?
Matching offerings to millennial preferences
The millennial connection with the online world makes them savvy consumers but it also has an impact on how they expect their homes to function. A study found a majority of Millennials (63%) are looking for a home that is “customized to their tastes and needs.” Three quarters see smart technology as a way to achieve this goal because it “makes their homes more energy efficient (70%), and saves them time (67%).”
The need for customization however, goes against Millennials’ distaste for DIY so how can Utilities help? The “future is in services,” says Centrica’s former chief executive Iain Conn, “whether that is fixing boilers or supplying smart thermostats that can be controlled remotely via an app.” If providers are going to offer services targeting Millennials, they need to make them turn-key whenever possible.
IKEA could be seen as the antithesis of what Millennials want. All that assembly… But the Swedish giant never misses a beat and is partnering with TaskRabbit, an online platform that matches people with installers and other handy-people for a flat fee. Utilities could take a page from IKEA’s book and offer an in-house or partner installation service if they want to get Millennials’ attention.
Boosting eco-friendly features
Millennials also want eco-friendly homes, that are as self-sufficient as possible. Utilities have an important role to play in this equation if they want to be relevant in their millennial customers’ lives.
Proposing and installing technologies like smart meters, smart thermostats or smart leak detectors is one way to help Millennials ensure their home is more efficient and simple to run. It’s also a great way to help them save money. A device like tado for example, could save consumers up to 31% in heating costs according to HomeServe.
Leakbot, another smart device, gives homeowners peace of mind and saves precious water for providers as it detects hidden leaks. It’s a win-win situation for everyone involved. Utilities boost their eco credentials, which endears them to Millennials, by offering solutions that reduce the consumption of resources and customers get the turn-key, worry-free homes they want.
Streamlining for the win
But simply offering smart devices is not sufficient. As millennial Shane Costello explains, “their bright promise fades a bit for me since most of these “smart” devices come with their own app, many of which proudly state that they’re programmable by the user.” This is the equivalent of saying “extra setup time required,” he adds, which is the kiss of death for a company catering to Millennials.
While he’s not addressing Utilities specifically, Costello’s argument applies. Streamlining and automating systems for the home is key when speaking to Millennials. Gas, electricity and water feed the central nervous system of the home and they’re being increasingly called upon to interact with smart devices. Utilities must find ways to streamline their offerings and learn to play nicely with others.
Making the most of Millennials’ relationship with the home
Millennials have to overcome many obstacles these days before they can buy a home. Once they get there, they’re confronted with the high financial and time investment required for upkeep and their dislike of DIY. At the same time, this generation views the world through a digital prism and is willing to recommend those who meet their expectations.
These particularities of the millennial generation present challenges for Utilities but also great opportunities for those willing to think outside the box. Here are five things Utilities should keep in mind when designing products/services for Millennials:
- Embrace technology and mobile solutions for easy access to information and interaction either through in-house development or partnership
- Ensure access to your brand is available across a range of channels, including social media
- Focus on matter-of-fact messaging clearly outlining the benefits you bring and what sets you apart
- Demonstrate your commitment to the environment and community
- Show customers that they are valued with rewards for loyalty
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