Would you buy electricity in a department store?

Best Buy announced expansion of their partnership with Constellation Energy for selling electricity in the stores.  The expansion adds 12 additional Chicago locations to their current Bucktown location.  The premise here is that consumers can get their electricity supplier when they go into a store. And apparently these customers are flocking in.

We know for sure that the power is not in the hands of the customer (no pun intended). Something else we know is that price is no longer the only dimension through which customers make their decision. Customers now consider which electricity supplier they choose along the lines of

-       The length of the contract. We have 3,6,12, 24 month contracts

-       What additional incentives exist? Things like giftcards, discount vouchers etc.

-       Does my power contain renewable energy?

-       How much renewable energy?

-       Are there early termination fees?

-       What customer service hours does the supplier provide?


So how would you shop along these dimensions if you were buying electricity on a store shelf? How do you compare different brands or types of cereal on the shelf? There is more of recognition of the differences in brands (Kelloggs vs Post) or type of cereal (‘Honey Wheat’ vs ‘Raisin Bran’) but these dimensions of differentiation do not exist in the electricity supplier comparison process.

What we are learning is that people seem to be more willing to shop for electricity online. It’s the service we provide and that people love. But we work with several suppliers and provide options, so a corollary to Power2Switch as a store would be a cupcake shop that sells cupcakes from different cupcake manufacturers, with the suppliers being the manufacturers.

An interesting fact is that these alternative dimensions that factor into how customers make choices or are matched with the options they have, where there is no price, is the crux of the research done by the recent winners of the Nobel Prize in Economic Science. The outcome of the research has been applied to matching doctors to hospitals and students to schools.

Imagine a world where it is applied to electricity suppliers? A world where customers get to pick or be matched to an electricity supplier not because they have the highest or lowest rate but because the supplier has made conscious efforts to build it’s customer service brand. Or the supplier has chosen to generate electricity from green sources. Or the supplier has a store that is as pleasurable as the apple Store.

We can only dream of those days. But until then, we would like to know ‘would you buy electricity from a department store?’

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