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The water market is open. We were all ready on time. CMOS the system is working. The market is operating well now because customers are switching. Surely that means the hard bit has been done? Or not? Before we all breathe a collective sigh of relief, let’s take a quick look at other markets to get a glimpse of what my lay in store for retailers in this market.

CGI has recently sponsored a survey, covering over 200 retailers in European energy markets, that suggests that there are major challenges ahead. A couple of key conclusions from that report: “almost three quarters of European utilities (73%) see new customer acquisition as a major challenge”, and that “retailers are under unprecedented pressure to rethink their business models against a backdrop of rising customer churn, increasing competition and massive technological disruption”. It also suggests that the established players are under threat. New entrants present a challenge to the incumbents and are starting to gain market share.

Faced with these challenges, the report highlights three major success strategies:

  • The quality of customer service is seen by utilities as the main battleground for winning or losing new customers. Technology will play a major role in overhauling and modernizing processes, with the majority of retailers planning to invest in areas such as customer engagement management platforms, social media communication and robotics.
  • New products and services. But what are the new products and services that water customers would value? Is there a need to diversify into areas outside the traditional water domain? As the report highlights, many energy utilities are looking to go “beyond the meter”.
  • Low cost operations. Based on traditional operating models profit margins in the water market will be low. To increase margins retailers are increasingly looking to digital transformation. 76% of the water retailers “plan investment in non-human voice interfaces/chat-bots in the next 12 months”. Yet only 36% of water retailers see themselves as digital innovators.

Of course, this is more about the more mature energy markets, but it does give us some timely guidance for the new UK water retailers as they embark on their journey in the newly competitive water market. To thrive in this market, technology will be key to future success, both in terms of enhancing the customer experience and in driving efficiency.

So if you are a water retailer, it is worth a read of this report to find out more about the challenges and about the strategies that might work in the water market. Digital Utilities: From Behind the Curve to Innovation – was commissioned by CGI and published by PAC – CXP Group. It is available to download from our website:

About this author

Graham Hainsworth

Graham Hainsworth

Director Consulting Water Sector

Graham has over 20 years’ experience working in the utilities sector, helping utilities companies respond to their market challenges and drive more value from their asset base. He is an expert in optimising business processes and designing innovative and transformational solutions and has worked with ...

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