Brands to watch | Marketing & Brand Strategy | Trans Tasman

Bringing the power of choice to Australia


First published in Fairfax NZ Business 6 May 2014.

I’ve just become one of the 10,000 or so Australians who switched electricity providers to Powershop. It’s a brand that’s likely to be familiar to most of you Kiwis, but here in Australia it’s still a very new name in a recently deregulated market.

In yet another example of what seems to be Australia’s love affair with duopolies, Powershop is hoping to entice dissatisfied customers from Origin Energy and Energy Australia (together accounting for over 50 per cent market share in this country) as well as from other retailers such as AGL.

Meridian’s cheeky little brother launched across the Tasman several months ago and is currently available only in Victoria, with the rest of Australia on the horizon.

Historically, Australians’ attitude to their utility company and other big providers such as the banks has been neither here nor there. Despite a reputation as being loud-mouthed and tough-as-nails, Aussies do in fact share New Zealanders “she’ll be right” attitude.

Vocal consumer dissatisfaction in the past, hasn’t necessarily invoked change. It’s part of the reason why so many Australian companies are now paralyzed with fear and inertia, demanding tougher regulations on imports, and taxes on incoming international goods and services.

Serious competition is still a wake up call to this country and many old-school Australian stalwarts do not like it one bit. On the other hand, the Australian people, well they like good a retail fight just fine.

In recent years it has become easier to switch between telcos, banks, insurers, superannuation funds. Australians enjoy being wooed by global brands setting up shop and educating us on the, sometimes ruthless, nature of true competition. Electricity joins the fray.

It’s a meaty space to break into and Powershop launching here makes perfect sense. Australia’s electricity-retail sector is worth AU$29.7 billion with $2 billion profit and annual growth of 9.5 per cent – a small piece of that pie, translates into big dollars.

However, it’s still early days for Powershop and the challenge for them is multifold. Firstly, they need to build a brand from scratch in an industry where massive incumbents have operated unopposed for decades. At the same time, they need to educate consumers that switching is easy and choice theirs for the taking.

If research by the Australian Energy Market Commission (AEMC) is anything to go by, there’s a lot of consumer confusion and perceived risk in moving to another electricity provider, especially an unknown one.

Thirdly, Powershop’s positioning and campaign, while successful in New Zealand, is not necessarily the best one to launch with in Australia. Cheeky may work in a mature market where consumers are knowledgeable, like they are in New Zealand. But in Australia something a bit more conservative (I know, I know, boring)  may be needed to convince people to trust Powershop.

There have been some dodgy energy companies knocking on doors and signing people over unwittingly, so Powershop will need to assure Australians that it’s both a disruptor and a respectable brand. Namedropping Meridian for a while wouldn’t hurt.

Meanwhile, I’ll keep mucking about with my Powershop phone app and informing my ever-so-mildly interested family with insights and daily stats on our personal electricity usage. Power to the people!

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