We can all agree that 2020 was different from the average year in almost every way possible, and that is no exception when it comes to utility Marketplaces powered by Uplight. The pandemic caused uncertainty and challenges at every turn, but the Uplight team and our utility partners adapted, innovated, and stayed focused on delivering value to energy customers as the year played out. The result? Stellar, above average sales throughout the year and a strong December that delivered 112% of the forecasted sales.
Here are some trends the Marketplace team saw in 2020, and during the Black Friday Cyber Monday shopping season.
Sales stayed strong throughout the year
In most years, Marketplace sales peak during big promotional periods such as Earth Day, Efficiency Day and, most notably, Black Friday Cyber Monday (BFCM). However, forced to spend more time at home, throughout this year utility customers invested in products to make their homes more efficient and comfortable. In addition to meeting increased customer demand, several utilities went one step further by partnering with Uplight and product manufacturers to help customers by giving away free and low cost thermostats alongside pre-enrollment in demand response programs.
The high levels of engagement and sales seen in late Q3 and early Q4 continued into the BFCM period, though demand was more distributed across the sale days and weeks than in past years. Uplight saw a general increase in the number of transactions and ecommerce conversion rate compared to last year, with less slow-down between peak promotional periods.
Smart thermostats remain the leading sellers (with lighting a runner-up!)
During the 2020 holiday season, smart thermostats represented 88% of Marketplace revenue and 56% of all items sold. Energy efficient lighting products made up 32% of all items sold this season, but only resulted in 8% of total sales due to the lower price point of lighting items.
Uplight clients saw impressive performance from LED lighting promotions in particular. For one Cyber Monday campaign, the subject line, Don’t miss $xx bulbs, resulted in a 30.9% open rate and an 8.4% click to open rate across participating senders.
However, the sales mix differed across utility Marketplaces with variability driven primarily by rebate levels for each product category. Smart thermostats generated more sales for utilities with smart thermostat rebates greater than $75, while lighting brought in the majority of the sales for those who offered LED lights at $1 or less per bulb.
Customers still looked for a deal
Uplight piloted a flash sale on a brand new low-priced thermostat from a highly-recognized brand to capitalize on a last-minute opportunity and test discounting a stellar everyday offer. This resulted in an ecommerce conversion rate 12X higher than those for similar campaigns without the limited-time discount.
The pilot sale results demonstrate that during the month of December, customers look for deals and limited-time offers. The sense of urgency of a short-fuse sale coupled with a sale price of just $9.99 on a popular new thermostat generated a lift in engagement and a stickiness that we’ll seek to emulate across more stores in 2021.
Customers love a low price point
The 2020 Marketplace sales mix was influenced heavily by lower-priced smart thermostat offers which appealed to customers who were even more price conscious in a pandemic year. The new Google Nest Thermostat’s price of $129 and the Honeywell Home Wi-Fi Color Touchscreen Programmable Thermostat’s sale price of $99 before rebates captured a lot of buyer attention during the 2020 Black Friday sales.
Increasing rebates also positively impacted sales. Uplight has found that thermostat rebates at $75 and up result in the highest number of purchases and corresponding conversion rates.
Strain on supply chain required agility
Increased demand for products such as air purifiers, smart thermostats, and smart home products resulted in supply constraints and unavailable products. Uplight partnered with utilities to remove out of stock items from Marketplaces and change promotions to account for product shortages until suppliers were able to ramp back up to meet demand. Uplight was able to monitor inventory and pivot quickly with the help of our utility partners–ensuring that all utility customers had an updated, in-stock product selection.
What about 2021?
In the first part of 2021, Uplight expects a similar steady sales state as customers continue to stay at home and make their homes more comfortable and efficient. Utilities should continue to promote smart thermostats and efficient lighting products, and determine the optimal campaign mix for their customers.
There is also a big opportunity to cross-sell smart home products to customers, especially for those who have recently purchased smart thermostats and may be interested in related products such as smart plugs and video doorbells to build out their connected homes.