Powershop founder Ari Sargent spent years attending boring corporate meetings within the electricity industry before he decided there had to be a better way to sell it.
“It just seemed like madness to me. There was always angst about retail pricing and discussions about how complex it was, and I used to think, ‘Sheesh- how hard can it be to read a meter, send a bill and collect some money?’”
Banks were putting their interest rates out on a board, gas stations had the oil prices of the day up in lights, but electricity was still a product you used while completely in the dark about how much it cost (excuse the pun).
Powershop was born out of Sargent’s desire to shake up the industry, and is based on the premise of creating a consumer good out of electricity.
“One of the dumbest things about electricity is you pay for it after you use it and you have no idea how much it’s going to cost you.”
He wants electricity to be purchased more like a tin of baked beans, where you consciously think, “Yep, I wanna buy that amount of that product at that price.”
Powershop allows consumers to go online and pre-purchase electricity at the rate of the day, taking advantages of specials and packages.
About two-thirds of electricity is now bought actively through Powershop – compared to 35 percent when the company first started.
When asked if treating electricity as a consumer good is the way of the future, Sargent doesn’t predict rapid change.
“I think the old model is fundamentally broken, so I’m sure there will be change to that,” he says.
“We’ve developed a way that’s different that certainly some customers love. Whether it’s for everyone, I don’t know, and the rate of change of incumbent retailers globally is quite slow so even if it was the way of the future it’s 10 to 15 years away.”
Powershop recently launched in Victoria, Australia, and Sargent says 2015 will be a year of looking for other opportunities outside New Zealand.
In terms of competition, Sargent says others could easily nick off with their ideas in principle, but he’s not worried.
“In theory you could look at what we’ve done and reverse engineer the web platform but the bit that’s hard to replicate is the brand and the attitude and the philosophy.”
This story was originally published in NZRetail magazine issue 736, March 2015.