Simple Steps Workshop Appliances

January 22nd, 2015

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Retail Appliance Program Development

• Hosting two workshops on appliances

• Last Thursday, 1/22

• Today, 1/27

• Follow up – ranking tool

• Compile feedback

• Share retail appliance plan in February

• Monthly program management meetings

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Why Appliances, Why Now?

• Utilities requested appliance options

• Opportunities to benefit consumers

• Low rebates not meaningful to consumers

• Proof of concept on a new program model

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Program Overview

• 2015 Program Timing• Development Jan – May 2015

• Launch – June 1, 2015

• Includes clothes washers, refrigerators and freezers

• Similar to lighting & showerhead promotions

• No rebate forms

• Utilize RSAT for allocations

• Monthly invoices/reports

• Field services

• Opt in and priced separately

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Types of Retail Implementation

Utility Funding

Upstreammanufacturers

Midstreamretailers

Downstreamdirect to customer

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Retail Implementation Options

Option #3

Midstream Retail

Incentives

Option #2

Upstream Manufacturer

Incentives

Option #1

DirectMarkdowns

Option #4

Digital Reward

Redemptions

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Option 1: Direct Markdowns (at purchase)

Benefits

• Familiar to retailers, manufacturers, utilities and consumers

• Instant consumer markdown

Barriers

• Low impact on end-price for consumer

• Less valuable to retailers and manufacturers

• Difficult to execute consistently at retail

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Option 1: Direct Markdowns

Mechanics

• Funds applied to product markdowns only

• Dependent on proper execution of product markdowns

• In-store utility-branded collateral

• Incentive $ paid to retail and/or manufacturer partners

• Sales data required

• Not all major retailers are able to support this

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Option 2: Upstream Manufacturer Incentives

Benefits

• Utility visibility to consumers

• Opportunity to leverage national/regional promotions

• Flexibility to use $ for markdowns and/or marketing

• Comfortable for manufacturers

• Scalable to participating territories

Barriers

• Markdowns may not be obvious to consumer

• Funding divided across several manufacturers

• Limited by retailer stocking decisions

• Limits accessibility to retailer

• Utility discomfort with how funds are used

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Option 2: Upstream Manufacturer Incentives

Mechanics

• Incentives $ paid to manufacturer

• Funds applied to manufacturer’s product only

• Limited-duration promotions

• In-store utility-branded collateral

• Sales data required

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Option 3: Midstream Retail Incentives

Benefits

• Highest probability for success, most cost effective

• Utility visibility to consumers

• Promotional alignment across products and brands

• Opportunity to leverage national/regional promotions

• Flexibility to use $ for markdowns and/or marketing

• Helps influence stocking practices

• Scalable to participating territories

Barriers

• Coordinating with existing utility programs

• Utility discomfort with how funds are used

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Option 3: Midstream Retail Incentives

Mechanics

• Incentives directly to retail partners

• Cooperative advertising with manufacturer

• Limited-duration promotions

• In-store utility-branded collateral

• Sales data required

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Field Services

• Utility representation in store

• Assists product sales

• Promotes special offerings

• Sales associate training

• Coordinates large multi-store competitions

Sharing Store Allocations

Utility A (supporting retail promotion)

70% Allocation

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Utility B (supporting mail in rebate)

30% Allocation

Sales

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Option 4: Digital Rewards

Benefits

• Available where there are limited retailers

• Online purchases

• Utility branding opportunities

• Customer data

Barriers

• Doesn’t capture all sales

• Customer must complete online redemption

• Low incentive levels

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Option 4: Digital Rewards

Mechanics

• Post-purchase online format

• Customer submits purchase information

• Approval required

• Pre-paid Visa card sent to customer

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Recommendations#1: Direct Product Markdowns

#2: Upstream Manufacturer Incentive

#3: Midstream Retail Incentive

#4: Digital Reward Redemptions

In-store POP X X X

Easy for customer X X X

Turnkey for utility X X X

Sales Data Required X X X X

Captures all sales X X X

Online Accessible X X

Customer reward X X X X

Marketing support X X X

Product diversity X X

Event engagement X X

Associate education X X

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Retail Implementation Options

Option #3

Midstream Retail

Incentives

Option #2

Upstream Manufacturer

Incentives

Option #1

DirectMarkdowns

Option #4

Digital Reward

Redemptions

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Interested Utilities (as of 1/20/15)

• Benton County PUD No. 1

• Chelan County PUD No. 1

• Clallam County PUD

• Clark PUD

• Cowlitz County PUD

• Idaho Power Co.

• Franklin PUD

• Mason County PUD No. 3

• City of Port Angeles

• Springfield Utility Board

• City of Centralia

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Discussion and Feedback

• What options do you like?

• What else do you want the promotion to support?

Submit your feedback

• Ranking tool will be sent to utilities immediately following the workshop

• Compile feedback

• Share implementation plan late February

Contacts

Ryan Crews

Associate Manager

503.688.1569

ryan.crews@clearesult.com

Heather Gates

Senior Program Associate

503.688.1589

heather.gates@clearesult.com

Dave Murphy

Program Manager

503.230.3542

Demurphy@bpa.gov