With demand for traditional fuel expected to plateau around 2030, fuel retailers are urgently innovating to replace shrinking revenues and dwindling profits.
The leaders have quickly moved to improve and expand their traditional products and services and launch in new, but related, market segments. They recognise that the future business of fuel will be less vehicle-centric and more focussed on the customer. They’ve developed a customer-centric mindset and are building new skills and capabilities to compete with unfamiliar competitors.
We’ve seen some impressive transformations. The retailers making the first move are creating differentiated experiences for competitive advantage and forming strong customer relationships that are driving up conversions and profits.
It’s an immense undertaking.
While fuel retail has always been challenging – very fast service is non-negotiable, transaction volumes are high and operations typically run 24x7 – this requires a fundamental transformation of the standard business model.
And customer expectations have never been higher. Today’s consumers expect brands to deliver fast and frictionless experiences through compelling interactions across all physical and digital touchpoints. Building customer loyalty requires a complex mix of emotional and rational factors that enable you to connect and build relationships with customers across all your channels and communications.
So where should you focus?
Here are the three actions you can take now:
1. Enhance the purchasing experience
Create a seamless experience across the end-to-end ordering and purchase journey, with personalised offers and incentives to encourage store visits, and fast point of sale transactions on the forecourt and in stores.
A mobile app will let your customers pay for fuel without leaving their vehicles. Don’t restrict it to payments - use the app to help customers find their nearest service station, view their purchase history, accumulated loyalty points, discounts and rewards, pre-order coffee, convenience items or a carwash.
Some retailers are making payments fully contactless with license plate recognition systems where customers essentially pay for fuel with their number plate.
By identifying customer pain-points and aggressively embracing innovation, our client Z Energy has delivered a world-first in fuel retail with the launch of its virtual fuel tank - Sharetank.
2. Transform the convenience store
The convenience store format is ready for change. Consumers are cutting back on big weekly supermarket shopping trips and choosing to purchase more of their groceries at easily accessible local stores.
Become a neighbourhood hub by expanding beyond traditional c-store offerings into high-quality products and fresh food, and design places customers want to visit, rather than need to visit.
Increase sales and create new profit streams by giving your customers a variety of delivery models, such as click-and-collect and home delivery.
In highway locations, encourage customers to stay as long as they want, with in-store and takeaway food, and rest areas for travellers.
Consider the un-manned store model, which reduces costs while offering customers a quick, digital experience.
3. Personalise customer offers and experiences
Historically, fuel loyalty programmes were ‘earn and burn’ type rewards that provided discounts for future spend and effectively gave away customer data and relationships to third party loyalty and payments providers or consumer brands.
You have a fantastic opportunity to reclaim ownership of your customer data from a variety of channels and touchpoints – ranging from fuel selections to coffee preferences and grocery purchases within stores.
Analyse these customer preferences and develop personalised communications, experiences and offers that go beyond the novel to become meaningful.
Use AI tools to include personalised recommendations in e-receipts and during click-and-collect pick-ups.
By anticipating your customers’ needs and showing that you know and understand them, you’ll drive up conversions, increase revenues and boost loyalty.
