Are you looking at how to transform your fuel & convenience retail business into a preferred destination for electric vehicle (EV) charging?
Fuel retailers launched their energy transition strategies following predictions of a rapid expansion in EV adoption, with estimates that EVs could make up 30% of all vehicles on the road globally by 2030.
They recognised that while EV charging was a significant threat to their core business by reducing fuel sales, it was also a massive opportunity to add a new, stable revenue stream.
By building on their existing infrastructure in prime locations, access to capital and customer knowledge, they could diversify income streams and future-proof their business.
It’s an essential element for growth by keeping a strong stream of customers at fuel forecourts and convenience stores. With customers spending more time at sites charging their cars, the extended dwell time provides opportunities to increase revenue.
It’s also critical for achieving their goals of net zero emissions and meeting regulatory commitments.
Today, the majority (70%) of fuel retailers are either already offering or planning to offer EV services, and retailers not investing in this area may miss out on capturing a share of this growing market.
However, as car manufacturers worldwide grapple with slower than expected sales of EVs amid intensifying price wars, fuel retailers have been forced to revise how they execute their EV strategies.
While most have not changed their EV ambitions, they are now executing their goals with more precision by focussing on the key opportunities for growth.
They also recognise that the move to EV charging is a major business disruption and risk:
Fuel retailers face formidable competition from other entrants, including OEMs, power companies and pure-play charge point operators (CPOs).
Any large-scale investment in EV charging points must not only earn back the capital expenditures invested, but also operate profitably.
With the large electricity demands from fast chargers and extremely high power prices, many EV charging businesses still operate at a loss.
Despite these hurdles, the future is clear. Without significant changes to their business models, at least a quarter of service stations worldwide are at risk of closure by 2035.
So what are the key factors for success?
To become a preferred destination for EV charging, retailers are exploring three areas:
Offer on-the-go charging
While EV drivers can charge at home or at work, these charging stations are likely to be slow, low voltage points. On-the-go stations use higher power, DC charging points that let EVs fully charge their batteries in under an hour.
With their existing infrastructure in prime locations and established fuel retail operations, fuel retailers can fill in a gap in the EV charging infrastructure and capture a convenience premium.
As more people transition to EVs and not all have access to home charging facilities, there’s a growing dependence on public charging infrastructure. For example, in the UK about 36% of EV drivers regularly charge their vehicles at service stations.
However, it will require significant investments to develop an attractive, competitive and profitable EV offering. With recharging taking far longer than refuelling, operators need to adjust their station formats to provide expanded services and facilities. And ideal EV charging locations won’t necessarily correspond with the best fuel locations.
Capture commercial fleets
EV charging for large business-to-business fleets is a growing opportunity as governments and businesses move to decarbonise their vehicles. Electric vehicles are already being deployed en masse in short-haul transport, last-mile logistics and commercial business fleets.
While likely to become highly competitive, fuel retailers can secure first-mover advantage with an end-to-end offer, combining “on-the-go” and “at-depot” charging.
Create a compelling CX
Innovative fuel retailers are investing early to learn about customer needs and experiment with new propositions and formats.
They’re creating a compelling mix of convenience, speed, reliability and affordability:
Mobile apps will cement customer loyalty and increase return visits
Reliability is a focus - drivers with a low battery charge will prioritise sites where chargers consistently work properly
Clean and safe locations, with expanded seating and decent restrooms will increase dwell time
Reservation systems will remove the frustration of waiting for a charger
Barista-made coffee, fresh food options and other premium services (such as high-end car washes) will provide customers with more reasons to visit and generate additional revenue
Cluster- or even site-specific offers tailored for local buying opportunities will increase sell-through without compromising margin
Customised product bundles, pricing and promotions based on customer transaction histories will attract and retain loyal customers
This blog was originally published on 28 March 2023 and updated 6 June 2024.
Want help to differentiate your EV charging offering?
If you’re looking for help to innovate to serve customers, not vehicles, get in touch. We’d love to help you develop the distinctive and frictionless c-store experiences consumers now expect.
