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July 31, 2017
Reimagining the fuels retailing experience
By: Brian D Gray

Planning for the new starts now

Fuels retailing in North America, which has seen little innovation since pay-at-the-pump was introduced in the 1980s, is on the verge of major change. The big question is not if, but when and how fast the disruptions will occur.

Relatively low gas prices, along with continuing traffic congestion, might lead one to believe demand for gasoline will not slide rapidly. Hundreds of millions of Americans rely on cars, which are status symbols to get to work, shop for groceries, and to visit friends and family members.

But consider how innovators have upended the taxi business, books retailing and movie rentals. Car-sharing services and the development of autonomous vehicles could have a major impact. Among urban eco-conscious millennials, vehicle ownership can seem complex and expensive (e.g., parking, insurance, licensing fees).

Another potential disruptor: connected cars and smartphone apps enabling office and home-based workers to have vehicles refueled by mobile distributors, thereby avoiding in-person visits to fuel stations.

Assuming miles-per-gallon gains in fuel efficiency and declining demand for petroleum, fuels retailers are likely to experience major change—and potential financial pain—in the next 10 years.

 

Envision a new customer experience

Vehicle innovation is broadening the array of energy to be sold besides gas and diesel. If electric cars become commonplace, the vast majority of recharging is likely to occur at home. But this scenario could also create opportunities for 20-30 minute shopping experiences for those deciding to visit fuels retailing sites for recharging, for other energy supplies and for food shopping.

Re-imaging the customer experience requires knowing more of what customers might like, rather than expecting them to continue arriving after dashboard alerts of near-empty fuel tanks.

Fuels retailing needs to move from a distress purchase to something much more: ideally, a delightful experience. If drones eventually can deliver snacks and supplies to homes in a matter of minutes, retailers will need to re-envision what they stock on shelves to lure consumers out of their homes.

To advance in this direction, fuels retailers and their suppliers need more data and analytics for a deeper understanding of customers in a fast-changing market environment. Customers with instant access to information are knowledgeable and less captive, using smartphones to find the best prices for fuel and food, and the most convenient locations.

Fuels retailers need to start the process of embracing the new by first understanding consumer and industry trends, then reimagining the customer experience, and mapping a journey to build new capabilities.

Waiting is not a safe option because change may happen much faster than expected. To avoid extinction if bolder competitors disrupt the market, fuels retailers need to keep one foot in the present and the other in tomorrow. That means the planning starts today.

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