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Leadership / Digital Transformation

Survival of the fittest: How e-commerce can help define the future of fuel retail

Changing travel habits leave fuel stations at risk of becoming redundant without radical change. Shan Roy, VP at global IT and business consulting services firm CGI, outlines why survival is dependent upon digital transformation.

Do customers actually enjoy filling their car at their fuel station? It is a question that fuel retailers should be asking.  

Personally, when the low fuel warning light is triggered, I am filled with annoyance rather than joy, and therefore put off the visit for as long as possible. I’m certain I’m not alone in this view. 

future of fuel retail
Among changing travel habits and the increased prominence of electric vehicles, fuel stations risk becoming redundant without radical change. (Photo by DestroLove/Shutterstock)

In some markets fuel station visits are already decreasing, partly due to a reduction in car usage during the pandemic but also as we start to move away from hydrocarbon and begin to focus on EV-charging. It is clear that the need to visit fuel stations will dwindle further over the coming years, making them at risk of becoming redundant unless they re-invent themselves to remain relevant to customers’ changing needs. 

The need to transform digitally is imperative so that the fuel retailer can harness the power of e-commerce to create a seamless experience for their customers.  

In the wider world of retail, online commerce is well established and customers’ behaviour has changed. They expect to be able to order from anywhere, choose how they receive their goods and services and pay however they like, all in a frictionless journey.  

A customer-centric future for fuel retail

 If we imagine that we could combine a visit to the fuel station with picking up an online order [for food and drink or items from another retailer], what would be an example of a frictionless customer journey?  Starting from creating an order, paying, picking up the order, using the carwash and filling up while at the fuel station and then redeeming loyalty points gained from the transaction, the customer will expect all of those interactions to be within a single channel. Fuel retailers need to ensure their digital strategy embraces that customer centricity and doesn’t become fragmented, which will only discourage the customer. 

Implementing an e-commerce platform is central to creating a single channel approach and a personal connection with your customers both online and in the store. Through this new channel, the fuel retailer can understand more about a customer’s needs, their buying patterns and unlock the ability for individuals to purchase tailored products and services through targeted marketing, offers and rewards for loyalty. 

This enables fuel retailers to offer personalised discounts that apply across the full product and services portfolio, maximising each customer’s spend across service offerings. 

An e-commerce platform allows greater speed to market to develop new customer offers, giving fuel retailers the ability to test the market with simpler, cheaper and quicker implementations. It gives them the tools to quickly tailor the specific customer offer at each individual site, maximising revenue and delighting customers equally. 

E-commerce was once the harbinger of doom to bricks and mortar retail, but I believe it is pivotal to driving footfall back to fuel stations and generating extra revenue from these visits. The ability to create journeys for customers that start online but move to the fuel station will seem effortless for the customer. With that higher footfall at the site, the fuel retailer has plenty of opportunities to upgrade that sale with higher-margin products and services, using both the e-commerce platform and the site itself to drive those extra sales.

Think along the lines of using e-commerce to sell a subscription to the car wash, a high margin product in itself, but being able to encourage the customer to say, pick up a coffee and a snack to enjoy while the car is being washed. Great experience for the customer and extra revenue for the retailer, everyone wins! 

With all these exciting possibilities, will I enjoy putting fuel in the car? Probably not, but it might change the way I feel about visiting the fuel station with everything else it has to offer. A factor that is key to the survival of fuel retailers. 

It is a time of uncertainty for fuel retailers and they must act now to re-imagine the customer relationship and services to unlock future growth. E-commerce must be a cornerstone of this transformation.