Rethinking the future of fuel retail strategy – Fuel retailers are facing a new era of opportunity that is also fraught with challenges. Digital, EVs and alternative fuels, new mobility models—there’s a lot going on in the world of mobility. And it’s not just changing your customer base: it’s changing the way they think about how they want to move around.
But what if there was something you could do right now to get ahead of this change?
When it comes to staying resilient, fuel retailers can’t afford to lose sight of the opportunity that retail provides.
The last few years have seen a lot of change in the fuel retail industry. Digital, EV and other alternative fuels, the rise of advanced mobility modes, and rapidly changing customer habits have created huge challenges for the traditional fuel retail business. COVID-19 hammered fuel volumes even further. Yet the explosion the pandemic sparked in e-commerce highlighted a promising opportunity: operators that had a robust retail business saw that in-store sales and online offers helped offset declines in gasoline and diesel sales volumes.
Retail is not just about selling gas; it’s about staying ahead of your competition by providing customers with a complete experience that keeps them coming back for more.
Fuel retailers need to stop selling more of the same and start selling more to the same (and to the new). And although the pressures today remain as urgent as they were a few years ago, fuel retailers now have more options than ever before! No single strategy will be enough to overcome the forces of disruption. For fuel retailers, the key to staking out a profitable future is to adopt a customer-centric model.
This entails taking action in four areas: rethinking their future network, reimagining the station as a mobility and convenience hub, revamping their loyalty and personalization programs, and driving new growth areas beyond the service station. Some fuel retailers are upping their game with:
- Fueling up with services—including e-commerce and digital marketing—to drive growth in the retail channel
- Building out a retail network that includes gas stations, convenience stores, car washes, and related offerings
- Expanding into adjacent markets such as food service and travel centres
Fuel retailers can implement strategies that include:
Modernizing the pump: Pumping up your fuel offerings is the best way to stay ahead of the curve.
Alternative fuels and EV charging stations are becoming more common, but many companies are still stuck in the past and not offering these services.
If you want to stay competitive in today’s market and attract customers who are looking for more environmentally friendly options, it’s time to modernize your pumps with alternative fuels and EV charging stations. Don’t get left behind: modernize your pump offerings.
Transforming the C-Store
In the past, C-stores were seen as a place to grab a quick bite or a cigarette. But now, thanks to new trends and changing consumer demographics, C-stores need to be rethought. Sustainability will increasingly drive the buying decisions of generations X, Y, and Z. Where purchasing used to be in-person only, consumers increasingly order online. Where loyalty once sprang from a relationship with the service station owner, personalization (or rather, hyper-personalization) in the future will be AI-driven.
But simply acquiring or converting sites in itself isn’t enough. To grow their C-store revenues, retailers need to create a compelling and consistent brand experience.
DID YOU KNOW? Thailand’s PTT OR (Oil Retail) is one such example. In March 2021, the company partnered with Line Man Kitchen, a food delivery start-up, to fulfill its ambition of “retailing beyond fuel.” Line Man serves multiple restaurants from a single location and offers delivery and pickup options. Beyond fuel customers, this service attracts a new customer segment: those looking for takeout or food delivery to home or office.
Becoming a Services and Logistics Hub
Basically, this means making the most of your real estate by leveraging it for other businesses that need low-cost spaces and proximity to transportation or customer hubs. You might lease it out to others or build these new businesses yourself—the possibilities are endless! For example, you could have dark stores or kitchens, last-mile logistics hubs (sorting, delivery, and transfer points) and lockers for customer pickup.
But there’s no limit to what kinds of offerings might be attractive to commuters, truckers, or long-distance travellers while charging their EV or taking a travel break—even salon services!
DID YOU KNOW? Petronas, Malaysia’s state-owned oil and gas company, is now reaping advantage from its extensive network with its wholly owned subsidiary, Setel Express. Founded in 2020, the company serves B2B customers—retailers and merchants offering parcel delivery to their customers. It provides pickup and door-to-door delivery as well as services at its hubs, located in Petronas service stations.
The fuel retailing industry is facing a new reality.
In the next few years, the market is expected to become more competitive and pressured. Customers are expected to have more choice and greater expectations of convenience. The winners in this new environment will be those who act fast and smartly leverage their own assets.
Retailers need to take a new approach to adapt. They need to rethink their business models across four pillars: reimagining their networks, reimagining their stations as mobility hubs, driving new growth areas beyond the station, and supporting the customer journey with advanced sustainability support.
As the world continues to change, fuel retailers need to adapt in order to stay competitive. They must seize opportunities that will allow them to carve out a role in the lives of consumers around the world. If they do, they’ll not only survive but thrive in the years ahead.
So what do you think is the future of retail? What measures are you implementing to keep staying ahead of the game? Let us know!
Stay tuned for our next article to find out more about the future of retail stores and strategies.
(Source: BCG, Petronas, ACAPMA)