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GUEST COMMENT Retail on the road: the experience opportunity in an electric era

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Charging the car offers a chance for retailing
Charging the car offers a chance for retailing
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The rise of electric cars is going to see more people spend more time in service stations while they charge – time for some retail

Joe Tabita, Group Vice President of Energy and Commodities, Publicis Sapient
Joe Tabita, Group Vice President of Energy and Commodities, Publicis Sapient

On the 5th of August 1888, Bertha Benz drove from Mannheim to Pforzheim without telling her husband, Karl Benz, or notifying the relevant authorities.

 

This illegal 106km journey along wagon tracks became history. Bertha was the first person to drive an automobile such a distance. On this journey, Bertha stopped at what was to become the world’s first petrol filling station, a pharmacy in Wiesloch where she purchased gasoline to refill the fledgling auto’s tank. It wasn’t long before other pharmacies began to sell gasoline as they sought to grow their role in this exciting new market.

 

Petrol stations are now omnipresent in our lives, and the global value of the market is expected to hit $2.7 trillion by 2022. But with governments and auto-makers around the world committing to ambitious regulations designed to reduce fossil-fuel consumption, the petrol station as we know it is on course for dramatic change.

 

This change is being driven by the exponential growth of the electric vehicle market - particularly in Europe. The UK saw a 144% increase in demand in electric vehicle sales in 2019 alone. Battery-electric vehicle registrations ended the decade with a record 1.6% share of the overall market.

 

Petrol stations have been entwined with retail ever since the first pharmacies starting selling gasoline on the side. Consumers quickly stopping for fuel would also stop and shop for various other items - generally small ticket necessities and FMCG products.

 

With the emergence of electric cars this all changes. And it spells a lucrative opportunity for those looking to define a new era of retail space.

 

Filling up a car with petrol or diesel takes a few minutes - and so it often doesn’t matter that the experience can be less-than desirable, in a mildly unpleasant outdoor space. Charging an electric car, however, takes around 15 minutes. That’s a long time for consumers in an era of snackable content and ten-minute TV. Retailers should view this as a prime opportunity to craft the next generation of digitally-connected retail experience.

 

And it is the customer experience which needs to change first. Consumers will want different things. It will take new kinds of service experiences for companies to stay relevant and build brand loyalty; price and proximity won’t necessarily be the most powerful draws anymore.

 

Much like the pharmacies in the late 1800s, fuel suppliers will need to shift their perspective from being a fuel supply business to being a retail business that sells fuel. This mindset shift opens breakthrough possibilities around customer experience, with technology as the enabler.

 

Connected cars present an interesting opportunity also. With more of them on the road in the next five years, they will be fitted with GPS and advanced smart technologies that not only tell drivers they are low on charge, but direct them to the station they should stop at based on their route and other unique parameters. Drivers won’t lose their autonomy - but they will have more tools at their fingertips to make educated choices. The fuel stations that offer the experiences that match the changing customers’ wants and needs will ultimately, have the advantage.

 

To offer the best experience to consumers, it is crucial to ask “what draws them here in the first place?”. The fuel station retail consumer is not generic; there are three profiles to consider: the daily commuter, the family and the long-haul commuter. Their unique needs dictate why and when they visit the fuel station and retail space. The daily commuter wants to get on and go. Here, fuelling up with always be the first draw. Families and long-haul commuters are more apt to be interested in retail products and services, but only if the industry can deliver exceptional experiences.

 

The fuel stations of the future are retail networks with a captive audience, a dynamic that’s ideal for digitally-connected retail experiences, advertising or entertainment. Imagine the fuel station as a showroom. It could be a convenient destination to check out the latest model of a luxury car for example, or even a space to look at aspirational homeware, or pick up some clothing essentials. The more consumer data the industry collects, the better positioned they are to work with partners to develop highly targeted experiences that reflect customer behaviours and purchasing patterns specific to different regions.

 

By 2025, the experience of pulling into a fuel station could look radically different to anything we have seen before. It’s easy to imagine a scenario where you pull into the station and your car is immediately recognised through licence plate recognition. You receive a welcome and some targeted deals aligned to your preferences and purchasing history. You pay via an app, and that’s it. No queuing at the pumps, and no queuing at the subsequent, retail store. It’s a seamless user experience, similar to Amazon Go.

 

The biggest difference is the amount of control that the consumer has over their experience. The technology enabling this is not new, and retailers in other sectors are already actively taking advantage of it. There is a significant opportunity to respond to disruption with innovation. For retailers, the shift to electric vehicles represents a lucrative opportunity to mold modern fuel stations into retail hubs, and put consumers in the driving seat of a next-generation experience.

 

Author

Joe Tabita is Group Vice President of Energy and Commodities, Publicis Sapient

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