More change will happen in forecourt retailing in the next 10 years than has happened in the history of the sector so far.
Irish Independent, 2018
Forecourt retail has been a fundamental pillar of modern society for over a century. However, with the rise of technology, sustainability and increased competition is there work to be done to stay profitable and relevant?
The fuel business has thrived for decades from being a necessity in our lives. Often regarded as a grudge purchase, there’s no doubt it’s been facilitating and supporting daily life for many years. Although, with margins on fuel now shrinking, forecourts must look at other forms of revenue to take its place.
Forecourts still have the upper hand on their retail competition. They operate in prominent and easily accessible locations on most major routes and receive repeat and consistent customers. Upselling non-fuel products is now the modus operandi for firms.
Higher margin products will secure future growth. Car wash, food-on-the-go and coffee sales are becoming the new staple to focus upon, especially as a cup of “Black Gold” yields a higher margin than the average tank of fuel.
Some forecourts are even venturing deeper into the retail sphere, incorporating pharmacies, full restaurants and merging with technology to facilitate endless aisle or click and collect options. A diversified set-up is becoming the norm.
The urgency to innovate and pivot isn’t only due to shrinking fuel margins. Disruption from driverless cars as well as longer lasting batteries in electric-vehicles will slow fuel consumption considerably.
Electric vehicles will be the next standard form of transportation, which can be seen easily from governmental directives – for example Ireland has set itself the target of ending the sale of fossil fuel vehicles by 2030. Infrastructure to cater for E-vehicles will be needed in fuel stations, although the loss of fuel revenue will need to be made up elsewhere.
Data is the new Oil
Consumers now demand a more personalised experience within retail. Amazon has set the standard for how brands interact with customers, they now are accustomed to a certain level of personal relevancy throughout their shopper journey.
To create this personalised and relevant experience you need a combination of data and intelligence. Data is generated from consumers historical purchases, social or real time event data or through monitoring behaviours and movements in-store. Intelligence is more complex consisting of IoT tools, AI-processes and machine learning.
Forecourts have huge amounts untapped customer data ready to be utilized. The ability to communicate efficiently with customers, personalise and improve experiences as well as optimise the time spent in-store is what will drive long term value for forecourt retailers.
Data is the new oil, which for forecourt retailers is a win-win…