As the COVID-19 pandemic drives remote working and reduces the need for daily commuting, the quantity of fuel sold has notably decreased. Notwithstanding the impact of the COVID-19 pandemic, the rise of alternative fuels and autonomous vehicles (AVs) in the future will diminish the need for traditional fuels and impact revenue streams of fuel retail companies. How can these companies rebalance their revenue mix and grow customer relationships to realize more than refueling returns?
Remaking the non-fuel retail experience
A visit to the non-fuel retail or convenience store section of a fuel station when one refuels the vehicle is a quintessential activity for vehicle owners today. By providing convenience to vehicle owners who wait to fuel up, non-fuel retail services are an integral component in the revenue makeup of fuel retail companies globally.
In European and North American economies, the share of operating profits for non-fuel retail is up to 40%–50%, while in Asian economies, it is significantly lower at less than 10%.1 This means there is untapped potential for fuel retail companies in Asia to build on this revenue-generating opportunity.
To do so, deciphering the future consumer is vital. Understanding customer needs and delivering a unique retail experience is key to gaining a competitive advantage.
An EY FutureConsumer.Now study in 2019 showed that artificial intelligence (AI) would need to be an integral part of the marketing and selling strategies of organizations across industries. In the future, AI will drive how and when consumers make purchases by learning about their unique preferences, encouraging them to shop only with brands that reflect their values and purpose. Data-led insights provided by AI will help organizations create personalized experiences for consumers and form deep, profitable relationships.
AI will also help redefine how consumers move and commute. Future fuel retail consumers will be looking for fun and differentiated retail experiences that engage them individually and encourage return visits.
How can fuel retail companies optimize their reach to customers? The answer lies in hyper-localization and hyper-convenience.