On the road again: How service stations must adapt in the post-pandemic era | NTT DATA

Mon, 27 July 2020

On the road again: How service stations must adapt in the post-pandemic era

The roads are busy once again but service station operators know that it may be many months before traffic and fuel demand return to the pre-crisis levels.

In this “new normal”, the first priority for service station operators is to ensure customers once again feel safe visiting a service station and that their staff also feels safe working there.

But there is also another, more significant challenge facing the operators, one that predates the Covid-19 crisis but has acquired a new urgency because of it: the operators need to become more agile to cope with uncertain market conditions and much more customer-centric, offering innovative products and services that are aligned with the needs of today’s customers.

New technology plays a key role in enabling that business transformation. Cloud-based platforms can be used to quickly launch new services and rapidly scale them out to a network of 1,000 or more service stations.

Contactless and mobile payments have acquired a particular importance in the health crisis. Not only do they reduce the possible risk to service station staff from touching cards but they also reassure the customers.

Pay-at-the-pump has also received a big boost during the pandemic as it means customers do not need to enter the store to pay. They can be on their way quicker as they do not need to stand in line to pay, and it reduces unnecessary contact with people and surfaces that other people may have touched.

Service station operators may be reluctant to offer pay-at-the-pump as it discourages drivers from entering the store, where they can be enticed to make impulse purchases. In the US, for example, only a third of fuel customers typically visit the store after filling up.

In the past decades, many service station operators have sought to reposition themselves as convenience store operators as a way to boost basket sizes – up to 60% of their sales may come from non-fuel purchases.

While they may not be able to compete with the assortments offered by supermarkets, service stations in many countries have considerably expanded the range of convenience foods and other items suitable for top-up purchases, which obliges them to adopt the sales and marketing techniques and the technologies of mainstream retailers.

Of course, the Covid-19 crisis has temporarily made people less keen to get out of their vehicle and enter the store, but it remains to be seen how long their cautious attitudes prevail. Nevertheless, there are ways to interact with the customer and make them feel valued even if they are reluctant to enter the store.

Here, the mobile phone is an obvious ally, and the fuel retailing industry is only just begun to explore the possibilities of using mobile technology not just for contactless payments but also for mobile-focused loyalty programs. Service station operators see how mainstream retailers that have put loyalty at the center of their mobile strategies and they also want to leverage their abundant customer data to offer omnichannel loyalty experiences – sending personalized offers to a customer’s phone when he or she drives onto the forecourt for example. By leverage the customer’s purchasing history, operators can create tailored promotions practically on the fly and ensure they are more relevant.

Let’s not forget that buying fuel is for many a “grudge purchase”. Nobody particularly enjoys a trip to a service station, particularly if they will be €50 poorer when they drive away. So, service stations need to look at how they can leverage modern technology to make the process of buying fuel less onerous and convert it into an opportunity to deliver a better customer experience.

 There are many ways to do that, and in this series of blog posts, we will look in more detail at technologies can help service stations reinvent their business around the customer.

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