Forecourt retailing

Why forecourt retailing offers some of the best insights into the future of retail

In fact, convenience is perhaps the biggest overall driving trend in the future of forecourt retail as identified at Shell’s roundtable event on Thursday (5th July). Those discussing these trends included István Kapitány, Executive Vice President of Shell Retail, Bernadette Williamson, General Manager of Shell UK Retail and Steven Fox, Sales Director of Retail at Booker Group.

It’s clear that consumers want convenience in both products and location when it comes to making last-minute dinner decisions. Petrol stations are by their very nature conveniently located. They are often already ‘on the way’ somewhere for a potential customer, whether that’s on the way to work, home, a friend’s, a trip or something else.

With people only likely to become busier in the future, turning the petrol station into a modern, stylish one-stop convenience shop can only seem like a wise move. Food-to-go and fresh groceries are a vital differentiator for brands, but these are also evolving as quality and provenance become more important to customers.

There are also other convenience opportunities for forecourts including using them as pick-up points for click-and-collect orders. Recently big retail brands like Argos and John Lewis have experimented with small format stores in train and tube stations around London. Used primarily for the collection of online orders they enable the retailer to have a presence in a key location but with a store that’s only around 5% of the size of their typical space. This is an ideal model for forecourt retail to adopt.

Another important trend is localisation. Although we may think of forecourts as being part of large nationwide networks, the reality is that regions of the UK are very different.

Steven Fox from Booker – a partner of Shell, offered an interesting insight that while there may be unifying trends, such as an increased demand for gluten or dairy free products, forecourts should also be thinking about stocking items that are tailored to local preferences, and this is reflected across its Budgens store portfolio. This highlights the opportunity for forecourt operators to work with expert retail partners to tap into these nuances in order to draw in more customers. The offering should never be static but continually evolving based on what the customer wants.

The roundtable also revealed the way that technology is impacting forecourt retail. Mobile functionality within the forecourt experience is already being explored with Shell customers in Thailand  to order food and drink via an app for delivery to their car. Shell customers can also now use their mobile to pay for fuel from within their car.

Along those lines, Shell has also trialed a new self-checkout system with IBM in London that uses RFID chips to scan an entire basket in one go. While in Holland, customers who live near to a petrol station can order food and drink via the Shell app to be delivered to their home late at night. This is a great example of how forecourts can leverage their location to offer more convenience to local customers.

Convenience and tech are also meeting when it comes to the connected car and voice recognition. It’s estimated that 98% of new cars sold in 2020 will be connected to the internet. It is also thought that 55% will have voice recognition built in by 2019.

This combination of voice control and connectivity could allow drivers to safely reserve items via voice while travelling, pre-order coffee, food or drinks, and even request that their click-and-collect order is brought out to them when they arrive at the forecourt. Connected cars give forecourt retailers the opportunity to imagine any number of different applications in the same way that traditional retailers think about the smartphone.

Forecourt retail could also take advantage of the increase in digital advertising to improve the shopper experience. This might mean tailoring the advert to the customer, based on facial recognition or even recognition of the car types on the forecourt, to offer something personalised.

There are also external trends that are unique to forecourt retailers. These include autonomous cars, a market which is expected to be worth $36 billion by 2025, shared mobility and alternative fuels. The future of forecourts is very much linked to the future of transport.

The shared mobility market is reported to be growing by 38% a year between 2015 and 2030. Whether it’s via the use of services like Uber, autonomous cars, ride-sharing or something else, shared mobility means that there may be different customers on the road – especially when it comes to passengers. Forecourt retailers should be taking this into account in their strategies.

Of course, one of the big things shaking up the forecourt business is alternative fuels. By 2021, all new Volvo cars will feature some form of electrification and this is likely to be reflected across other manufacturers as well. As sustainable fuel usage grows, the dynamic of the forecourt needs to change.

For example, it currently takes around 30 minutes to charge an electric car which means customers are spending longer at a forecourt. This creates the opportunity to offer value-added and entertainment services from hair cuts to kids play areas to keep them occupied while waiting. It’s worth noting though that work is being done to reduce this charge time so in the future customers may only spend as long charging their cars as they do filling them up now.

All of this is just the beginning. The opportunities for forecourt retail are about to get even bigger. Think tank RethinkX predicts that the number of passenger miles will increase from 4 trillion to 6 trillion by 2030 increasing the need for rest stops by 50%. More rest stops means more customers on the forecourt every year.

As we can see, like all of retail, forecourts are facing both long and short-term trends. The big advantage for forecourt retail is that it is by and large better set-up to respond to these changes than most high street retailers. Because of their dual-purpose nature, petrol stations don’t need to completely reimagine the store space to attract customers, but can focus on changing what they offer instead. This means they can respond faster to new ideas and afford to test out different concepts.

The most important thing is for forecourt retailers to make change part of their strategy now. That way they don’t need to waste time working out what to do when that changes comes – whether it’s in the form of autonomous vehicles, alternative fuels or customers wants.

Source: Cate Trotter, Head of Trends at Insider Trends https://www.linkedin.com/pulse/why-forecourt-retailing-offers-some-best-insights-future-cate-trotter/

 

 

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