Fuel retail: Insight to the new norm
One of my now daily visits to our local ‘garage’, reminded me of a famous quote by Henry Ford, who is said to have remarked ‘If I'd asked customers what they wanted, they would have told me a faster horse!'
You can see his point. In a similar vein, Steve Jobs, while leading Apple, developed the idea to ‘figure out what customers are going to want before they do. Our task is to read things that are not yet on the page.’
What we call the ‘garage’ is in fact a small six-pump fuel forecourt with a shop attached. It is a bit off the beaten track and is owned and run by a family who work in shifts to keep it open 06:00 to 21:00, seven days a week.
Covid-19 has had a dramatic effect on this family run business. Fuel sales unsurprisingly dropped off the edge of a cliff. However, non-fuel sales have sharply increased. People that did not use the garage before are now regular customers. The result is that the business is thriving and doing better than ever before. So why is this?
The answer lies with the fact that this family owned business has the flexibility and agility that is missing from its mainstream fuel forecourt competitors. When Covid-19 began to affect the local community, the response of the ‘garage’ was to provide a completely new product set in anticipation of what the community would need.
Overnight, sales went from petrol and sweets to PPE equipment (masks, gloves, hand sanitiser - all fairly rationed), fresh bread, milk, flour and locally produced salad and vegetables. They also ordered double the normal amount of newspapers. To cap it all there was everything needed to run a successful barbecue, right up to the wooden skewers.
The current situation means that most of the village now makes a daily trip to the ‘garage’. On a sunny day it provides a nice walk, but the more important point is that people can get what they need and also what they didn’t know they needed (such as wooden skewers). To the contrary, I have not heard of anyone in the village popping out to a mainstream forecourt to buy a hot dog or sausage roll.
Herein lies the problem for fuel retailers. To remain relevant, they have had to respond quickly to the challenges laid down by a pandemic, while also addressing the shift away from hydrocarbon transport fuels, which will alter consumer behaviour with an unanticipated speed and intensity.
Localised decision making based on insight regarding the customer, community and the wider government decisions has shown to be key in responding correctly and quickly to changing needs. Customer insight and data is always a vital piece of the puzzle but unless fuel retailers can gather, interpret and act on this insight quickly to shape their services to meet these changing needs, then they could follow other retailers (Blockbuster and Woolworths to just name a couple) who fell into decline and ultimately extinction.
The whole fuel industry is entering a new era, with the need to move at speed in responding to immediate challenges and reinventing for growth. Our strategy and solution platforms are designed to support current fuel retailer processes and to address current challenges, while also providing a roadmap to digitally transform their operations and services.