What does the future hold for convenience stores and gas stations?

Author
Mike Welsh
Publication Date
16 June 2021

What does the future hold for convenience stores and gas stations?

What does the future hold for convenience stores and gas stations?

A lot has changed in a year. Before 2020 and the global pandemic, the convenience space was either the place where you filled up your tank, got a quick bite and some snacks, or a combination of the two. Today, convenience takes on a whole new meaning for customers. 

COVID-19 completely changed the way that customers engage with convenience stores and gas stations. There were fears about touching pump handles and an increased desire for curbside pickup for food and retail items, to name a few of the changes we witnessed. Some stores took this seriously, implementing new digital solutions to reduce friction for their customers. This kind of digital transformation was no small feat, but the payoff has been great. In one case, we saw a 4-digit uptick in orders simply because the convenience store offered its own mobile app! 

All of this proves that leading convenience retailers will help shape and define the new normal, especially as more consumers flock to stores that offer a truly convenient experience. As the definition of convenience changes, cstores that pay attention to their customers and offer these truly convenient experiences (as defined by their customers) are the ones that will prevail.

But some remain unconvinced, questioning the lifespan of gas stations and whether they will survive post-pandemic. Let’s address this.

Will gas stations become obsolete or evolve?

A common question that many c-stores and gas stations are grappling with is “will we become obsolete?” As the work from home lifestyle becomes more permanent and consumers don’t need to fuel up as often as they did pre-pandemic, this becomes a more pressing question. Considering consumer affinity for convenience, however, I don’t think obsolescence is a foregone conclusion.

Gas stations have been reaching out to Mobiquity to inquire about how to get customers into their retail stores (moving from the forecourt to the backcourt) and how they should elevate their foodservice offerings to capitalize on the quick, convenient experiences that customers now demand. All of this, while also transforming their brand from simply a place where you only fuel up to one that offers arguably more value than a grocery store or restaurant, in some cases. This shift has led us to work with convenience stores on evolving their digital customer experiences and digital products to match customer expectations.

It’s important to note that, another reason this question comes up is due to the growing interest in hybrid and electric vehicles that require far less gas to get from point A to point B. If we think about whether this means the gas station will become obsolete or evolve, I refer back to the struggle that all businesses face: change. 

When I approach a business that is considering the risks and opportunities for change, I often find them reverting back to what they know and becoming protective of their core business. They will be cautious about transformation due to the plain fact that their intrinsic value no longer matches up to the extrinsic reality. COVID was a good example of this. Not everyone was ready or willing to change. 

But when a business does accept change and begins to transform, process improvements occur, inertia ensues, and then new normals are unearthed. Just look at companies like Uber, Netflix, and Airbnb. The consumer is interested in hyper convenience, silent utility, and a soaring degree of personalization. Consider experiences over things - self service, and ultimately smooth, satisfying workflows that fit their expectations every time, via every channel, on any device.

Is this the end for 'gas' cars? Will electric cars replace gas cars in twenty years?

While cars powered exclusively by an internal combustion engine and gasoline still make up the majority of vehicles on the road, hybrid and electric cars have been growing in popularity. It’s impossible to know for certain whether battery packs will replace gas in twenty years, but convenience stores and gas stations should start thinking about how this may impact their business and what they can do to support customers with electric vehicles. Some public spaces already offer charging stations for customers, but the bigger question is – will fuel pumps be defunct at some point in the future? And what will this mean for the design of the typical convenience store?

Will gasoline filling stations eventually be phased-out? What should convenience stores do to prepare for hybrid and electric vehicles?

Without a crystal ball, it’s hard to know if fuel pumps will ever fully go away. However, we should start thinking about what the future holds and how we can prepare for a world that’s more environmentally conscious. Here are some ways that c-stores and gas stations can get ready for more hybrid and electric cars:

  • Electric charging stations: Of course, we’d be remiss if this wasn’t the first item on the list. But it goes far beyond offering an ev charging station for your vehicle. What was once a five minute engagement to fuel up could now be a 30 minute experience for charging. This drastic change should have gas stations rethinking how they can maximize those extra minutes to keep customers engaged. Perhaps the future of convenience stores looks more like a shared work or social space, where customers can multitask while charging their car. In this type of scenario, electric vehicles could be a boon for c-stores who plan ahead and consider the interaction between charging stations, the physical store and the digital experiences that would make this new kind of fueling as convenient and efficient as possible. 

  • Mobile apps: If you don’t already have a 4+ star mobile app, it’s time to invest in one. We worked with Kum & Go to create their mobile fuel pay program, which allows customers to fuel their car in a touchless way, reducing the amount of touchpoints necessary. Imagine if the same could be done for an electric charging station. What if your customer could drive up to a fueling station, initiate the charging process, pay for the service, and then sit down inside your store for a coffee or sandwich, all of which they order and pay for using your mobile app? Your convenience store mobile app design should address today’s challenges but also prepare you for the future.

  • Loyalty and rewards programs: Customer loyalty is something that many businesses struggle with, but rewards programs are one of the best ways to impact positive behaviors like visiting more often and buying more on each trip. And we’re not just talking about coupons. Personal, one-to-one experiences are preferred by customers and can include:
    • Anticipation of arrival notice with a targeted redemption opportunity
    • Ability to make suggestions based on purchase, traffic, weather, location, and recent action like fueling, reloads, nutrition, browsing behavior
    • Nudges based on micro segmentation and trained models around use, context, and behavior (both physical and digital). 

Make sure that the programs you have are working for you and providing a fair exchange of value in order for customers to share their data and fully embrace your offering. That’s how you build a great loyalty program.

  • Personalization through AI/ML: Incorporating personalization, AI technologies and machine learning into your digital strategy will be huge when it comes to the future of convenience stores and gas stations. For example, enabling customers to fuel up, pay for, and order food in one app that has all of their information saved reduces the amount of effort on a customer and makes their lives easier (and thus creates a truly convenient experience). It’s more than simply knowing your customers’ names. By going deeper and using your data and analytics to learn about consumer behavior and then using those insights to produce offers and rewards specific to them, you will see better results. Some ideas for putting this into practice include:
  1. Train a model, one that already exists 
  2. Consider more, deeper, extensive, appended data, not only credit card swipes or transactions
  3. Experiment with a science-based method: watch then act
  4. Dig up past ideas from the ‘cutting room floor’ and discover whether they could succeed with more data
  5. Build indicators and enablers for behavior that can be observed to discern influenceable and predictable patterns
  6. Establish Wildly Important Goals (WIGs) that go beyond the whirlwind of the day to day
  7. Manage fragmented attention with small, smooth, successful flows for users

If you’d like to learn more about how digital technologies transform your convenience store or gas station, contact us.

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