Forecourts are morphing as businesses and should be regarded as ‘mobility retailers’, according to Bernie Williamson, Shell’s UK general manager.
In her presentation on ‘Preparing for the forecourt of the future’ at Forecourt Trader’s inaugural Summit this week she told delegates: “We’re looking after not just vehicles, but people on their journey. It’s more important that we talk about the services that we’re offering – we’re serving really busy people on the go.”
She revealed that on Shell’s company owned sites, one in three transactions is for convenience retail only, which represents a massive opportunity: “The forecourt convenience sector is growing about 3% faster than the overall convenience market. But the market is set to be huge and still massively growing - £8bn is out there and up for grabs by 2023 apparently. I think that’s a prize worth going for.”
Williamson also talked about the importance of trust and loyalty, referring to a survey that showed “more trusted companies can sell us three times as much as less trusted companies, and can charge a 13% price premium”.
She also referred to another survey that revealed one third of people are disconnecting from companies they consider to be less ethical; while conversely more than a third are connecting with companies they consider to be ethical.
To this end Shell has undertaken several initiatives to reduce its carbon footprint. For example, last year it achieved zero waste to landfill; it has also replaced its plastic bags with compostable ones.
“Our service stations now have less than 50% of the carbon footprint they would have had two years ago, because we have now switched to completely renewable electricity in our company owned estate,” explained Williamson. “Convenience retail is very hungry on refrigeration and ovens, so we are replacing our equipment on our estate for energy-efficient purposes.”
Shell is also building trust in its relationships: “Last year we launched Shell Go Plus and are seeing phenomenal results,” revealed Williamson. “Compared to Shell Drivers Club we’re seeing more frequent visits, greater basket sizes and higher fuel volumes; plus 85% opt-in for marketing communications when they register, well above the industry average. It means we can communicate with our customers – it’s driving loyalty, trust and value.”
Shell will also pay for loyalty scheme members to offset their carbon footprint on credits on their behalf.
In terms of fuels, Williamson said the industry had a responsibility to take more cleaner energy seriously.
“In the past we were predominantly fuels retailers. Shell today is probably around a half-and-half split between goods and services and fuel retailing. But where we need to be in the future is very clear - we need to have greater convenience retailing; greater goods, greater services; and of course this new sector called mobility.
“What will that look like: will it be hydrogen, will it be EV, will it be something else?”
Last year Shell installed 70 new EV charge posts on its service stations. These were predominantly 50kW per hour, enabling a 30 minute/80% charge; but the company is now moving into ultra-fast charging – enabling a 10-minute/80% charge for cars that can take it.
“We put down our first 150kW post last year and we’re moving into that space more and more,” explained Williamson. “That’s important because customers don’t have time; they are here because they’re busy; typically they’re on route to somewhere else.
“We’re also hosting three hydrogen stations – we will do more - and we’re learning. We know EV is growing rapidly - from a tiny base - but we have to be ready for the future, whatever that means.”
Williamson questioned what forecourts of the future will be: “Will they require airport-style lounges, or will they have no staff in them and all self-service? Or will they look like the mock-up of our Fulham site that’s proposed for this year which will be just an EV charging hub and we will take out traditional fuels?
“We are offering a mosaic of solutions for our customers, until it becomes even clearer for the future.”