Shell UK is preparing to launch the lastest version of its premium fuel V-Power in the spring. The new fuel, which features ’Dynaflex technology’ will be marketed across the media and on Shell forecourts nationwide as ’Britain’s best fuel’.
V-power was originally launched in 2008, updated in 2012, and following four-plus years of development will be relaunched again as the fuel that helps engines perform at their best.
The latest launch is expected to further boost sales of the premium fuel, which is already the leader in its field, according to David Moss, Shell UK’s general manager, retail. "Over half of all premium fuel sold in the UK is V-Power (Kantar data), and we are keen for it to penetrate further to motorists who care about their car and its performance," he says. "Fuel is our thing. We are leaders and innovators and have made significant investment in fuel development, which is reinforced by our longstanding relationship with Ferrari."
The news was revealed at last month’s Shell dealer conference, held at the Celtic Manor Hotel, and attended by more than 300 dealers.
The focus of the conference was very much on pushing high standards across the board, as in the company’s coined mantra about the five ’fs’ fuels, facilities, food, friendliness and fones.
But fuels were a particular focus this year with the forthcoming V-Power launch. Moss believes there’s more growth to come from premium fuels when people realise the benefits that performance fuels have: "There will always be people that care purely about price. But V-Power is aimed at motorists that care about their vehicles. If it’s a new vehicle V-Power maintains the performance of that vehicle; if it’s an older vehicle V-Power helps to restore the performance of that engine.
"Our technical partnership with Ferrari has enabled us to test and prove the performance of V-Power fuel 99% of what goes into an F1 Ferrari goes into a customer’s vehicle. The endorsement by BMW M has also helped V-Power diesel sales match those of V-Power unleaded.
"So we’ve decided to put more and significant investment into the interest our customers have shown in our performance fuel. We’ve been able to find various technologies the latest one being Dynaflex to produce a fuel which really helps engines perform at their best."
However, with the opening in February of Shell’s first hydrogen refuelling station in the UK at its Cobham service station on the M25 the messages at the conference weren’t just about hydrocarbon fuels.
"There are new fuels coming and we have to research those as well," stresses Moss. "In the UK we firmly believe that demand for hydrocarbon fuels petrol and diesel will be around for a very long time. We know that vehicles are becoming increasingly fuel efficient, and that the number of vehicles on the road will increase considerably. We also know there is a significant agenda to improve air quality, and transition to new forms of energy over time.
"However, what we don’t know is what those forms of energy could be in the future. It could be hydrogen, LNG, GTL (gas to liquid) or electric. Or there could be a resurgence of LPG. In Shell we’re looking at it all, and if I was a dealer I would want to make sure I had a contract/relationship/connection with a company with a great fuels heritage, so that when that company’s worked it out, they can bring that new fuel to market. That is what a dealer should expect from Shell."
Moss says the company has a large team of technicians who work very closely with the authorities to help formulate cleaner fuels. "As an energy company we have a responsibility to do that. But the transition to new fuels is not going to happen overnight."
Shell UK is starting slowly with its first forecourt-branded hydrogen outlet, with a couple more in the pipeline for this year - one at Gatwick and one at Beaconsfield. It won’t be on the scale of Germany (400 planned by 2020), because although there are left-hand drive hydrogen vehicles, there aren’t many right-hand drive versions.
"It’s a bit of a chicken and egg situation, but you’ve got to start somewhere. You need the vehicles; you need the customers to buy the vehicles and you need companies like ours to make the fuel available. You also need local or central government incentive to encourage people to make the switch whatever the energy source, it’s exactly the same challenge to bring the products to market."
Shell will be rolling out 10-20 electricity charging stations this year, to help understand and establish what customers truly want; and through its joint venture with Autogas it already has 250 sites selling LPG, which Moss believes is generating increased interest now: "LPG is a very clean fuel and compared to petrol and diesel is very cheap around half the price."
Another significant announcement concerned the pilot of a "totally new" personalised loyalty scheme, starting this summer on Shell co-owned sites.
"It’s both very exciting and complicated," said Moss. "Younger customers want ’here and now’ incentives to go and buy, based on their particular shopping behaviour. Shell is developing a personalised, one-to-one programme that drives loyalty and also provides us with data that can be used to make some informed choices about the customer value proposition, based on their shopping behaviour."
The Shell Drivers Club loyalty scheme, which is currently card based, will be accessible via a new app being introduced this year. And while all the 580-strong co-owned network offers the Fill Up & Go mobile payment service, Moss is hopeful that more dealers will take it on now that the company has addressed some key teething problems, such as poor wifi signals.
"We’ve struggled on the dealer network, and had to get Tokheim and Htec on board. We’ve paid for other technologies to make it work, and with the learnings we’ve got, we’re keen to get all those steps right with the dealers.
"If we believe what everyone is telling us about the future that everyone is going to be paying with their smartphones we have to be able to accommodate that."
Investment is continuing into Shell’s convenience formats Shell Select and Deli2go, which are complemented with the Costa coffee offer, which is selling at the rate of 15,000 cups a day a staggering 18.5 million cups were sold across the co-owned network in 2016.
These formats are complemented at certain sites with Waitrose (the relationship is expected to grow this year); Budgens (there are trials on four sites Denham, Aston Clinton, Milton Keynes and near Birmingham); Pizza Hut Express three pilots; and maybe a Costa serve-over.
"Different brands attract different customers," explains Moss. "We have a very good relationship with Waitrose our two brands are very complementary and customers love it. We are trialling different offers to complement our core offering, which is going from strength to strength. We’re on double-digit like-for-like growth on Deli2go. We’re seeing growth in the higher-margin categories profitability is considerable, providing due diligence is right. People have to have real competence to get into this space. You have to manage food properly with the respect it deserves.
"It requires excellence, hence our training is City & Guilds Accredited. The more the industry does foodservice properly, the greater credibility forecourts have as somewhere for people to stop when they’re on the move."
The drive to raise standards through the Shell network is relentless, according to Moss, who admitted to ’letting go’ two dealers because they weren’t managing safety and brand standards at a high enough level.
"We do that for the protection of the brand and for those dealers (currently 520) that want to have high standards. Shell is a premium brand and wherever you see a Shell sign there should be a consistently high standard of offer. Our team are not targeted on recruiting a certain number of dealers or litres. They’re targeted on the quality of the dealership and the like-mindedness."
During the conference nine dealers were recognised through the People Make the Difference standards scheme and will be treated to a trip to New York. They were measured on operating standards. Also recognised were customer service and forecourt service champions.
"We want the physical standards, but also friendliness and the human touch," explains Moss. Shell is committed to the UK and investment in its retail network: "If you’ve got a premium brand you need a premium station with a premium offer, with dealers that are prepared to invest and grow. We want everybody to win and be part of a premium brand."