March 09, 2015
‘Know Thyself’: For Petroleum Brands, The Future of Retail is About Looking Within
When Terpel wanted to reinvent itself a few years back, the Columbian oil and gas company sought to envision the gas station of the future. The design for its next generation of properties included wing-like canopies flying over the pumps, along with service bars, modern furniture and other unexpected flourishes inside its c-stores. In a nod to modern day technologies, Terpel even explored a wide range of options that included gas canopies sporting solar panels, park-like “green” roofs, recycled-asphalt parking lots, and roof structures illuminated by dramatic skylights and energy-sipping LEDs.
Envisioning the future in this way can be a valuable exercise. But the point is not to make predictions that will come true in 10 or 20 years’ time. Rather, it is to make thinking creatively about how today’s trends might shape tomorrow’s gas stations a regular practice. And when it comes to today’s trends, one of the most important is the need to create and develop meaningful brand experiences.
While petroleum companies will continue to try to differentiate themselves at the pump—offering the cheapest gasoline and/or the highest-performance additives—the fact remains that gas has become a commodity purchase for most consumers. How, then, do you get people to purposefully drive past your competitors and spend their money with you?
For the likes of Wawa, RaceTrac, Speedway, QuickTrip and Sheetz, the answer has been to focus on the customer journey. The idea is to make sure all aspects of the experience—from seeing a sign on the interstate, to pulling up to the pump, to walking out of the store with a steaming cup of java in your hand—will deepen your connection to the brand. Petroleum company executives are correct, then, to focus on securing control of the entire property—gas pumps, c-stores, carwashes and everything in between (up to and including websites and mobile apps). After all, this is the only way to completely safeguard the integrity of the customer journey, and to brand it distinctively.
In years to come, count on the petroleum industry to get even more sophisticated about their brands. For some, this will mean introducing more color, personality and humor, which is precisely what we have been seeing over the past few years across retail, consumer products and other sectors.
Imagine what would happen if Richard Branson, the outlandish founder of Virgin Group, were to get his hands on a portfolio of gas stations. You can bet the journey would be more whimsical, futuristic and fun than what we have come to expect—with a social conscience thrown in to boot. Technology would certainly be a part of the picture. At Virgin’s gas stations, dashboard-mounted RFID chips might enable members of the loyalty program to simply drive up to the pump, fill their tanks and drive off. No need to swipe a card or hand cash to the clerk inside.
But the challenge remains; how do companies encourage such customers to go inside of the site’s c-store? Maybe the pump reads the RFID chip, analyzes the customer’s preferences (the customer buys coffee and donuts every other week) and pushes a customized message to his iPhone: “Greetings. It’s great to see you again. As a token of our appreciation, just show this text to the cashier and you’ll get half-off your regular coffee and donuts.”
In the years to come, we know technology will continue advancing rapidly. It will become easier to pay for stuff—whether you’re talking about gas or potato chips. And of course, the POS system will know more about you, too (whether you find this creepy or convenient). The trick for petroleum companies is to incorporate such advances in ways that feel true to their brands. If your pumps have TV monitors or play music, that’s great. But is the content you play synched to the customer journey or disconnected from it? Let’s say a brand has some retro elements that the company has chosen to play up at other touch points. Why inundate your shoppers with the latest pop songs? It would make more sense, given your brand attributes, to play a loud “ding-ding!” as they pull up to the pumps, with 1950s Elvis or big-band music wafting from the speakers as they stand there and pump their gas. Rather than mash-ups of the morning news, the TV monitors could play cheeky, nostalgic visuals that echo your brand.
The notion here is to explore the potential for brand-right fueling experiences. If your brand attributes include “freedom,” “choice” and “convenience,” for example, you could have pumps that work just like everyone else’s—or you could strive to make the fueling experience noticeably faster and easier, on the industry’s leading edge. Like the individual words in a sentence, all elements of the fueling experience—from the design of the canopies and pumps, to payment-processing interfaces, to the types of fuels available—send a message to customers.
It’s important to think carefully about the messages you’re sending. Branding the journey is important elsewhere as well. Food, for example, is an increasingly important trend for the c-store business. Part of the reason—lifelong habits form early. According to the research firm NPD, Millennials have embraced c-stores’ broader food offerings in surprising ways, given the assumption that this generation prefers all things artisan and local. According to the research firm, c-stores accounted for 11.1% of Millennials’ food and beverage stops in 2014, up from 7.7% back in 2006. These younger customers also are big fans of fast-casual dining, which accounted for 6.1% of their F&B stops last year. Thus, c-stores that incorporate elements of fast-casual into their food and beverage approaches stand a good chance of winning lifelong customers.
But for the aforementioned retro gas station, it would be one thing to try to clone Chipotle Mexican Grill and quite another to put a brand-right spin on the idea to bring QSR into the c-store. Wouldn’t a throwback hamburger concept be just as popular, and bolster the brand?
Major site-configuration changes, too, could be filtered through the brand: If you replace your carwashes with battery-swapping or rapid-charge stations for electric vehicles in, say, 2021, one way to approach this would be to simply add the new amenities and advertise them, almost as a public service. Wouldn’t it be better, though, to make those changes with some panache and theater—to write a new chapter for your larger customer journey? They could be integrated into a brand-reinforcing, story-driven advertising campaign, with strong graphics, mobile web marketing and more.
Whatever the future brings in terms of technology, site configuration or anything else, do some careful thinking about how to make those changes in ways that reinforce your brand and encourage people to see the experience as consonant rather than dissonant. “Honey, Virgin Gas now has these pickup stations where you can order stuff from Best Buy or Walmart and pick it up right in their parking lot,” says Future Man to his wife. “What’ll Virgin think of next?”
People are searching for meaningful experiences, and this is likely to be just as true tomorrow as it is today. If commoditized merchandise is easy to acquire now, think about how easy it will be 10 or 20 years hence when delivery drones are crisscrossing the skies and you can 3D print anything you want (except maybe gasoline). But people don’t want just any old experience; they want experiences that speak to their values and personalities. In the future, customers will choose gasoline brands that appeal to their sense of identity, not just their wallets or pocketbooks (if those even still exist…).
Brand identity will continue to be increasingly important in the years to come. Simply put, those who create the most integrated and compelling customer journeys will win the day, with fundamentals such as price, convenience or having the right real estate being the price of admission. So think hard about the future, but also carefully consider your brand by looking within. Your customers want to know that you get them. How can you get them if you don’t even know who you are?
The full article is available here.
