Petroleum retail companies are fundamentally in the consumer mobility business.
As such, they are focusing more closely on consumer needs across all touchpoints of the customer experience. Companies are quickly transforming as they strive to improve all facets of customer experience and engagement. Digital technologies like cloud, data analytics and artificial intelligence are enhancing these customer journeys.
Retailers across the board are now focusing on much more than in-store engagement. They are building integrated engagement strategies comprised of both physical and digital channels, including in-store, web, mobile and social media. In keeping with these trends, petroleum retailers (consumer mobility providers) are building new customer-centric engagement strategies for multiple streams of business driven from forecourts. These new strategies, in turn, will potentially redefine all of their operational channels.
While a customer-centric strategy can deliver an elevated brand experience, a complete offering has to deliver higher value at each stage of brand engagement and at every transaction. Rewarding customers with superior value propositions and quality service delivery across channels is a difficult ask given volatile fuel prices, stagnating demand and shrinking fuel margins. For the customer to enjoy higher service levels and better value for the money spent, consumer mobility providers must look to increase the customer basket size, and cross-sell and upsell more profitable product categories across both fuel and non-fuel retail. The objective should be to create a highly engaging, long-lasting personalized relationship with each customer, from which both parties benefit.
As early as April 2021, a McKinsey survey showed that pandemic-driven digital adoption by consumers had largely plateaued but would also remain well ahead of pre-pandemic levels. In this context, energy and mobility companies are seeking to retain new-age digital consumers by improving digital experiences, investing in phygital, and putting consumer trust at the heart of all they do. They plan to move from traditional forecourts to big box formats like site super-hubs and truck stops to meet consumers' diverse requirements in fuel and non-fuel categories. With site super-hubs, they intend to focus on fulfilling diverse consumer requirements with loyalty systems, personalized offers, discounts, and mobile and web-based services that customers perceive as higher-value offerings.
Insight and data-driven targeted offerings, personalized promotions, one-on-one communications, and digital payment solutions are the core capabilities that business will need to be able to deliver customer-centric propositions. Developing these core capabilities and then developing technology solutions is a very specialized task and requires an all-encompassing, clearly defined digital strategy tackling all aspects of operations. The lack of a digital strategy, including channel strategy, can lead to ad-hoc decision-making, and the outcome can be incoherence from both a business and operations perspective as well as a significant load of technical debt.
A comprehensive omni-channel strategy, captured as an element of digital strategy, will bring channels such as physical, social, mobile and web together and enhance them with the two other key elements of digital strategy: cloud and data.
Some factors that can hinder the formation and execution of an effective omni-channel strategy are:
A harmonized omni-channel strategy that embodies customer-centricity will look to resolve all of the aforementioned roadblocks.
A complete 360-degree view of the customer is the backbone of a data-driven enterprise. The 360-degree view will capture both the historical and current context of the customer and will include elements such as: the customer's demographic profile; loyalty card data and historical purchases; favorite gas-filling outlets; average spend across product categories (fuel and non-fuel); purchase patterns for groceries, beverages, and home products; type of vehicle (budget, sedan, luxury, motorcycle, gas, battery, hybrid, etc.); payment preferences; and data from partners and even social streams. The customer 360-degree view enables personalized communications and leads directly to offer uptakes, revenue increases, and improved customer satisfaction, resulting in sustainable and extended brand-customer relationships.
Data management becomes key to any intelligent insightsdriven operations. A comprehensive data strategy is required, which identifies data ownership, data lifecycle management, and use of data for driving processes—both backend and customer facing—resulting in more contextual and personalized engagement with customers. A connected business architecture that brings together back-end and front-end capability areas (see figure below) creates the right platform for developing a data-driven, customer-centric, omni-channel strategy.
From a data governance perspective, the core challenge for businesses is to manage both structured and unstructured data from an ever-increasing number of touchpoints and anticipate the implications of this data on the database infrastructure. The next challenge is to standardize point-of-sale (forecourt, C-Store, etc.) and order management processes across touchpoints and harmonize with the core fuel retail system used by the enterprise and its retail promotion partners. Simultaneously, this process requires integrating the CRM and loyalty management systems of the enterprise and those of partners.
Fortunately, the groundwork for this transformation has already been put in place by traditional retailers. Petroleum retailers must adopt the technologies that work best for their needs (location-sensing technologies, augmented reality, and real-time enterprise visibility of retail inventory, for example) to give customers an engaging experience combined with "endless retail aisle" capabilities. Using a combination of these technologies, typical petroleum retailers and their franchisees could overcome the limitations of retail space and inventory that impact their non-fuel retail C-Store products and sales. In the future, for example, a customer might pre-order non-fuel products offered by fuel retailers over a mobile app and schedule a pickup that coincides with their morning commute.
Traditional business wisdom in retail has always dictated increasing the number of outlets to increase reach and profitability. An omni-channel strategy is a digital extension of this traditional retail maxim. Moreover, an omni-channel approach is becoming an unavoidable imperative for petroleum retailers seeking to enhance the flexibility and scalability of their operations, provide a superior value proposition with respect to competitors, and discover new avenues for growth.
Sudhansu Choudhury is a consulting partner in Wipro's Energy downstream domain. He is a Chemical Engineer and post-graduate in Business Management and has 23 years of experience in energy industry as well as IT domain consulting in B2B customer, mobility and fleet, LNG, refining, and low carbon energy. He is focused on competency development, solution development and transformation initiatives for downstream product, customer and low carbon business in Energy downstream.
Manu Sharma is a consulting partner in Wipro's Energy downstream consulting team. He is an Instrumentation and Control systems engineer (Bachelor of Technology) and has Masters in Business Administration (MBA) with specialization in strategy development. He has 27 years of experience spanning across multiple industries including energy and utilities. His interests are customer centric transformation of energy industry along with diversification and development of new business models. He leads capability development and client consulting engagements in the space of business and digital transformation for our energy clients globally.