As the electric vehicle (EV) market rapidly expands, retailers are evolving their business models and offerings to meet changing usage patterns. Kelly Brown describes how fuel retailers can become preferred destinations for EV charging by developing a compelling CX and investing in the right locations with the right offering.
With predictions for an explosion in EV adoption over the next three decades, some see EV charging as a threat to fuel companies. However, it could be a massive opportunity for fuel retailers to add a new, stable revenue stream.
By building on their existing infrastructure in prime locations, access to capital and customer knowledge, they can diversify and future-proof their business. Many see an EV charging network as an essential element for growth by keeping a strong stream of customers at fuel forecourts and convenience stores. It’s also critical for achieving their goals of net zero emissions.
With EV charging now on the cusp of becoming more profitable than conventional fuels, an overwhelming majority of retailers (95%) are either already offering or planning to offer EV services:
Ampol plans to have 120 sites in operation by end of this year
Z Energy is installing EV chargers across more than 40% of its network by 2025
bp will increase its network of EV charging points to 70,000 by 2030, including 1,000 chargers in the UK, Australia and New Zealand
Shell will install 50,000 EV charging points by 2025
Total will increase its EV charging network in Europe to 150,000 charging points by 2025, up from 18,000 today.
However, the move to EV charging is a major business disruption and risk.
Fuel retailers face formidable competition from other entrants, including OEMs, power companies and pure-play charge point operators (CPOs).
Any large-scale investment in EV charging points must not only earn back the capital expenditures invested, but also operate profitably. With the large electricity demands from fast chargers and extremely high power prices, many EV charging businesses still operate at a loss.
Despite these hurdles, the future is clear. Without significant changes to their business models, at least a quarter of service stations worldwide are at risk of closure by 2035.
So what are the key factors for success?
To become a preferred destination for EV charging, retailers are exploring three areas:
Offer on-the-go charging
While EV drivers can charge at home or at work, these charging stations are likely to be slow, low voltage points. On-the-go stations use higher power, DC charging points that let EVs fully charge their batteries in under an hour.
With their existing infrastructure in prime locations and established fuel retail operations, fuel retailers can fill in a gap in the EV charging infrastructure and capture a convenience premium.
It’s already a massive opportunity for fuel retailers – 29% of current EV drivers already charge their EVs at service stations, and a further 21% would like to if the option was available.
However, it will require significant investments to develop an attractive, competitive and profitable EV offering. With recharging taking far longer than refuelling, operators need to adjust their station formats to provide expanded services and facilities. And ideal EV charging locations won’t necessarily correspond with the best fuel locations.
Capture commercial fleets
EV charging for large business-to-business fleets is a growing opportunity as governments and businesses move to decarbonise their vehicles. Electric vehicles are already being deployed en masse in short-haul transport, last-mile logistics and commercial business fleets.
While likely to become highly competitive, fuel retailers can secure first-mover advantage with an end-to-end offer, combining “on-the-go” and “at-depot” charging.
Create a compelling CX
Innovative fuel retailers are investing early to learn about customer needs and experiment with new propositions and formats.
They’re creating a compelling mix of convenience, speed, reliability and affordability:
Mobile apps will cement customer loyalty and increase return visits
Reliability is a focus: drivers with a low battery charge will prioritise sites where chargers consistently work properly
Provide clean and safe locations, with expanded seating and decent restrooms
Remove the frustration of waiting for a charger by offering reservations
More time spent charging will give more dwell time, so provide customers with more reasons to visit and generate additional revenue by offering barista-made coffee, fresh food options and other premium services such as high-end car washes
Apply analytics to develop cluster- or even site-specific offers tailored for local buying opportunities and using transaction histories to customise product bundles, pricing and promotion to increase sell-through without compromising margin.
Want help to differentiate your EV charging offering?
If you’re looking for help to innovate to serve customers, not vehicles, get in touch. We’d love to help you develop the distinctive and frictionless c-store experiences consumers now expect.
