We made it through another year of extraordinary challenges – from still battling with COVID and its uncertainty, hard hit global economies and supply chain shortages, to soaring fuel prices – the aftershock of the Russia-Ukraine war, that led to inflation reaching an all-time high since 1981. But that’s not all. According to the reputable Surveys of Consumers issued by the University of Michigan, 2022 also saw US consumer sentiment fall more than expected, hitting a record low. Ouch!
For many, this is what made 2022 the “perfect storm,” leaving businesses reeling, global industries in a state of flux, and the fuel and convenience retail sector hard pressed to stay ahead of the game. The pains and uncertainties of 2022 will, without a doubt, carry the retail fuel sector well into 2023.
This year will be driven by transformation. Not only will it be a year of change for fuel retail management solution providers, site owners will also have to work extra hard to win new customers and preserve their customer base, to raise consumer sentiment. 2023 fuel retail trends will focus on the omnipotent consumer and the shopping experience. While this doesn’t sound like a novel idea, to maintain loyalty, today’s fuel retailers will need to regain customers’ trust in technology, in the brand, in efficient service and delivery, and breathe life back into the term, convenience store.
Here are the “Top 5” fuel retail trends that will impact our industry in 2023:
- The AI takeover.
AI is efficient, predictive, and accurate, and in 2023, you can expect to see more AI-integrated tools in fuel retail stores. C-stores will increasingly use AI to better price and manage in-store products to enhance the consumer experience. AI will also be used to improve employee efficiency by eliminating mundane and repetitive manual tasks, with a move towards cashierless checkouts, and AI-enabled shift scheduling. Lawson’s, for example, one of Japan’s largest c-store chains, use AI-driven data to discount expiring products to help increase sales and minimize food waste. Software powered by AI algorithms gives the retailer product prices based on expiration dates, seasonal products, and other factors, all calculated by the AI as the best chance at being sold.
- Just how “secure” is secure?
In a concerted effort to boost their relationships with customers, and provide a truly seamless, and yes, “frictionless” shopping experience, fuel retailers have turned their attention to IoT solutions and devices, making “data security” one of the most critical issues of the year. Add to this, the surge in implementing third-party systems, as ERP and customer loyalty programs being integrated into c-store payment systems, have become a free-for-all for cyberattacks. But implementing ‘smart’ solutions comes at a price – and that’s because cyberattacks are growing in size and scope – and fast! With reams of customer data literally “up for grabs” during self-checkout, using guest wi-fi, and loyalty apps on the rise, fuel retailers are increasing their vulnerability to security breaches, every day. This means they will be investing in monitoring and securing their digital assets and implementing additional software solutions to strengthen their overall security posture and reduce the risk (and the damage!) of a cybersecurity breach.
- Brand-new c-store formats.
With the move towards EVs, some fuel retailers this year, even before installing charging stations, will be redesigning their traditional roof-covered pumps, not only to make room for future EVs, but to increase c-stores’ revenue streams. To further boost c-store sales, the new format will include cashierless stores, where customers can shop their products and leave, without having to wait and pay at a checkout – while their cars are charging. This will require c-stores to install a combination of technologies, such as cameras, sensors, computer vision techniques, and machine learning and AI software. Management Consulting firm, Oliver Wyman, adds, that to increase revenue streams, c-stores must widen their choice of products, services, and delivery channels, with made-to-order and grab-and-go food, mobile purchase, order at the pump or charging station, curbside pickup, drive-thru, and home delivery. Plus, according to Forbes, the 2023 c-store format will see a major increase in retail media networks, where physical retail stores and websites will become critically important advertising sources for vendors. Ad space sales on websites, in-store displays, mobile apps, and even streaming services, are expected to be c-store retailer’s largest revenue stream going forward.
- More power to the EV.
When it comes to electric vehicles in 2023, we are anything but surprised that EV is among the top 5 trends. As EV charging becomes exceedingly more accessible, c-stores will have the opportunity to expand their offering. According to Bloomberg NEF, by 2030, over 50% of all new passenger cars in the US will be electric. This phenomenon is attributed to the US government’s clean energy reform, aimed at zero emissions by 2035, and that leading car manufacturers are keen on going “all electric” within a similar timeframe. EVs will have a major impact on fuel stations, with the rising EV customer base, not only in search of charging stations, but also a welcoming venue to spend more time (and money!), with accessible shopping, business centers, and restaurants. For EV consumers, this means while waiting for a 30-minute charge, they will almost certainly look forsomething to do. Here, most consumers will grab a snack, go shopping – or both.
- Long-term loyalty.
Get ready for a massive increase in customer loyalty programs and incentives in 2023. As c-stores compete against massive grocery store chains and QSRs (Quick Service Restaurants), c-store customer loyalty programs will have no choice but to step up. This year’s consumers are more determined than ever to save money on everything – including filling the tank, and impulse food, beverage, and other purchases at a c-store. Top loyalty customers are by far, the highest spenders, the most frequent visitors, and the first in line to remain loyal during an economic slowdown, or as time has proven, during a pandemic. Loyalty programs must be more than an incentive to buy. In 2023, they must be user-friendly, app-friendly, and “over-friendly,” by incentivizing each and every consumer, every club member with points, rewards, and real value-added products when they need them most.
The c-store and forecourt of 2023 will certainly keep fuel and convenience retailers and their management on their toes. While it may seem like a steep climb, retailers who onboard advanced technologies today, will be primed and ready to serve an onslaught of customers in search of fast, efficient, and personalized service. 2023 will be a year of transformation, powered by retail media networks, AI-driven processes, customer loyalty programs, EV charging stations, and new-fangled site designs. But ultimately, it will be a year with the spotlight shining on the consumer.
Meet the new 2023 consumer who demands fast and seamless refueling, where location-agnostic shopping is geared towards their every whim, and as loyal customers, they are guaranteed rewards and savings on fuel, food, and household products. And perhaps the most important of all, they are met with a warm and welcoming smile from a c-store employee.
For all the technology out there, for all the fuel retailers who ready and willing to change, what will help revive 2022’s consumer sentiment in 2023, will be to personalize services and offerings with a keen understanding of consumers’ needs – long before they even realize they need it.
Find out how to increase site efficiency and revenues and power your business in 2023 and beyond.
Contact us to talk to an Orpak fuel retail management system expert.