Fuel Retailing: It’s Not Just About Price

Why lighting, cleanliness and the overall customer experience matter for fuel sales.
June 26, 2018

By Frank Beard

If you’re like me, you probably get a good laugh when you think back to the days of restroom keys attached to large objects. It seems like such an antiquated idea. After all, why would anyone want to return to a gas station that made them carry a hubcap to a sketchy outdoor restroom?

But consider what some retailers are doing right now. I recently visited a station in Omaha that had old water bottles and a rotten banana peel on top of the fuel pump. I’ve visited countless stores with deteriorating signs on the restrooms that say, “For Paying Customers Only”—despite the restrooms being dirty and outdated. I recently stopped by a major retailer’s location that was new and state-of-the-art a year earlier, only to discover that the forecourt was now filthy and the fuel pumps covered in grime.

Ten or 20 years ago, customers might have thought nothing of experiences like these: The thinking was, gas stations are dirty because gas stations are just dirty. But it’s a different story today, and nobody has to choose dirty, boring or unexceptional—even if they’re just refueling a vehicle.

It’s no secret that price drives fuel sales, but consider this: Although the most recent NACS Consumer Fuels Survey reported that 58% of American drivers say gas price is the most important factor when buying gas, that’s actually a 13-point drop from three years ago.

A recent GasBuddy survey found something similar. When we asked respondents to rank five factors based on their importance when choosing where to stop, it was no surprise that gas prices captured the largest share of top choices at 32%. But a different picture emerged when I filtered the results to look at the share of the top three choices. In other words, what issues were top of mind for respondents? Cleanliness rose to the top, with 75% of the top three choices, and gas prices fell to number three, with 59%.

Prices matter—they’re just not the full story. This can also be seen in Market Force’s most recent examination of the issue. Price mattered to 73% of respondents, but 53% said they care about lighting. Additionally, 39% valued a previous good experience, 37% said the speed of payment authorization is important, and 31% were concerned about the appearance and maintenance of the station. In other words, customer experience matters.

Don’t take my word for it. Have you looked at the online ratings and reviews that customers leave about your stations? As I explained in a recent column, it’s a great way to see what aspects of the experience do and don’t resonate. When pairing consumer ratings with location data, it’s also obvious that experience drives visits. The recent GasBuddy Q1 2017 Foot Traffic Report found that stations with below-average outdoor lighting ratings captured nearly 25% fewer visits than those with above-average ratings.

Experiential retail has become a bit of a buzzword lately, and for good reason. There’s a growing awareness in other retail sectors that brand differentiation through customer experience is essential. Especially for big-box retailers whose product offerings are largely interchangeable, and have the ever-present threat of Amazon looming over their heads—with one- or two-day shipping of the same products at lower prices.

But consider our industry. Many customers are apt to view one brand’s fuel as good as the next, and what if they need to use the restroom? What if they want a snack after they’re done refueling? It’s a safe bet that I’ll find many of my favorite brands for sparkling water, snack bars, sugar-free energy drinks, mixed nuts and chewing gum at any retailer I visit. Why should I choose one station over the competitor across the street, or the one down the road?

I usually get a few laughs when I talk about Sapp Bros. running billboards for “Mom-approved restrooms” at their travel centers, but all you have to do is read the online reviews to know it works. Other leading brands are pulling away from the pack with similar strategies—offering a compelling customer experience that drives visits and boosts their reputation.

Experiences matter in today’s marketplace. Customers have many choices. Five or 10 years from now, some retailers may look back and wonder why they didn’t realize this sooner.

Frank Beard is a regular NACS Daily contributor who has traveled to more than 1,000 convenience stores in 24 states. He raised awareness of the industry's healthful food options with his “30 Days of Gas Station Food” experiment, and he's an analyst/evangelist for convenience store and retail trends at GasBuddy. Follow Frank on Twitter here.

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