The Coming Wave

This interview with Donald Frieden, president and CEO of P97, originally appeared in the September issue of NACS Magazine. It was brought to you with support from P97, a NACS Hunter Club company.

Self-driving cars seem to be capturing the public’s imagination these days, but you’re talking about connected cars. What is a connected car?
The car has traditionally been a mode of transportation requiring a human element to safely move from point A to point B. Self-driving cars aim to remove the human element, while connected cars look to transform the car into a mobile device capable of anything your phone can do, including commerce. Self-driving cars are still a few years away from becoming a part of our lives, while connected cars are here today. The connected car gives consumers the ability to have new voice-enabled commerce experiences including purchasing fuel and groceries, reserving parking, and restaurant ordering including pre-order and pre-pay with curbside delivery. Given that we spend 293 hours per year in our cars, according to the American Automobile Association, the ability to safely transact during those hours is a major step forward in convenience. It is also a feature that every major auto manufacturer is committed to providing.

What can a connected car do in the convenience retail environment, for example?
While the connected car is certainly attractive to the consumer, it presents an equally appealing opportunity for merchants to grow customer loyalty. The connected car gathers data—from driving patterns to purchase preferences—and gives merchants the ability to target consumers with relevant digital offers. Offers around consumer packaged goods, fuel discounts, available parking spots and more are welcomed by the driver, while the merchant benefits from increased sales.

So, what does this really look like?
Imagine you’re heading to work in the morning and you receive a low-fuel notification from your vehicle. Your car knows your preferred gas station, so it guides you to the nearest location once you’ve confirmed you’d like to fill up. At the station, you simply declare which pump you will use, and the car initiates the fuel purchase. Payment preauthorization, loyalty account updates and discounts are all automatically applied and processed within six seconds. Before exiting your car to pump your fuel, you receive a notification on your dash for a discounted coffee. You redeem the offer and decide whether to have it delivered to your car or go inside the store for pickup. You finish fueling, get your morning coffee and hop in your car. In a matter of just a few minutes with minimal effort, you’re back on your commute with coffee in hand. Now that’s convenience.

What does the coming wave of connected cars look like?
We’ve recently launched a program with Shell and General Motors in which P97 has enabled frictionless transactions at more than 10,000 Shell stations across the United States. GM drivers have officially entered the connected car revolution with vehicles serving as an extension of their phone. The first wave of connected cars is upon us and is something we are showcasing this year at the NACS Show. Other manufacturers have vehicles on the road with varying degrees of commerce capabilities.

How is this crucial to the consumer?
Convenience is high on the list for today’s fast-moving, on-demand consumer. Removing friction from the commerce transaction makes errands more tolerable and even enjoyable. But beyond making lives easier, connected car transactions are providing a higher level of security with tokenized cloud payments and multifactor authentication. Removing the physical credit card from the transaction process addresses skimming and other kinds of fraud that continue to plague the industry. Integrating payments into the vehicle eliminates the need for drivers to visit a dealership to renew a radio subscription or update a GPS. All of these transactions can now be executed with the same mobile wallet used to pay for fuel and parking from the comfort of the driver’s seat. Ultimately, mobile payments are becoming the preferred method of transaction—particularly in the prime $200 billion millennial buying demographic. Consumers will show purchase preference to those merchants that offer the convenience and security of mobile payments.

It sounds like this is a fast-moving wave. How can convenience stores of all sizes prepare today for what’s coming?
Many convenience stores today offer a branded app, but most only provide store locator services and limited in-store offers while a few others provide ACH payment capabilities. To embrace the connected car and the convenience that any mobile device offers, convenience stores must first embrace mobile payments. Allowing consumers to use their phone or car to transact builds loyalty, drives foot traffic into the store and increases basket sizes. The good news is that the industry is already moving in that direction with companies such as Phillips 66, Shell, Sinclair, Kwik Chek, Alltown, Liberty, Conoco, 76 and Gulf offering such capabilities. If convenience stores do not have this in their 2018 or 2019 strategy, they will soon find competitors grabbing market share within prime buying audiences. Once mobile payments are in place, convenience stores can then begin to leverage mobility to target consumer offers based on preference and buying habits. This creates an opportunity for greater customer loyalty and a platform for consumer packaged goods companies to deliver digital coupons. Done right, consumers will buy more with greater frequency.