The solution to the age-old conundrum of how to drive a fuel-only customer into the store could be on the horizon. Convenience-store operators around the country are keeping a watchful and enthusiastic eye on emerging technology that allows fuel customers to order in-store products right at the pump. The development “could offer great opportunity for certain stores. It could be the differentiator between you and your closest competition,” remarked Sean Bumgarner, vice president at Scrivener Oil’s Signal Food Stores, with 11 locations in Missouri.
Noah Sanders, senior implementation and analytics manager at High’s c-stores, which operates 48 units in the mid-Atlantic, is also enthusiastic about the prospects that merchandise purchases at the pump provide. “We would absolutely consider this, especially for our proprietary foodservice offerings or promotional items,” Sanders said. “Ultimately, getting customers inside the physical store is the key to driving sales,” he explained. “But if we can bring the store to consumers on their mobile devices, they’re still more likely to purchase something than if they never enter the store.”
Indeed, Peter Garrett, president of Volta Oil, the operator of 17 Rapid Refill c-stores in Massachusetts, New Hampshire and Rhode Island, believes a successful purchase-at-the-pump program can actually help build in-store traffic. “Eventually the process will draw pay-at-the-pump customers to the store to purchase items in the future,” he said.
Testing of the technology is already underway. QuikTrip is evaluating a “curbside service” in about half a dozen stores in Tulsa, Wichita and Des Moines, according to Mike Thornbrugh, manager of public and government affairs. Between 6 a.m. and 6 p.m., fuel customers can phone in an order and pay for it via credit or debit card while filling up, and a store employee delivers the merchandise to their cars.
If we can bring the store to consumers on their mobile devices, they’re still more likely to purchase something than if they never enter the store.
It’s too early to assess results of the pump-side delivery program, Thornbrugh said, adding that QuikTrip has “no timetable” to expand it to any of its other near-800 stores but plans to continue the test. The retailer tested a similar program 10 to 15 years ago, he added, “but we decided not to go forward with it.” One thing that has changed since the previous test is that customers now can order age-sensitive products for pump-side delivery. QuikTrip staff members “take all the appropriate steps that any responsible retailer would take,” Thornbrugh said.
Don Frieden, president of P97 Networks, which provides cloud-based mobile commerce and digital marketing support for c-stores, noted that his company is involved in a few “pre-order, pre-pay pump-side delivery” tests with c-stores. “C-stores are facing new competition, including grocery home delivery and two-hour delivery from Amazon,” Frieden said. “They have to do something new to compete.”
P97’s mobile apps allow fuel customers to select items to order as they fill up, and an in-store attendant delivers the products to their vehicles. “It’s perfect for parents with kids in car seats who need a gallon of milk,” Frieden explained. “It really allows c-stores to compete effectively with grocery stores.” Like Thornbrugh, Frieden said it’s too early to discuss results, but in general, he noted that pump-side delivery “will require awareness in the market” through marketing support. As customers see other customers receiving orders at the pump, word-of-mouth awareness will help build demand, he added.
The inroads with pay-at-the-pump technology come despite challenges encountered in recent years with “play at the pump” options for lottery ticket purchasers in several states. “It never really took off. We didn’t see any traction,” said Signal Food Stores' Bumgarner of the program, which was available at all of its stores for a few years until early 2019. He attributed the lackluster performance to a “lack of marketing” from the state lottery board and the fact that customers could only use debit and not credit cards to purchase their tickets. While the retailer noted that pump-side sales “didn’t hurt” the chain’s overall lottery sales, the program—which required upgrades to pump POS systems—didn’t help as much as anticipated.
Also contributing to play at the pump’s performance was the acquisition of Linq3 Technologies, the company behind the program, by InComm earlier this year. Mark Smith, vice president of sales and marketing, lottery and gaming, at InComm, said, “Play at the Pump was a successful product. Players loved it. The challenge was scaling it.” He noted that because InComm is also involved in POS pump technology, “Play at the Pump may be resurrected as little integration will be needed.”
Unlike the QuikTrip curbside-service test, other c-stores have signed on to GoSkip Inc.’s frictionless checkout, which allows customers to order and pay for in-store items at the pump via an app, and then step inside the shop for pickup. “No device at the pump is needed,” explained Marshall Mann, marketing lead at GoSkip, noting that consumers love the convenience of just walking into the store, grabbing their pre-ordered and paid-for cups of coffee and heading out the door. Store employees can verify the transactions through iPads located at the checkout counter. Mann added that “the functionality exists” for c-stores to offer direct delivery of in-store items to vehicles, and that a few c-store operators have expressed interest in the option.
Reduced Labor Costs, Higher Rings
The ability to order and pay for in-store merchandise at the pump provides benefits to both consumers and retailers alike, whether customers have to step into the store for pickup or the products are delivered to them curbside. QuikTrip’s Thornbrugh pointed to situations such as “a car full of kids or bad weather” as examples of times when curbside pickup can be a big convenience for customers. P97’s Frieden noted that the pump-side technology also benefits in-store customers as it means fewer guests queuing up at the register.
For retailers, pump-side merchandise purchases can mean reduced labor costs and higher basket rings, according to Frieden, adding that when app-based systems are utilized over POS devices, there’s no need for the investment in costly hardware or pump upgrades. In addition to driving larger baskets, the practice offers the opportunity for more frequent visits from customers who generally find it inconvenient to “get out of their cars and go inside,” he said.
Indeed, according to J.C. Harvey, director of retail channel strategy and commercialization at Coca-Cola North America, “two-thirds of c-store customers purchase gas but leave the lot without entering the store.” In an effort to improve that statistic, the soft drinks marketer has partnered with TPG Rewards to leverage near-field communication (NFC) tap-and-pay technology at the pump, allowing customers to tap their phones to POS on the pump and receive an offer to purchase a beverage. Once ordered, they pick up the drinks inside the store. “This capability benefits both the shopper by providing a convenient way to purchase beverages and the c-store operator by providing an opportunity to increase sales per trip,” remarked Harvey. While Coca-Cola was in discussions with a few retailers about the program, Harvey declined to provide details about those tests.
It’s perfect for parents with kids in car seats who need a gallon of milk.
As with any technology upgrade, frictionless pay-at-the-pump capability comes with its share of challenges. “The first step is to integrate with the store’s point-of-sale system,” explained Harvey. “The next step is to train store employees to effectively manage the
While in-store labor costs can be curtailed with pay-at-the-pump technology, Mann and Frieden noted that the option should only be offered when staffing is adequate. “Then, you’re just repurposing your existing staff,” Frieden said. But the biggest challenge, according to c-store and technology executives, is customer awareness that order-at-the-pump or curbside-delivery services are available. “It takes a long time to educate and inform customers,” the QuikTrip executive said.
As c-store operators look at the role that pump-side merchandise transactions will play in their businesses, Frieden pointed to the impact frictionless purchases are already having in-store. “Scan-and-go customers tend to add more items to their baskets because they feel they have more time to shop,” he said, resulting in higher rings of 5% to 6%. The same premise likely applies at the pump, he continued, as “consumers feel they are in control of their time.”
Frieden sees particular opportunity in targeting the growing ranks of ride-share and delivery drivers. “They consume more fuel than average, and their vehicles are their offices,” he said. “Anything that serves as a convenience will be popular.” Moreover, emerging “connected cars,” such as those powered by GM Marketplace, will allow fuel customers to order and pay for merchandise right on their dashboards as they gas up, Frieden noted, without having to swipe a card or use a mobile device.
While Thornbrugh said the future of curbside delivery is still unknown, other c-store executives are excited about the opportunity. “Ultimately, we want to make the experience easy and seamless for the customer,” remarked High’s Sanders. “As this grows, I see us possibly trying a ‘carhop’ service, where customers can order items to their cars while they fill up or park in designated spaces on the lot. Time will tell where we go with that.”
According to GoSkip’s Mann, c-stores already involved in merchandise purchases at the pump are impressed. “The early adopters are seeing the disruption that’s taking place,” he said. “They’re excited about the opportunity and the potential it provides.”