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Choice and added-value keys to adoption of alternative payment methods

Apple_Pay_and_contactless_payment_logoWhen it comes to checkout and payment, new technologies are abounding and retailers across all industries are trying to keep up. Whether it’s payment via a mobile wallet, mobile app or emerging in-vehicle payment technologies for fuel, the options continue to increase.

Convenience store operators and fuel retailers are responding to the changes with upgraded mobile apps, wider adoption of the various mobile wallets available, and both Shell and Chevron in the United States are now offering in-vehicle payments, with Shell partnering with General Motors and Chevron with Honda. Others are following Amazon’s lead and offering cashierless checkout for a frictionless experience.

But how can c-stores here in Canada gain greater consumer adoption of their new, alternative checkout offerings?

The key is to offer added value and a reason to use the technology besides just payment, according to Kevin Grieve, North American payments lead at Accenture, a consulting firm based in Dublin.

“Mobile payment is the end game, but it’s taken longer to adopt… because there has not been enough value provided by the solutions,” Grieve told Convenience Store News. “There are multiple payment methods — whether it’s a retailer’s own mobile app, Apple Pay, Google Pay or Samsung Pay — and people will align with what provides the most value to them.”

For c-store chains with their own branded mobile app, adding more than just payment ability will be key to converting customers and driving usage, he said, pointing to Starbucks as a best-case example. The coffeehouse chain connected its loyalty program to its mobile payment, which helped drive usage. Starbucks also added mobile ordering to allow people to pay before even entering the store.

“Consumers will drive demand, but this is where the future is headed and c-stores should get into it now. Do the pilots and tests, and get the customer feedback to know what works and what doesn’t,” Grieve advised. “At one point, Starbucks had no drive-thru and now, they don’t open a Starbucks without them because it’s what consumers wanted.”

Many c-store chains are adding loyalty programs into their branded apps, along with mobile payment. For example, Shell worked with General Motors (GM) to integrate its Shell Pay & Save program into GM’s in-vehicle payment system, and also offers this integration though its own branded app.

Even those offering mobile self-checkout for a frictionless experience are including loyalty in the mix. 7-Eleven Inc. announced a pilot of mobile self-checkout that work through the 7-Eleven app, and the retailer integrates its 7Rewards loyalty program into the process.

Those c-store operators using Skip, a third-party app that enables frictionless mobile self-checkout, also have the ability to link to a loyalty program.

Going forward, offering value will be even more important as more payment methods surface and competition heats up between apps and payment technologies.

If an app doesn’t offer a relevant experience — not just payment — it isn’t likely to last, according to Patrick T. Raycroft, a consultant at W. Capra Consulting Group in Chicago, who specializes in c-store, petroleum, QSR and specialty retail, as well as digital commerce technologies. “Just being able to pay on the phone doesn’t do it the way people anticipated.”

And it’s important to offer multiple checkout and payment options to customers so that they can choose which works best for them. Allowing for Apple Pay, Chase Pay, Google Pay and more provides convenience and ease, which is what today’s consumers are looking for when shopping.


Curb appeal and promotions drive fuel-only customers inside a C-store: Study

The majority of fuel sold in North America is sold at convenience stores. However, getting motorists to come inside the store after filling up has been an ongoing challenge for the convenience channel.

Citing State of the Industry data from NACS, the US-based association for convenience and fuel retailing, GasBuddy noted that a convenience store’s inside sales generate almost three-quarters of all gross profit dollars. Yet, some estimate that a similar number of consumers fill up and drive away — never coming inside to make additional purchases.

Forecourt_Lg_032619Converting those forecourt customers to inside customers is not impossible. In a new study, Canopy to the Store, GasBuddy found that conversion depends on a c-store operator’s ability to meet consumer needs of safety, cleanliness and hospitality. Additionally, consumers show “a strong interest” in specific strategies and promos that can move them from the pumps to the store.

First impressions count: Think curb appeal

GasBuddy released a report summarizing the findings from its surveys conducted in July 2018 and December 2018. Chief among its findings: Curb appeal matters.

Calling the forecourt “the first handshake that welcomes customers to the store,” GasBuddy explained that consumers are unlikely to go inside a store if they perceive it as dirty, boring or unexceptional. Reputation matters as well.

Frequent customers cite the following factors as having a strong or moderate influence in their opinion of a store before stepping inside:

  • Store design and upkeep (82.54 percent)
  • Cleanliness of the fuel area (79.7 percent)
  • Quality of lighting (79.6 percent)
  • Brand reputation (58.6 percent)
  • Opinions of friends and family (55.12 percent)

Moving inside, GasBuddy found that restrooms matter. According to the survey results, 22.6 percent of consumers said they frequently make a purchase after using the restrooms at a c-store. Another 56 percent said they occasionally make a purchase.

However, the restrooms must be clean. Nearly two-thirds of consumers said they have visited a gas station’s c-store with the intention of using the restroom, but decided to leave and go elsewhere.

Top reasons for avoiding a c-store’s restroom are:

  • Restrooms were dirty;
  • Restrooms were outdated and/or poorly maintained;
  • C-store was outdated and/or poorly maintained;
  • Restroom required a key or an access code; and
  • Customer did not feel safe.

GasBuddy’s report also revealed that knowing that a convenience retailer was committed to clean, quality restrooms would probably influence nearly 42 percent of consumers and definitely influence 27.19 percent.

“Every restroom visit is a sales opportunity. It’s a chance to connect with fuel-only customers who would otherwise rarely — or never — wander inside the store. Unfortunately, retailers who provide outdated, dirty, or poorly maintained facilities are not equipped to leverage this opportunity,” GasBuddy stated, calling restrooms “a litmus test for overall store quality.”

Offers and promotions drive sales

Beyond the look and feel of a store, convenience store retailers need to reach fuel-only consumers where they are — on their phones. According to GasBuddy, more than half of consumers look at their smartphone while refueling and, more notably, nearly three our of four consumers aged 18 to 34.

“This opens many opportunities to drive in-store sales through relevant offers and promotions,” the report noted.

Fuel discounts can hit the spot. In a recent GasBuddy study, 65 percent of consumers said gas prices impact their ability to spend money on other items and services.

Relevant orders also deliver results. When asked which kinds of mobile ads influence their decision to visit a convenience store brand, consumers said:

  • Healthy food options;
  • Redeemable coupons for convenience store products;
  • Loyalty rewards for convenience store products; and
  • Loyalty rewards for fuel savings.

The Canopy to the Store report also found that nearly 71 percent of consumers surveyed belong to a rewards program for a c-store or gas station. Of those, 48.78 percent use a rewards program very frequently, 34.2 percent somewhat frequently, 12.84 percent somewhat rarely, and only 4.17 percent very rarely.

Minimal savings and discounts on products consumers don’t purchase are among the reasons why they rarely use a rewards program.

A c-store retailer can change consumers’ minds, however, if the program offers consumers the ability to: build up points to spend on what they choose; earn discounts on fuel for in-store purchases; and get discounts on products they purchase daily or weekly.

To download GasBuddy’s full Canopy to Store report, click here.

Originally published at Convenience Store News.