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Gas stations are losing (Here's a novel way they'll adapt)

There's big business in finding ways to repurpose un-utilized capacity. Novel businesses are capitalizing with digital tools.
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Written by Greg Nichols, Contributor on
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Abandoned gas station.

Pixabay

Gas station visits have been steadily declining due to the rise in sustainable mobility options like electric and autonomous vehicles. At the same time, they occupy valuable urban real estate, and are set to derive an ever-increasing share of their revenue from convenience stores rather than fuel pumps. Can gas stations save themselves from redundancy by better utilizing their physical space and becoming ecommerce hubs?

The rise of ecommerce has presented an opportunity for retailers to analyze consumer needs and tailor their offerings to maximize revenue. Stor.ai, a digital commerce solution for grocers, believes gas station owners can jump on this trend and move from a vehicle-centric model to a customer-centric one. Gas stations today are already repurposing their store space to enable shoppers to receive deliveries at their convenience.

I reached out to Mendel Gniwisch, CEO of Stor.ai, to discuss how fuel retailers can reinvent the customer journey and use digital tools to extend the customer relationship beyond occasional visits to the service station.

GN: Let's start with basics. What is the Stor.ai concept, particularly its innovative utilization of space?

Mendel Gniwisch: Stor.ai was founded in order to assist grocers with their digital transformation by combining digital customer engagement across all touchpoints into one platform. Previously, online grocery shopping had developed separately from the in-store experience, resulting in a fractured shopping experience characterized by disparate digital touchpoints. With most shoppers now combining in-store visits with some use of ecommerce, stor.ai leverages the latest in AI and personalization technology to help grocers retain their unique brand loyalty while meeting evolving customer expectations, online and in-store.

Most retailers sign long-term leases on their stores, but when they signed those contracts 10 or 20 years ago few could have foreseen just how quickly ecommerce would skyrocket. Retailers are faced with a new reality of grocery stores serving both shoppers and pickers and a growing demand by customers for hyper-efficiency, speed and personalization. 

Stor.ai's end-to-end digital transformation solution helps retailers use the space at their disposal as efficiently as possible. With the grocery industry's future set to be defined by a fusion of in-store and online shopping, in-store real estate needs to be maximized to help retailers meet customers' ever-increasing expectations for quick, friction-free fulfillment.

Our picking-app allows for efficiency for the retailer, especially now with increasing labor shortages, while our platform ensure convenience and personalization for the consumer ensuring that the customer benefits at every touchpoint. 

GN: What are some of the obstacles gas stations are confronting amid changing driver behavior and new mobility technologies?

Mendel Gniwisch: Gas station visits have been steadily declining due to the rise in sustainable mobility options like electric and autonomous vehicles. Simultaneously, due to the pandemic, fewer people are driving into work on an everyday basis.

Fuel retailers are in a position where they need to rethink their strategies, build their capabilities, and transform their businesses to support these serious changes. Otherwise, the changing way in which fuel is consumed risks making gas stations redundant – which is especially threatening for their owners and franchisees given the value of the real estate they occupy. That's why the gas stations of the future will be expected to offer an expanded range of flexible and needs-based shopping options in order to first survive and then thrive.

GN: What does it mean to move from a vehicle-centric model to a customer-centric model? What's the vision for gas stations under Stor.ai's influence?

Mendel Gniwisch: Moving from a vehicle-centric to customer-centric model entails reinventing the customer journey by using digital tools to extend the customer relationship beyond occasional visits to the gas station.

By focusing on addressing the needs of customers, gas station owners can offer value even when drivers don't need to fill up on fuel. The goal is to create a seamless, engaging customer experience that goes beyond the traditional service station offering.

The rise of ecommerce is affecting all retail verticals, but the need to adapt is especially pressing for gas stations given that their traditional offering is predicted to become increasingly less relevant.

As fuel becomes less critical, gas stations are left with two principal assets: their location (often prime real estate in or adjacent to cities), and their small on-site convenience stores. 

The gas station of the future will invest in developing new digital functions and new technology capabilities that fit into consumer trends to streamline the shopping experience. They can expand pre-existing offerings, build a click-and-collect infrastructure, or even place a dark store on site.From delivery on the go to the frictionless customer experience, fuel retailers concerned about the decline in fuel demand can find growth opportunities elsewhere by increasing operational efficiency from their real estate and refocusing their energies on convenience retail.

GN: A lot of this is about empowering smaller retailers with tools that recently have been the exclusive domain of major brands. Where else are you seeing opportunities for mom & pops to redefine their role and operations?

Mendel Gniwisch: Across the board retailers want to retain control of how they use customer data rather than farming it out to third parties, helping them tailor their products as best as possible to customers' needs and prioritize consumer-first commerce. 

Third-party providers are ideal for a short-term fix to manage an instant digital transition, but this comes at a cost: The provider might initially drive traffic and revenues, but very soon, the customers could be the provider's rather than your own. Instead, retailers are looking for independent solutions like stor.ai to help them build their own online presence, own their customer interactions and data, and offer shoppers a digital experience that reflects the unique characteristics of individual brands. 

GN: What's next for Stor.ai? Where does the company expect to have its biggest wins in 2022?

Mendel Gniwisch: Most customers now shop in a hybrid manner, meaning that they do some of their shopping through digital methods, and some of their shopping using traditional, pre-digital methods. Stor.ai is embracing this changing reality, and in 2022 we are devoting our efforts toward helping retailers combine the most impactful features of both online and offline shopping and offer the best of both worlds. Retailers will increasingly be expected to bring the efficiency and seamlessness of online shopping to the brick-and-mortar store while also bringing the experiential highs and unique in-store experience to the online realm.

I see the optimal model for the store of the future as having a totally personalized experience, using the latest AI, AR and VR technologies to help customers enjoy the smells, sights and sounds that could at one point only be experienced in person.

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