Experts are still debating what will replace petrol and diesel going forward, whether it will be current preferred electricity, green hydrogen, or some completely newly developed fuel

This development will also change customers’ habits and needs and service stations will have to create an environment and experience to meet those needs in order to attract customers. Massive upheaval due to a move toward alternative fuels, changes in car ownership and overall mobility trends makes it crucial for service station and network owners to stay on top of the latest market trends and capitalise on retail opportunities. Covid19 accelerated these changes as well.

Joe Hockenhull’s service station at The Stage Wigston is a prime example of a site using the latest innovations and technology winning Forecourt Trader of the year 2020. Prior to Covid19, we observed an increase in customers who began to prefer barista-style coffee, mainly for two reasons. Firstly, customers became more coffee educated and began to demand a premium product. Orders like ‘one-shot soya vanilla latte not too hot’ became an integral part of the customer experience at service stations. And secondly, if there is a coffee shop at the station, then there is probably another food offer or fast food, indoor seating, plenty of parking, hygienic toilets and free Wi-Fi. This naturally attracts customers who want to take a break on the road, especially families with children and business travellers.

Covid19 caused these future-ready service stations to be widely used by other people who, whether they worked from home or wanted to limit the number of stores they visited, were satisfied with one-stop shop where they could refuel, pick up food, eat well and have as good a coffee as they had in the cafe next to their office. Quality is one of the main drivers in the purchase of coffee and customers will not forgo this little luxury. For similar reasons, well-located fuel station cafes are popular places to hold business meetings or make conference calls now that more people are working from home. If in the future it will be electricity that will power us for decades to come, then the demand for c-stores and associated F&B services will be even greater than in the case of other currently discussed energies. For example, I will take one of the busiest stations and without question the most innovative station in Ireland, J14 Monasterevin.

Its owner, Liam Fitzpatrick, installed super-fast electric car chargers there, the fastest in all of Ireland. And it still takes almost 30 minutes to charge a car on average, 6 times more time than to fill a car with diesel or petrol. That means you have that customer for 30 minutes and now it’s about what you can offer them and how they can use that time effectively. At present, these cars are driven by high-income earners, and the average spending is high from this consumer (€20 on F&B). It is expected that the average spend will go down when the electric cars will be driven by the middle-income group, however, the volume of these consumers will increase and this will compensate for the lower average spend.

Unfortunately, there will also be more competition here. Small service stations that do not have the capacity or capital to invest in new technologies will exit the market. Customers will also have the ability to charge their cars at home which currently they cannot do, reducing the need to visit a service station. Also, non-fuel experts such as supermarkets and hospitality venues will be able to enter this market with few barriers to entry. Most retail chains have already started installing these technologies, and some even for free if you buy from them. They are followed by retail parks and shopping centres and more will come. Of course, you don’t go shopping every day, but retail will have strong competition. Another big risk will be companies owning super-fast charging technologies for which it will be relatively easy to enter the market. The only thing they will need is a location, such as renting part of a large hotel parking lot by the motorway. Then build a coffee shop so that drivers waiting 20 minutes to charge their car have somewhere to go for coffee, use the bathroom etc and you have another new competitor.

Location will be a strong factor in deciding where a customer will go but its role will be less than it is today. The main factor will be the code offers more services because people want to be able to come in and get everything in one visit rather than multiple visits to different stores. I think that one day in the future the petrol stations will be much larger and there will be a hairdresser and a pharmacy available. However, in the short term and with the current format of the stations, we are talking here about 4 basic pillars for petrol stations in the next 10 years, which they should adapt to succeed in the competition:

1. Good C-store with an extensive range of groceries, fresh and chilled, including dairy products, meat products and baked goods
2. Good services including a quality carwash and jet wash
3. Freshly made food at the station or a strong fast-food brand, an option for both if the space is not a factor
4. Excellent coffee shop as people will go where they can get a good coffee and where the quality is consistent in-store

Coffee will continue to be a staple of what stores will highlight but it must be superior quality and excellent delivery of the final product to the customer. And in this, companies like Insomnia Coffee can help the industry and bring high-street experience to service stations, including training know-how, the entire marketing calendar, or a loyalty scheme. Some of our franchise stores at service stations already use the Insomnia Click and Collect function, where the customer orders and pays for coffee, for example when they are at the parking lot or when they queue for the restroom and at the ordered time picks it up from the click and collect station inside the store. A really good customer journey and experience is paramount.

By Filip Spevak, Retail Partner & Franchise Manager, Insomnia Coffee Company