Big Interview: Shell Retail and the future of energy services

When you think of one of the largest retailers in the world, you wouldn’t automatically think of Shell, but this mobility services provider has 43,000 branded retail stores in almost 80 countries across the world.

And when you think of a petrol forecourt, you wouldn’t necessarily think of innovative technologies, but the world of energy is changing even more so than retail and Shell is using digital technologies to plan for the future of mobility services.

Convenience retailing

In recent years, the food retailers have had to adapt to changing consumer habits of convenience shopping. And Shell is no different, seriously stepping up its game to improve its ‘food for later’ offering, to ensure petrol stations are no longer known for their wilting bunches of flowers and rows of Ginsters pasties.

“We’re improving our ‘for tonight’ offer, and it’s been a big change, to be quite frank the thought of stopping at any petrol station and getting something to eat for the family, or maybe a bottle of wine, would never have even crossed my mind,” says David Bunch, global VP of Shell Retail. “It was crappy coffee and a Mars bar – all of your guilty treats, the salts and sugars.

“Now we’re improving the sophistication of the offer, we’re partnering with a number of brands and doing a lot of development ourselves to fulfil this mission of ‘food for later’,” explains Bunch, who has worked within Shell’s retail division for 20 years, so has certainly seen a big change in the retailer’s offering.

The retailer now partners with Waitrose, Budgens and Costa in the UK, while it has also developed its own brand ‘Deli To Go’. Bunch points to the fact that 50% of its customers do not even fuel up when visiting its stations, proving the power of its improved convenience offer.

“But we obviously want to tailor the offer and make the most of the moment as much as we possibly can.”

Technology innovation

And developing technology solutions is how Bunch intends to keep ahead of the convenience competition. From trialling an Amazon Go-like proposition in China and assessing the possibility of robots to fuel your car so you don’t need to leave your vehicle, to completely rethinking how the traditional Click & Collect model can be integrated with energy services.

While Shell has a number of Click & Collect lockers in its fleet, Bunch isn’t convinced this is all Shell could offer in the world of fulfilment when the brand has such a valuable real estate.

“Click & Collect, to be honest, is something we’re learning as we go,” he explains. “There’s a lot more demand than we’re ready to move with at the moment, so we’ve got to figure out how we move forward with that.”

He adds: “We have to work out what drives the best economic model to make it sustainable and Click & Collect has a role to play but can’t dominate the entire offer. Would a bank of lockers have more economic value and customer need than an extra coffee machine that’s serving 120 cups a day?”

Bunch says he is constantly being pitched by start-ups with the latest innovation in fulfilment, and the company has its own internal incubation programme which has delivered some interesting pilots already.

One pilot was Shell’s ‘fuel-to-you’ offer, called ‘Tap Up’. The service allows mobile app customers to request Shell to travel to them to fuel their car. It was first tested in the Netherlands and is now planned to be rolled out globally, while also offering potential options to combine fulfilment of a bag of groceries at the same time.

The forecourt of the future

Earlier this summer, the government announced plans to ban the sale of new petrol and diesel cars by 2040 to encourage the take up of electric vehicles. And Shell is already bolstering its electric charging capabilities by rolling out the technology over the next few weeks.

But due to the length of time it takes to recharge an electric vehicle, customers are most likely to refuel at home, so where does that leave the traditional petrol forecourt?

“I get a lot of questions about electric cars, what does this mean and how does that disrupt things?” says Bunch. “Sure it changes the game, but the technology that is being developed now that we’re pioneering – ultra-fast charging technology – is aimed to have a complete charge within 10-15 minutes, which changes the model a bit to ‘on the go’.”

Bunch believes if charging is reduced to 10 or so minutes, customers will be more likely to stop at a Shell station to top up their vehicles.

“We all manage our time to be as efficient as possible and this ‘on the go’ capability will not replace wholly charging at home or charging at work, that will still have a clear role to play, but what it will do is provide and reduce range anxiety.”

Bunch and his team are working to improve the forecourt model with additional services, so that when customers are waiting for their vehicles to charge they can stop for a cup of coffee at a café, pick up their groceries, use a fast-internet connection to do some work or even indulge in a shoulder massage. 

“Why should it be a chore to stop if you could make it a pleasurable experience?” he asks. “There’s a number of different possibilities.”

He adds: “If you think about any petrol station around the world, it is designed around filling a car, then along came a shop, which grew in size a bit, but the basic configuration hasn’t really changed, but if you flip that around and think about what is the customer need, you’re not going to have the shop stuffed away at the back.”

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