While the world’s leading countries are actively discussing the fourth industrial revolution (not only do they discuss it, but they actually create and take part in this revolution), most Ukrainian companies, unfortunately, continue to stand aside, not able to keep up with the rapid development of innovations in the world, therefore, losing hundreds of thousands dollars of potential profit. In 2017 Ukraine ranked 50th in the Global Innovation Index. There is no wonder that we ranked 85th out of 138 in the Global Competitiveness Index. At the same time, we have an impressive amount of progressive technological companies that develop innovative IT solutions and outsource them to Europe or the USA, when their intellectual potential and experience could be successfully used in our country resulting in the development of our economy. Moreover, PwC research has shown that companies that invest more than 25% of their R&D budgets in software solutions grow faster than their key competitors, which invest less.
Today, we are going to discuss this issue with experts from the software development company [bvblogic]. They have been working on innovative solutions for companies from different industries for nearly 10 years. One of their key areas of expertise is fuel retail business. The company has experience in working with leading networks of gas filling stations in Ukraine, as well as extensive research in this field in the world. So, programmers and analysts of [bvblogic] company told us about the innovations that may be used by Ukrainian fuel companies right away. And leading companies consider implementing them right now.
‘In our everyday work, we mostly deal with foreign clients, and Ukraine’s IT business often has to work under such circumstances. Foreign companies are usually one step ahead of ours. They develop much faster and their queries and ambitions are extremely high. To be able to satisfy their needs and demands we are constantly exploring the markets, studying trends, collecting and generating progressive solutions, which are subsequently implemented by foreign corporations. It is a pity that similar innovations are not being implemented as actively in Ukraine because the potential and prospects of Ukrainian business are huge. We would like to share our experience and speak about some interesting trends for fuel companies. We hope this information will be useful and inspiring, and will stimulate the development of national companies.’
Andriy Khomyn, business analyst, [bvblogic]
The world is constantly changing and modern reality determines new business conditions and rules. Our traditional view of gas stations has become outdated. Today, a gas station is not just a place where you can refuel your car, moreover, with the increase in the number of electric cars, gasoline will no longer be a top priority for new gas/charging stations. Today a gas station is a place for a pleasant and useful pastime, and companies have received new opportunities to offer their clients more different services, goods, and possibilities. The types of fuel can change or even disappear, but people will never stop drinking coffee and eating. Right now, in the western countries, the income from the non-fuel component of gas stations often exceeds 50%. For instance, let us look at Shell, one of the industry’s global leaders. Food and restaurant business has become a major component of the company’s revenue.
“People’s need for convenience retail is more frequent than their car’s need for fuel”
Istvan Kapitany, head of retail for Shell
So, here is a list of seven interesting innovations for fuel retailers worth considering
- Smart loyalty programs. In a highly competitive environment, it is very important to get customers’ loyalty and keep it. Different services nowadays are able to help companies cope with this task. One of such services is Navizor This is a smart navigator, which is a product of [bvblogic] company, and it is already known in 37 countries as a service for choosing the best route taking into consideration the quality of the road coverage. But it also has an integrated smart loyalty program. The service helps to make personalized offers to drivers at the right time and in the right place. Here is an example: a driver is planning his/her route from Kyiv to “Bukovel” resort in the Carpathians, this is quite a long trip of more than 600 km. Usually, a driver needs to make a short stop every two or three hours to have a cup of coffee or lunch, or simply to relax. Navizor application can lead the driver to your fuel station, not to your competitors’ one. And this is how it happens. When a driver is on his/her way and is getting closer to your gas station, the system sends him/her a special offer based on the analysis of his/her preferences. The system knows whether he/she likes hot black coffee or ice tea, and what his/her favorite burger is. So, the driver gets an individual message, for instance ‘You are getting closer to our gas station, and we invite you to visit us. Your favorite coffee is waiting for you as a gift from our company.’ This approach helps the fuel company to interact more closely with the target audience – drivers, to better understand their needs and make personalized offers. The customers receive bonuses and good service, and the company gets an increase in sales and customer’s loyalty. In addition, the user of the mobile app can easily see a list of partner gas stations located nearby and find out the distance to them in kilometeres or in minutes of driving, and also check the availability of certain services at the gas stations (for example, car wash, maintenance services or availability of a specific kind of fuel).
- Another solution is smart key chain integrated with the mobile application. The system, located at the gas station, traces the presence of the client in the immediate proximity, gives an opportunity to count the number of visits to the gas station for the accumulation of bonuses in accordance with loyalty programs. The recognition device communicates with a smartphone via Bluetooth and sends special individual offers to the client according to his/her preferences. Smart key chain provides a number of additional useful functions. The mobile application sends a reminder when the user is away from his/her keys (minimizes the risk of losing the car keys). Also, the “find your key” function is provided – when the button is pressed, the key chain starts beeping. If the keys are too far, the application will show their last location. The function works both ways, enabling you to find your phone with the use of your key chain. This functionality is based on the technology of iBeacon micro navigation and RFID identification, and the physical implementation is done with the use of a small coin-sized device.
- Digital menu for companies that cook and/or sell food. A digital menu gives the user an opportunity to quickly and easily order the required dishes, choosing their ingredients. The application displays the list of ingredients of all dishes with their prices and availability, so the user could mix them creating exactly what he/she wants. This functionality is implemented with the use of a very familiar and convenient technology drag & drop. By the way, the functions of digital menus can be very useful not only for gas stations, but also for fast food restaurants and other similar businesses.
- Smart procurement and intelligent analytical systems. Fuel companies that sell additional goods at their gas stations, and especially those who cook their own food, face a serious problem of procurement optimization. Most gas stations have quite small premises, and thus a limited storage capacity. For those who cook, it is extremely important to have the freshest products available in the optimal amount. It is necessary to avoid extra product spoilage or other shortage-related issues. There is a great solution – smart ERP systems. They enable one to automate enterprise resource management and to properly plan purchases. Such systems analyze an average need for various resources and notify the administration of the need to order certain products, or even automatically form orders. Systems also provide an analysis of the consumer’s behavior and preferences for efficient managerial decisions.
- Remote purchases. In the modern world everyone is always in a hurry and each second of our time is priceless and important. Modern innovative mobile applications enable users to make pre-orders and remote purchases, significantly saving our time. Buyers no longer need to wait in lines and waste their time choosing products from shelves or showcases. The list of all goods with their prices, features and information on their availability is right in the user’s hands, in his/her smartphone. You can have your own virtual cart and fill it with everything you need on your way to the gas station. Integration of a bank card makes it easy to pay for everything in advance and receive your purchase already packed at the cash register of the gas station. Mobile application can also have an additional functionality, for example, users’ money can be instantly transferred between their accounts no matter if they have the same bank or different ones. Another important feature is integration of user profiles with social networks with the possibility to share impressions and preferences with friends and followers. It is not a big deal, you say? But in fact it is a very important factor. According to Buzz Media research, 65% of people get influenced by the opinions of their friends when choosing the product they are going to buy.
- Cashless solutions. The automobile world is changing incredibly fast. Electric cars, self-driving cars… what next? Probably, the gas stations of the future will work without employees and all the processes will be automated and robotized. Although, these changes are in the future, right now, leading fuel companies are moving away from the standard refuelling process through the implementation of cashless solutions. Most foreign companies have been using card payment systems for quite a long time now. But the technology has gone even further now. With the use of modern mobile applications, you do not need your cash or even a bank card, sometimes you do not even need to get out of your car to refuel it. All you need is a smartphone with a mobile app installed. This functionality is implemented through the appliance of QR codes directly to the gas pumps. The user scans the code with their smartphone, chooses the number of liters or the sum of money to be used, the proper amount is debited from the user’s account, the payment is credited, the gas station employee inserts the gun, the system identifies the type of fuel and the fuelling process starts. Meanwhile, the cash register prints the receipt remotely, thanks to the integration with the mobile application. Besides, a user can get an electronic version of the bill by e-mail or right in the app.
- Smart equipment and devices. With the appearance of more and more additional goods and services as a part of gas station activity, fuel companies faced a new problem of an excessive number of tasks assigned to the staff. The process of control for the smooth work of the equipment and the high-quality performance of the personnel by all the necessary functions has become more complicated. Modern information systems allow monitoring the temperature and humidity on the shelves, inside the refrigerators, in order to avoid the annual multi-million costs of losing products that have got spoiled. Not only is it possible to monitor the parameters, but also one can remotely manage them. Just imagine, you can check the temperature inside of each refrigerator from a distance of many kilometres to the gas station and correct the temperature regime remotely only with the use of your smartphone. You can perform many more functions as well, managing your coffee machines and other equipment. Tracking coffee machines and remote control of connected devices is a new trend that is actively developing in the world. As for European fuel companies, 25-30% of their profit from non-fuel products is the sale of hot drinks, and this direction demands special attention. In Ukraine, smart technologies are not so popular yet. It is very informative to monitor the number of coffee cups sold, to analyze the demand and customer preferences, and to receive useful notifications or warnings about what is needed to be done. For instance, ‘clean the filter’, ‘coffee machine needs preventive maintenance’, or simply ‘fill up the coffee in a coffee machine’, etc.
This list of ideas can be supplemented with a large number of other solutions, depending on the specific features of each individual company. These solutions can help our gas stations operate globally, gain customer loyalty, automate routine processes, create additional user-friendliness, apply an individual approach, avoid unnecessary expenses and risks, and enhance their success. Ukrainian business has a tremendous potential to open up, and we are confident that this will happen very soon through the cooperation with innovative technology companies.