On average across Europe 18% of motorists check fuel prices using a price comparison website or app, a feature the majority of fuel retailers’ apps do not currently provide to motorists, according to a new report from Verdict Research.
The study, which analyses the role of smartphone apps and mobile payments within fuel retailing, provides strategic recommendations on how retailers can develop their current propositions.
Over the last five years the number of smartphones and tablets in Europe has risen dramatically year on year, with forecasts showing sustained growth over the coming years. This trend, coupled with the effective use of mobile payments and apps within other areas of retail, has made fuel retailers re-evaluate how they currently use mobile technology, said Verdict Research.
The new report, Mobile Technology in Fuel Retailing, examines the key differences between how consumers currently use mobile technology in their everyday lives and in relation to fuel retailers, revealing some key areas for fuel retailers to develop. On average, consumers use only four different apps on a daily basis, with practical apps being the most common types utilised. The main reasons for app usage are time maximisation (for example, while queuing), for special deals (eg Groupon) and for research purposes, usually price comparison.
The overview of smartphone apps provided by fuel retailers across Europe highlighted some fascinating insights, said researchers. All the major fuel retailers across Europe have an app and, while the majority provide similar features, analysis of customer ratings of these apps highlights a vast difference in quality. This provides insight into what consumers value from fuel retailer apps.
“Certain fuel retailer apps really stand out from the crowd by adding features such as games and interactive promotions which encourage consumers to check the app regularly,” said Robert Speight, an associate analyst with Verdict. “For fuel retailers to get the most out of their apps they need to make their apps more interactive and have more uses than just a site locator.”
By the end of 2012 there were more than 750,000 contactless payment terminals across Europe, with numbers increasing by 10,000 terminals per month as more retailers identify the key strategic benefits to mobile payment. Increased brand loyalty, higher fuel throughput per site, lower transaction costs and advanced fuel card services can all be achieved through the adoption of mobile payments at service stations.
There are strategic issues that could occur from widespread adoption of mobile payments by fuel retailers, Verdict Research claims. Infrastructure costs across a European network of service station to allow mobile payments will be high and with adoption rates of mobile payments still in their infancy, fuel retailers could be left with a payment network no one uses. In order for mobile payments to become successful, a change in consumers’ payment behaviour needs to occur to move people on from chip & PIN and see the benefits of using mobile payments.
“Mobile payments and increased app functionality can provide a way to target consumers directly and create brand loyalty,” said Richard Brown, a senior analyst with Verdict Retail. “Mobile payments and smartphone apps can provide fuel retailers with a new way to differentiate themselves from competitors by identifying their individual customers’ needs and create brand loyalty in a market that is currently predominantly ruled by fuel price.”
Retail TImes’ readers can find more information about the report by Verdict Retail can be found here,