Back in the day, the most exciting thing about filling up was watching the price rack up faster than the gallons. Today, that pump can read your mind.
Well, not really. But it can take an educated guess, using purchase history to feed you “twofers,” video and coupons you might actually want.
For retailers rediscovering forecourt marketing, dispenser and mobile-payment technologies are moving beyond the trade-show floor, with pumps and cellphones capable of providing relevant offers, introducing new products and fostering brand affinity.
David Melton, who supplies about 50 sites in Alabama and Florida, is taking baby steps. “TV screens are everywhere with iPhones and iPads; everything’s visual,” says Melton, vice president of Quality Petroleum of Alabama in Birmingham. His company has four sites equipped with TVs in the pumps, and a fifth location scheduled. “We’re stepping one inch at a time.” Melton’s effort could eventually reap numerous advantages:
Customizing promotions based on past purchases.
Creating multiple touch points for upselling, loyalty, promotions, coupons and even checkout.
Moving low-price strategies from street signs to cellphones.
Eliminating data-security-driven upgrades as payment moves to mobile phones.
“Soon the dispenser will know who you are and show you content that’s relevant,” says Mark Williams, marketing manager for payment and dispenser applications for Gilbarco Veeder-Root, Greensboro, N.C. “Retailers see the pace of change is picking up, and more and more are keen to put in the latest [technology].”
Increase in demand over the past two years for Gilbarco’s large-screen-TV dispensers has picked up. While not disclosing figures, Williams says movement increased by “multiples” in 2011 over 2010, and sales-to-date figures for 2012 are showing similar trends.
From signage to sampling, marketing at the forecourt has always seemed a hitor- miss effort, with in-pump payment creating an even wider divide between outside and in. But as pump and mobile technologies begin to integrate with business intelligence and loyalty, marketing solutions are making these touch points come alive, reaching beyond the forecourt to passing motorists and even people at their home computers.
Honolulu retailer Keith Yoshida sees social media and mobile applications as a logical extension of forecourt marketing. “Today you have computers in phones and tablets,” says Yoshida, vice president of business development for Mid Pac Petroleum. “The computer is going to become something that people carry around with them wherever they go, and that is going to be the way marketers or retailers are going to engage and communicate with them. If [retailers] are not on a platform, they’re not going to be top of mind or competing.”
Evolving Pumps
In a video age, the use of TV at the pump seems a natural evolution. But while the screens have been common on trade-show floors for more than a decade, the industry has yet to see widespread adoption.
Barriers are twofold: cost and content, according to Williams of Gilbarco. Though declining to discuss actual prices, he says retailers may perceive a large 10-inch screen to cost substantially more than a pump without a screen, or even one with a typical 5-inch video screen.
Those disparities are now changing. In Gilbarco’s case, a partnership with inpump TV network Outcast Media Inc., Santa Monica, Calif., has allowed for pricing of the larger screens to be “nominally” above the Gilbarco model line with smaller in-pump screens.
Melton of Quality Petroleum would agree. The pump already costs $15,000 to $20,000, he says, so the additional amount for the in-pump screen (which he declined to reveal) was not a concern.
The Gilbarco-Outcast partnership also has freed retailers from the issue of content, which Williams says was a formidable obstacle, even for those with the best intentions. “A Thanksgiving Day promotion may work in early November,” he says, “but when it’s still on the dispenser come May, it’s not helping the business.”
Overcoming these hurdles has its rewards, Williams says. In numerous tests using a set of control stores and stores equipped with in-pump TV, double-digit lifts resulted. A Gilbarco test using Gatorade resulted in a 19% spike. A similar test pumped up Hershey’s chocolate bar sales by 15%. In general, Outcast officials say their tests show lifts ranging from 10% to as high as 30%.
Similarly, Wayne, another pump maker, based in Austin, Texas, has partnered with New York-based Gas Station TV to create an in-dispenser audiovideo solution aimed at the fueling consumer. Demand, according to Wayne officials, is coming from all segments of the industry, from major chains to single-store operators.
“You’ve got a captive audience for three to five minutes,” says D.P. Rabalais, marketing communications leader for Wayne, a GE Energy business. “If they want to increase margin, they’ve got to promote premium fuels or car washes on the forecourt or get people into the store.”
Being relevant is critical, especially with regard to promotions, says Matthew Stoudt, CEO of Outcast. That’s why, he says, his company’s solution is “agnostic” when it comes to loyalty, capable of integrating with programs already in place. The ability to tie promotions to loyalty history as well as the retailer’s promotional calendar has been central to his company’s “one-to-one engagement” strategy.
And relevance can have multiple meanings. Outcast has built a content model that includes a retailer’s desired promotions, local and national news, entertainment and sports, and ads from major c-store suppliers.
Day-part messaging is part of the mix, with items such as coffee pushed in the morning, a hot dog in the afternoon and cold drinks at night. Promotions also can tie to weather. If it’s raining, for instance, an ad for windshield-wiper blades will appear.
Another promotion for cough-drop maker Halls linked content to area pollen count—with one message for a highpollen- count day and another for a low count. The campaign pulled upwards of 80% lift and has been nominated for an industry advertising award. “The more targeted the ad, the more effective the advertising,” Stoudt says.
In a larger sense, the turnkey combination of cost and managed content is what’s driving adoption, Williams of Gilbarco says: “That and the double-digit lifts.”
Creating Relevance
For some retailers, forecourt marketing is only a starting point for the larger idea of connecting with the customer. Providing relevant rewards, coupons and affinity messages all fall back to communicating based on purchase history. That trend is happening both outside and inside the store.
A large-scale effort along this line is occurring with Catalina, a St. Petersburg, Fla.-based coupon producer and distributor. By spring, the company will have tied its coupon-dispensing devices to customer purchase history at 600 sites, including more than 400 Circle K Midwest locations. It has a larger industry goal of 4,000 installations by the end of the year and a long-term goal of 40,000 stores.
Its business model is to install the printers free (other than a nominal setup fee) for the retailer at the checkout, where the device is tied to the pointof- sale (POS) register and has access to purchase-history information. The system prints out incentive messages but also is tied to available offers.
“The retailer gets the impact of the offers, such as increased trips, increased category sales and getting a platform that allows them to do loyalty,” says Darren Moss, vice president of c-stores for Catalina. “It’s like subsidizing a loyalty system that’s ready to go.”
Catalina is focusing its efforts on larger chain retailers, expanding on its strong roots in the food-drug-mass channels.
Beyond the Forecourt
For retailers in this channel, fuel is always relevant, with the use of fuel and its pricing a prime lure. And with mobile technology, the street postings are moving well past the forecourt. Today people use both mobile phones and personal computers to comparison-shop as well as locate lowprice gas stations while traveling.
“There’s a movement by consumers to use technology to comparison-shop for everything,” says Dustin Coupal of Open- Store by GasBuddy, a low-price website and mobile-services company based in Minneapolis. “They do it for CDs, textbooks, gasoline or just about anything. For some, price is first and foremost.”
For those retailers who make price a differentiator, mobile technology spreads the word. But Coupal says not all retailers want to rely on price. For those who want to put a broader emphasis on brand, reaching out to customers attuned to mobile searching can help them tie value-added propositions to their online messages, such as free coffee, a car wash or an “extra clean” location.
In the GasBuddy world, these messages are 20 characters or less and can appear on the GasBuddy site alongside retailers who price lower on fuel. But it allows retailers to compete on something other than fuel. GasBuddy also has helped retailers develop apps that provide a bounty of information about specific stores and specific promotions or specials.
“You have to help consumers avoid comparison shopping,” Coupal says. “You want them to embrace the brand and come back to it.”
For Yoshida of Mid Pac, being present in all forms of social media as well as online sites such as GasBuddy tie back to amassing a strong, loyal customer base. Messaging and offers the company has released link to getting customer info and building that database. Offers such as trips to Las Vegas have been working, he says, which brings up experimentation.
“Technology today allows us to capture the data with regard to offers and promotions and gives us the ability to measure effectiveness so we can tweak and change things up,” says Yoshida, whose company runs or supplies about 70 locations; many opt into the larger loyalty efforts. “We’re trying to enhance the relationship beyond just buying gas. We want to provide them something of added value, with the intent being to build loyalty.”
While not wanting to talk about specific promotions, he says success has ranged from so-so to “extremely impressive.” The rate of individuals opting out of Mid Pac’s app is small, which bodes well for the app’s perceived value. “On the phone, people have so many offers and apps,” he says. “It’s becoming extremely valuable space, and what they decide to keep and not keep is important. We hope to provide enough value to earn a space.”
Multiple Touch Points
In addition to outreach, tablet and smartphone touch-screen devices are expanding the number of on-site spots where the retailer can interact with the customer.
Walnut Creek, Calif.-based Passbox offers a game that customers can play while waiting to check out.
The game, in use by a large Northeast chain that Passbox declined to identify, entices customers with dramatic fuel discounts, which firsttime players win automatically. The game eliminates the hurdle of having people register for loyalty programs, says Patrick Probst, vice president of marketing for Passbox. People can be hesitant to reveal personal information such as a cellphone number, he says, but the game teases out the information by asking for it to initiate play.
To redeem the rewards, the customer has to go online. At that point, the retailer can ask for more information to tie rewards and other relevant promotions to the person’s purchase history.
“We’ve created a fun, engaging game that rewards people just for coming inside the store,” Probst says. One aspect of the 5- to 8-second game rewards customers for walking from the pumps to the store. “It’s dynamic and changing, so with every visit, you’re getting another goodness.”
Mobile Payment
When considering the growing number of on-site and mobile touch points, one of the most significant trends is the concept of a mobile wallet.
With cellphones equipped with radio-frequency readers, the ability of the POS to recognize and communicate with phones will expand, along with the potential to offer more value, according to Moss of Catalina, citing how several major cellphone manufacturers committed to the technology this past year.
Others see the movement bypassing the register and even the pump. “The pump stops being this platform where we hang screens or handle secured payments and turns into a pump again,” says Mike Finley, chief technology officer for hosted solutions for NCR, Duluth, Ga. “Everything else the consumer is doing goes into the phone: making a purchase, signing up for service, coupons, promotions. The mobile phone controls the pump like a POS, and it serves as ambassador for retailers.”
Finley says NCR is set to introduce such a solution to the industry in the coming weeks.
One problem that exists today is interchange fees, Finley says, which are higher for any transaction that doesn’t use a physical card. But as more players enter the game, especially “nontraditional vendors” such as PayPal and other online payment-service providers that don’t require bank accounts, the sooner mobile payment will become commonplace.
What mobile payment will do is eliminate the “friction between consumers and what they want,” he says.
On the potential of mobile payment, Stoudt of Outcast says in-pump TV will augment how the retailer communicates to people via cellphones. “They’re going to work hand in hand,” Stoudt says. “While the customer is making a mobile payment, the screen in the pump is a reminder of the different options in the store. It reinforces the message and becomes [cumulative].”
Don’t Count Out Signage
While full audio-video may be dramatic, some say don’t count out point-of-purchase (POP) signage. It’s what’s helping Shellbranded retailers communicate the oil company’s loyalty program. That effort began in 2009, when Houston-based Shell started its partnership with several of America’s largest grocers to leverage its rewards program.
In terms of signage, each Shellbranded station would receive up to 90 pieces of POP materials to promote the program, including pumptoppers, window clings, exterior banners and other instore signage. The signage had to contain market-specific messaging for each participating grocer and gas retailer, with the goal being awareness and education. The signage company, Houston-based Pointsmith, made and shipped the new POP signage well before the scheduled launch deadlines and worked in tandem with each of the participating grocers. Pointsmith also assisted with its strategic placement—a key element in engaging and building awareness, along with educating consumers about the program, officials say.
“It was important that we reach a wide audience with the launch of this program,” says Debbie Degeyter-Strange, brand and CVP implementer for Shell U.S. “As expected, our point-of-purchase advertising was one of the top contributors to the success of this program’s launch in 2010.”
Forecourt Metrics
The effect of forecourt marketing via in-pump TVs can be compelling, as suppliers such as Gilbarco and Outcast Media Inc. have found.
- 15% Lift on a chocolate-bar promotion
- 19% Lift on a sports-drink promotion
- 10% to 30% Range of lift on multiple products
- 80% Lift on cough drops tied to days of heavy pollen count
- $15,000 to $20,000 Pump cost, with in-pump TV adding a nominal expense
Sources: Gilbarco Veeder-Root, Outcast Media Inc.
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