LONDON -- With transportation and fueling infrastructure poised to transform fueling, Royal Dutch Shell could fight the inevitable, or it could join the revolution. It's choosing the latter, Istvan Kapitany, executive vice president of retail, told CSP Fuels.
London-based Royal Dutch Shell has 14,000 branded locations in the United States, operated and/or owned by wholesalers and dealers, making the U.S. its largest branded market, with Brazil as a distant second. Those sites are set to benefit from the learnings of several pilots underway in some of the 80 countries Shell operates in around the world, including everything from alternative fuels to on-demand fueling.
It’s a flurry of experimentation aimed to fill in the contours and detail of the fueling station of the future, where legacy offers such as gasoline join modern conveniences, such as an electric-vehicle (EV) charging station.
“One thing is absolutely sure: For a matter of time, there will be a co-existence of fossil fuels and renewable energy, because it’s just impossible for a leap from one to another energy source to take place,” said Kapitany. “But you really need to start to make progress; you need to be part of that process.”
Here are five areas where Shell is attempting to disrupt itself ...
1. Alternative fuels
Shell has been testing alternative fuels for some time. It opened the first hydrogen fueling sites in the United States several years ago in California. More recently, it partnered with Toyota, manufacturer of the hydrogen-powered Mirai fuel-cell electric vehicle, to open seven more locations. It also has five liquefied natural gas (LNG) fueling stations in the United States.
In Germany, Shell is a partner in the H2 Mobility joint venture, which aims to install around 400 hydrogen refueling sites around the country by 2023.
It is also beginning to test the potential of electric-vehicle fueling. By the end of 2017, Shell plans to have 10 fast-charging stations at its fueling sites in the United Kingdom, and it is planning to test them in the Netherlands, Russia, Norway and Spain, among other countries.
Making these alternative fuels price-competitive with fossil fuels, and the infrastructure and pricing model fully scalable, is key, Kapitany said.
“We try to get into a position where it’s a good value proposition for consumers to buy a fuel-cell car, which is driving them from A to B,” he said. “It would be very difficult to assume that people would switch to something that is significantly more expensive."
2. Mobile payment
Making the fueling transaction faster and easier is a continuing goal for Shell. Its Motorist app allows customers to find the closest Shell station and pay for fuel through their smartphone.
Now Shell is taking the next step and integrating payment from the vehicle itself. In the United Kingdom, it has partnered with Land Rover and Jaguar on the ability to prepay for fuel while staying behind the wheel. Drivers pull up to their local Shell station and use an app on the car’s touchscreen to select the type and quantity of fuel, and pay through PayPal, Apple Pay or Android Pay.
3. On-demand fueling
For consumers who want to dictate when and where their car fills up, Shell is piloting Shell TapUp, an on-demand fueling service that debuted in June 2017 in Rotterdam, Netherlands. Customers order a fill-up through the Shell TapUp app, requesting the type and amount of fuel and specifying the time and location of delivery. Deliveries take place between 1 p.m. and 8 p.m. Shell charges the average of gasoline prices in the area, with a delivery fee around $5.
TapUp leverages Shell’s mobile technology alongside its foundational capabilities. “We are very, very good in supplying fuels,” Kapitany said. “We developed a safe, secure environment. We certainly have the best people and product. And we have [trust in] the brand.”
Assuming TapUp is a success and Shell can make it scalable, there is no reason it could not work in the United States, he said.
4. Buy online, pick up in store
In the United States, retailers such as 7-Eleven have partnered with Amazon to offer pickup lockers for online purchases. Shell is testing a similar model in Europe in which customers can buy items online and pick up in the store.
“We do have different tests running in Germany with Amazon, and we also do programs in Hungary with DHL, where they are using service stations as pickup points,” said Kapitany, noting the results are “very promising.”
5. Rethinking mobility
Offers such as the mobile-payment apps and Shell TapUp could eliminate the need to ever go inside the c-store. Others attempt to forge a better connection with the consumer. For example, in Turkey, Shell is testing a click-and-collect service where customers can preorder food on an app and pick it up at their local Shell station. An employee fills up a customer's car and then retrieves and delivers the order to the customer, who then pays by mobile app.
“One size does not fit all,” said Kapitany. “It’s about providing mobility and providing it in a way they want it. If they want it from a Shell forecourt, they can get it from a forecourt. Or if they want to go into the c-store, we provide them with great convenience stores. But if they want us to deliver … to their homes, we can now do this.”
For more on Shell’s efforts at disruption, watch for the September 2017 issue of CSP magazine.