Wi-Fi (Wireless Fidelity) technology has been available for a number of years and has been particularly successful in coffee shops such as Starbucks, fast-food outlets, and airport waiting lounges. Within the last few months, it has also been seen on more and more forecourt sites.
Wi-Fi allows customers to access the Internet remotely. Success off the forecourt has been mainly for businesses making more effective use of their space, charging customers who would be sitting there anyway for the pleasure of being able to access the Internet. However, even with the recent introduction of Wi-Fi by companies such as ChevronTexaco, many fuel retailers are still in a quandary as to the benefit of introducing Wi-Fi technology on more than a limited number of forecourt sites, as it is better suited to shops and waiting areas, not forecourts where space and waiting times are limited.
Datamonitor research found that 79% of executives believe only 1-5% of forecourt sites will offer Wi-Fi access in 2004. This figure changes significantly by 2007, with only 32% believing this will still be the case, and 47% indicating that the percentage of fully Wi-Fi integrated sites will be at least 6-10%, if not higher.
However, with increased competition on the forecourt from grocery multiples, which have successfully entered the market since 2000, fuel retailers who have not yet amended their strategies to encompass a convenience offering are having to consider alternative options to remain competitive.
Technology to make life simpler for the on-the-go customer is one credible option. Automated payment solutions and the availability of Wi-Fi seek to aid customer satisfaction, and are often used to entice customers less interested in the c-store offering. Wi-Fi is used in this case more as an additional customer service tool rather than to aid flagging revenues, or to increase them dramatically.
Restrictions companies have encountered so far
In partnership with T-Mobile, ChevronTexaco’s recent introduction of Wi-Fi technology on 100 of its sites located on major roads in the UK is certainly a feasible strategy, yet with restrictions in both mobile usage and the number of customers demanding the technology, roll out across further sites would be ill advised. ChevronTexaco estimates that there are three to five million business travellers on the roads every day, and its aim is to offer the option to ‘buy time’ in blocks of 15 minutes, or ‘bundled’ time periods of up to 24 hours.
Despite Wi-Fi’s potential as an additional customer service tool, ChevronTexaco’s current overall offering is not aimed at the high-value business customer. Additional revenues generated by these customers through Wi-Fi use would not generate a sufficient ROI for the typical ChevronTexaco site, hence rolling it out across all sites would not be advisable.
Innovations in payment solutions have proven successful for ChevronTexaco so far, with technology allowing automated transactions to at least maintain, if not increase, revenues while at the same time improving customer satisfaction. Wi-Fi technology as a customer service tool for business clients is certainly advisable, but only at carefully selected locations, and has the potential to be profitable across other developed markets globally.
Statoil has also teamed up with BitBuzz, a small telecoms company, and is intending to introduce Wi-Fi access in 200 of its stations in Ireland from 2005, charging a set fee of between E3 to E6 for half an hour of Internet access.
Potential for the short- and medium-term
Offering Internet access via Wi-Fi as a customer service tool is important to attract business customers travelling long distances, particularly salespeople and those working for commercial road transport companies. Dependent on the market and location, Wi-Fi has the potential to at least increase customer satisfaction, if not fuel retailers’ revenues, thus aiding customer loyalty in an environment where customers are particularly disloyal.
Payment using Wi-Fi technology is, however, another story. The main problems with this type of payment are space, security issues (both in terms of fire hazards and fraud), lack of advanced technology currently available, the need for heavy investment with little return, and legal restrictions.
Security is the greatest concern, and banks are hesitant to accept purchases made in this way, as wireless payment is much more susceptible to fraud. Current technology is also a great restricting factor in the short-term, as either it does not comply with regulations specific to the forecourt, or not enough customers have access to the more advanced systems compatible with these types of payment.
In the short-term, heavy investment is needed for Wi-Fi to become a viable option, and for most fuel retailers, usage is restricted to only certain types of forecourt, mainly on arterial roads. Most are hesitant to lead the way, and it will take a few ‘brave souls’ to make their mark before others are convinced of the benefits.
