RESEARCH REPORT
Reinvention at your convenience
Four key trends accelerating new growth opportunities for the fuels retail and convenience industry
5-MINUTE READ
September 25, 2024
In brief
- Accelerated disruption continues to force reinvention in the fuels retail and convenience industry.
- Organizations who harness the power of data, technology and AI are reinventing the role fuels retail and convenience plays.
- Our global pulse survey reveals four key trends shaping the industry and priorities to build resiliency and accelerate new growth opportunities.
Refueling for reinvention
Soon, many fuel retail stations won’t primarily be places to refuel. Working within the limits of their space, some will transform into dynamic, multi-service hubs that cater to a broad spectrum of consumer needs. Others will hyper-localize, offering goods and services tailored to the preferences of the local community. In both situations, consumers will start to think about these stores differently, stopping for the experience even if they’re not fueling up.
In July through September 2024, we surveyed and conducted interviews with 80+ clients, ecosystem partners and industry experts to explore the challenges the industry faces and identify key priorities to accelerate new growth opportunities.
Our global pulse survey reveals four key trends that are rapidly reshaping the industry. These trends highlight a clear message: the strategies that worked in the past 10–20 years won't work over the next decade. The industry needs to reinvent itself to stay relevant as the market shifts toward sustainable energy and evolving consumer expectations.
65%
of respondents believe that extraordinary consumer service and experience will give them the competitive advantage in the next five years.
96%
of fuels retail executives believe Gen AI will moderately or significantly disrupt the industry.
65%
of respondents indicate that 40-79% of stores are not adequately prepared to succeed in the next decade.
93%
of fuels retail businesses are upgrading two or more store technology components.
To be competitive in a fast-changing market, industry leadership will need to unlock new revenue streams— requiring them to reimagine the role of their convenience stores, expand their offerings and broaden their partnerships.
They will also need to take a more holistic approach to embracing technologies, such as generative AI (gen AI) that will power their reinvention and help them continue to evolve in a fast-changing landscape. It won’t be easy. Along the way, some retailers will embrace transformation while others will simply fall behind.
A majority of our respondents (65%) believe that extraordinary consumer service and experience will give them the competitive advantage in the next five years. And it’s telling that respondents are more worried about shifting consumer behaviors, technology, operating costs and competitors than they are about the declining demand for traditional fuel. (See Figure 1.) Fortunately, the trends themselves suggest the path to unlocking greater value — now and in the future.
Four major trends
Accelerating and coalescing to reshape this industry
As fuel sales decline while consumer habits and expectations shift, convenience stores need to find and tap new revenue streams that push them well beyond their traditional comfort zones.
As competitive noise reaches new levels, a seamless omnichannel experience that shows consumers that they’re known and valued can help differentiate the brand.
To keep up with customer wants and needs, business leaders can reimagine the role of convenience by leveraging partnerships, reinventing store and property formats and connecting with consumers.
The more agile the business can become by drawing on the power of advanced technologies, the better able it will be to pull ahead of competitors.
Ready for reinvention?
Disruption is here to stay and industry leaders need to act decisively and swiftly to help their businesses set the course for future growth. Reinvention is not just about remaining relevant; it’s about creating a future where fuel and convenience retailers can thrive in an increasingly dynamic market landscape.
To remain competitive, it is imperative to strengthen consumer connectivity and streamline operations – leveraging the power of your data to unlock the next chapter of growth. Retailers must rethink their offerings in order to access new value pools – and ultimately win the consumer of the future. With traditional fuel demand declining, developing a robust strategy for both the near and long-term is essential.
Those who take bold, proactive steps today will unlock new revenue streams, gain the loyalty of the next generation consumer, and pivot their business into a new era of mobility and convenience. The rest will find themselves playing catch-up in a landscape that’s quickly pivoting. The opportunity to lead is clear—and the need to reinvent is urgent. It’s time to accelerate change.
Brian Gray / Managing Director, Fuels & Convenience Retail Global Lead