It seems lately that electric vehicles (EVs) are garnering more headlines and hype. Should c-store operators fear they’ll lose gas customers to this new technology?
The NACS Show panelists taking up the topic during the “EVs: Shifting from Fuel Provider to Energy Provider” education session say they shouldn’t. But operators will have to do some legwork to capitalize on their longtime customer service and convenience strengths.
Longtime fuel industry veteran and president of eMotive Solutions Glen Stancil stressed that, to figure the costs of installing EV charging spaces, operators will have to do some math. Though it’s seen as a high-tech project, the numbers are crunched the same way – by balancing the costs against the benefits. And remember, fuel and power have different characteristics.
EV chargers have higher fixed operating cost compared to providing the equivalent fuel product. For fuel that figure is $30 per month; for EV charging that cost soars to $2,475 per month. Electric has a higher breakeven utilization rate and services fewer numbers of vehicles.
There are upsides, too. EV chargers offer a 77% higher gross margin and substantially longer visits by the fueling customer.
The challenge, according to Stancil, is the fixed operating costs. Those operating costs, though, can be defrayed by industry grants. “The grants aren’t typically covering operating costs,” Stancil said, “but there are (grants) for capital costs.”
EVs and Smart Buildings
Karl Doenges is a consultant with FSG Smart Buildings, a building automation contractor. He calls EV charging the backbone of smart buildings.
EV charging can drive sales for c-stores. It increases in-store dwell time of those customers.
“You have to think about this in a holistic fashion,” Doenges said. “You’ll need a QSR or coffee or something to keep them in store.”
It’ll also teach you about your customers – what they’re buying, how often and what times of day. Doenges said that the shared infrastructure of the EV charging and smart building technology can help you gather that data and use it to increase their baskets purchases.
It’s all done through the Internet of Things (IoT), which is a group of small devices placed throughout a store that talk to each other about anything from cooler temperatures to empty shelves.
Beacon technology will let you offer promos via handheld device. Heat mapping will help you discover shopping patterns as well as signaling that you need to open another register. Customer dwell times will help you shape menu offerings and dining capacities. Artificial intelligence will adjust store temperature and update stock needs.
“You’re getting a lot of alarms and alerts from these IoT sensors,” Doenges, “but you’re getting a lot of efficiencies, too, so it’s worth it.”
He told the retailer audience that a store doesn’t necessarily need to install everything needed for hosting EV chargers, but to build in the infrastructure for it now. He also recommends prepping for smart technology at the same time.
“You’re really killing two birds with one stone if you attack these together,” Doenges said. He advised that retailers can simply start with some of the primary tasks needed, like selecting the eventual location of the charging stations and technology upgrades for smart devices. Things like installing empty conduit that will eventually house cables can be done ahead of time and utilized as innovation advances.
“To retrofit it later is a whole different thing,” said Doenges. “You’ve got to cut through the concrete and that adds significantly to your costs.”
Still, the key to making EV charging service pay is exploiting what Stancil called economic levers. Among those, retailers must convert long stay times into more sales of higher margins, maximize as much outside help in the form of grants as possible and partner with networks looking to expand.
While the panel acknowledged that some retailers and QSRs outside of the c-store realm like WalMart and McDonald’s have expressed interest in offering EV charging services, they stressed that c-stores have an advantage because they’re already providing energy to vehicles.
“The key is to move quickly to preserve the relationships you have,” said Stancil. “Because you’ve got the great real estate and it certainly gives you the advantage.”