Touchless payment — accelerated by the COVID-19 pandemic — seems destined to become the future standard. Pilot Co. offers big rig drivers the option to activate the pump with a mobile device. Sam’s Club announced last week it’s bringing digital fuel payment to 518 stations. 7-Eleven allows consumers to use an app for shopping and delivery.
For smaller c-store chains, though, getting in on the digital payment arena can be difficult. Yet, it’s essential if a banner wants to stay competitive.
“It’s an initiative we’ve been interested in and looking at over the past year and a half,” said Fuel City President Joseph Bickham of digital payments. Bickham’s seven convenience stores in the Dallas-Ft. Worth Metroplex offer retail, fuel, extensive foodservice and car washes. “We had trouble finding the right fit of a (digital payment) developer or a product that was out of the box because we don’t want it to only serve one or two of our departments.”
Bickham added that Fuel City needed to strike a balance between finding a developer with enough expertise to handle his chain’s needs while not requiring a lot of upfront capital customization “because it is all custom where we can’t afford to pay what a chain of 30 or 40 would.”
Finding the right development partner is crucial, according to Tim Sloane, vice president of payments innovation for Mercator Advisory Group, a global payments consultant. The developer is already set up to integrate a chain’s products into the digital payment, mobile app or gift card framework. But the chain has to do enough sales to justify the effort.
“You need to have a fairly good size and volume to be able to make it valuable enough for either the distributor or the c-store owner themselves to produce cards that can be used for incentives tied to gas purchases and the like,” Sloane explained.
Soon, Fuel City expects to finally have that fully functional app that will allow fuel and car wash customers to pay from inside their vehicles, handle rewards and digital payments, and purchase digital gift cards.
Not Your Typical Gift Card
And just in time, too.
According to the “2020 Multinational Branded Pay” report by global branded prepaid card consultant Blackhawk Network, 52% of shoppers across eight nations have received a digital gift card — and just as many are purchased for self-use as for gifting to others.
Consumers purchasing for themselves, according to the report, do it to treat themselves, make an online purchase or take advantage of a discount or promotion. As much as it’s a gift option, it’s also become a financial tool. Like so many other digital pay options, the COVID-19 pandemic looks to be accelerating its use.
The “2020 Multinational Branded Pay” report found that, in the U.S., four in 10 shoppers are using their mobile phone and/or an app to shop online. The report also found that 55% of shoppers make purchases with a digital wallet. Pre-pandemic, that figure was less than 38%.
This pandemic-driven preference for gift cards is reflected in a recent survey from Rise.ai, an artificial intelligence-driven customer re-engagement solutions company, which found that gift card purchases in the second quarter of 2020 saw a 100.74% growth compared to the same quarter last year, dwarfing Q1’s meager 5.11% bump.
That may have been driven by a rising trend in gift card sales beginning in March, spiking in May as social distancing escalated due to the pandemic, and continuing into June, according the Rise.ai data.
Scaled Down Options
For smaller c-store chains that don’t use proprietary digital payments, proprietary gift cards offer an option that’s convenient for patrons and beneficial for the stores, as well. And the more options presented to the consumer, the better.
“The PRIDE Stores offers its own gift cards branded with The PRIDE logo,” said The PRIDE Stores Director of Merchandising and Loyalty Nicollette Jaeger. “They come in two denominations, $25 and $50.”
The PRIDE gift cards help the 15-store Chicagoland area chain build brand awareness, retain loyal customers and gain new customers, Jaeger added. Plus, the cards are accepted at more than the c-store counter.
“PRIDE gift cards can be redeemed at any The PRIDE Store, The PRIDE Beer & Wine Plus Spirits Store, affiliated restaurants such as Urban Counter and Taco Urbano, and 93 Octane Brewery,” she said.
That versatility makes for high value whether giving as a gift or keeping for personal use. It also makes for a useful budgeting tool for fuel consumers while encouraging loyalty to pumps in The PRIDE Stores’ forecourt.
Technology Closing the Gap
Digital or physical, the gift card phenomenon isn’t going away. The “2020 Multinational Branded Pay” report found that U.S. consumers are “among the world’s most engaged users of both physical and digital gift cards. More than any other country, surveyed Americans are most likely to have purchased or received physical and digital gift cards.”
Sloane advised that as technology improves, it’ll be easier to generate a mobile app that can process UPC information, barcodes or QR codes. “It could be, in the near future, more possible for those smaller c-stores to implement something using that technology,” he said. “But again, they’re going to want a partner that can bring it to them.”
As technology races forward, it may not be very long before digital payment capability filters down to the smallest of c-store chains.