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“Ex. Gas” No More? Is Fueling Up From an App the Final Frontier of eCommerce?

Nitin Sumangali |

No sector of the economy can be too comfortable in imagining that they are invulnerable from digital disruption. Consumers want the simplest purchase experience they’ve ever had to be the baseline for all their future purchases. Increasingly these simplest purchase experiences are coming from mobile apps.

Our colleague over at SpendingPulse, Sarah Quinlan, is always careful to cull out the gas consumers buy at the pump for certain of her metrics. After all, as Sarah will tell you, petroleum is fully 12 percent (let that sink in: more than 10 percent) of U.S. retail sales. Such a number affects metrics like eCommerce’s percentage of total sales, because filling up your car at the gas station has until now been considered resolutely (almost stubbornly) an analog pursuit. But what is Silicon Valley about if not shooting for the moon—trying to turn such a huge portion of U.S. consumer spending into an online purchase? The opportunity is truly enormous.

I’ve seen news about the startup WeFuel recently, but there have been other companies that are creating mobile based services that essentially “deliver” fuel to your car the way Seamless delivers food or Zappos delivers shoes. Some of these companies like WeFuel, Fuelme and Filld, focus on the gasoline delivery model—bringing gas to you in a fixed location. The founder of Filld compares the service to Amazon, simply cutting out the need to go to a physical store when the product can be delivered to you.

These delivery services charge you for the cost of the gasoline plus a delivery fee, $7 for Filld and $7.49 for WeFuel. From this, and the fact that companies like Filld and WeFuel are really only serving Silicon Valley, it’s clear that the pitch here is about saving time and not money. It’s a convenience play, not a value play, which could only work in a depressed energy market like this one.

Gas stations typically compete with each other on price and are therefore very watchful of any efficiencies they can exploit. These delivery systems had better be incredibly convenient in order to displace the corner Shell station for those consumers who can’t afford to pay more just to avoid a trip to the pump.

These startups are already looking for ways to take their product to these more price-sensitive consumers. WeFuel mentions partnering with rental car businesses so that consumers can fill up their car while it sits in a parking lot and avoid the fees of returning a car with an empty tank. Companies may even consider having a WeFuel or Filld truck come to their office and fill up employees’ tanks, offering it as a perk.

Retailers of all types should be thinking this way and looking for ways to ruthlessly simplify. If they don’t, a few taps on the screen may cut them out altogether.

Topics: Big Data, Credit, Payments Strategy, Retail Trends

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