Data Drivers

Mobile Apps And Gas: The Brand/Aggregator Brand Conundrum

America, it has often been said, is a car culture. Perhaps because the first consumer automobiles rolled off Henry Ford’s assembly lines. Perhaps because, in 1956, the federal government under Dwight D. Eisenhower allotted $26 billion to build the interstate highway system. Perhaps Americans just like riding along in their automobiles, their significant other beside them at the wheel.

Whatever the reason, that observation is hard to argue since, collectively, consumers in the U.S. spend $1 billion per day buying gas.

That culture of drivers is out on the road in force this summer, according to GasBuddy CEO Sarah McCrary. That’s despite gas being $0.55 per gallon higher than this time last year, McCrary told Karen Webster in this week’s edition of the Data Drivers podcast. However, looking at the data for the several million consumers who have the GasBuddy app (with its database of more than 150,000 gas stations), those drivers are scouting for gas stations with the best price per gallon.

The higher gas price, McCrary told Webster, has not put a damper on summertime enthusiasm for the great American road trip, though it has absolutely meant that customers have been very motivated to find the best price per gallon out there.

“The increase in price has not diminished interest — we are seeing customers driving the same number of miles, but they are definitely looking for ways to keep saving,” she said.

McCrary noted that consumers are looking for ways to manage price volatility. They are less concerned with the price per gallon itself — high or low — than they are with how the price per gallon is shifting. No one wants to be the person who paid the highest price for gas that day or week. As a result, drivers are increasingly using their mobile phones to not only find the best prices for gas at the most convenient stations, but to find new forms of consumer convenience that goes well beyond bargain hunting alone.

What Customers Want Today

Roughly 50 percent of U.S. consumers use a mobile app to assist with their purchase of gas. That’s according to a new study of 10,000 consumers on their use of mobile apps and paying at the pump. That study, the Paying At the Pump Report, paints a clear picture of what consumers really care about when it comes to mobile apps and buying gas, and what rarely crosses their minds at all.

By the numbers, consumers’ top priorities when using mobile apps at the gas pump come down to cost, convenience, checkout speed and loyalty rewards. More specifically, they value mobile apps that can help them find the best prices (51.6 percent), give them directions to the nearest gas station (35.5 percent) and help get them discounts on their gas pump purchases (23 percent).

More than half (57.4 percent) of the respondents said that saving money is the main reason they use a mobile app when shopping for gas. The only thing that wasn’t price-related in the top five priority issues for drivers was the group of consumers who stated a preference for apps that could provide them with directions to the nearest gas station — with the best prices.

Mobile payments — the ability to pay for gas using an app? Not terribly important to customers. Only 5.6 percent of those surveyed noted it as a priority, with nearly half (47 percent) of consumers being unaware that they could use an app at all to pay for gas.

“People have been pulling up to a pump and using a card for a long time,” McCrary told Webster. “It is a very hardwired behavior. Consumers don’t tend to really connect much value to that as of yet, unless it shows up on their radar as a pricing or convenience benefit.”

That can change, she noted. Recent work that GasBuddy has done with one of its partner chains — with a “slow rollout” of mobile payment options through the GasBuddy app — has demonstrated that consumers will give mobile payments at the pump a chance once they discover it. The challenge, McCrary said, is getting consumers to discover it — and, more importantly, finding ways for consumers to discover it without necessarily relying on a pricing discount, despite the effectiveness of such discounting in the gas business.

“The problem with loyalty to price is that it isn’t the same thing as loyalty to brand,” McCrary noted — and because gasoline is such a commodity good for consumers, it is hard to build brand loyalty.

However, McCrary noted, the power of a mobile platform is to give gas sellers the options to try out different operating styles, and perhaps to form different types of connections with their customers.

What Consumers Will Want

While the data clearly notes the importance of price to consumers, it also points to the fact that those same customers are thinking, at least a bit, about the experience they will have at the gas station, beyond filling up. About 61 percent of current mobile app users said they would use apps more often if they could search for amenities in the convenience stores attached to the gas stations.

McCrary noted that examples of those modes are popping up all over the industry. Brands are improving their food services, renovating bathrooms, expanding their shop offerings and expanding their mobile payment options.

“They are thinking more about once the customer is there for the gas, how to bring them inside to find out what else is great about the place. It has great coffee or they make great food, or the bathrooms are incredibly clean. These are the types of things that appear in reviews, and customers do care about that,” she said.

That is something GasBuddy can see in its aggregated data on gas station foot traffic throughout the U.S. and Canada. Stations that boast strong amenities — and have strong reviews that make them a known commodity to other drivers — see more customers and make more sales.

“This might not be showing up in consumer surveys yet,” McCrary told Webster, “but we can absolutely see it in the traffic patterns.”

What’s Next

As with most things in technology, industry reactions to the idea of using mobile as a tool to strengthen consumer relationships include some mixed opinions. Some firms are eager to adopt, wanting to be on the front-facing edge of a new technology. Others are not — they are confident that they have a good location, they are happy with the amount of business they are getting, and they don’t think mobile will really add much to their bottom line.

In those cases, McCrary noted, many will talk about the power of data to unlock a customer base, and the others will become aware of all the things they never realized that they didn’t know.

“Often, gas stations think they are doing great until they can see the data of the other stations in their area, and see that they are actually losing out on a lot of opportunities they didn’t know were there,” she explained.

Still, for all of the promise and potential of mobile, gas and convenience store purchases, firms have questions about whether the best path forward involves a branded app of their own or one like GasBuddy, an aggregator of brands for consumers to choose based on their needs and preferences. McCrary said it shouldn’t be an either/or conversation, but rather a both/and question. Station operators can use their own apps to engage with their loyal customers, and use aggregators as additional distribution channels — no different from hotel and airline brands using travel aggregators, such as Expedia.

As McCrary noted, selling gas shouldn’t ever only be about a race to become the lowest-priced provider, but a race to engage directly with consumers and give them a consistent reason to choose one brand, instead of searching the apps each morning to figure out which stations are charging two cents less than the others.

“There is a lot of unexplored potential here,” McCrary said. “These are the early days of gas station operators and brands, really — who are thinking very differently about how to tap into the huge opportunity that using mobile to pay at the pump, and beyond, offers.”

TRENDING RIGHT NOW

To Top