Gas Station Retail

Why Consumers Prefer Apps At Gas Stations

Hook convenience store (c-store) customers on a user-friendly mobile experience for fuel purchases, and the benefits will accumulate. That’s one of the main findings from new PYMNTS research, which found that of the consumers who have used mobile apps to buy gas, 73 percent are likely to shop at the facility’s convenience store. That’s not all — 82 percent of those consumers want a mobile app experience that will let them pay for c-store items.

That’s one of the main opportunities described in the “Paying At The Pump Report: What Drives Mobile Adoption,” new research from PYMNTS in collaboration with GasBuddy, which provides mobile and online commerce services for c-stores and gas stations. The report includes 200-plus data points, outlining the features and functions consumers value most when using mobile apps to pay at the gas pump.

However, that opportunity comes with a caveat.

While mobile apps are used by 49.4 percent of consumers for gas-related needs, such as locating the nearest gas station and finding out its hours of operation, that number drops drastically to 4.5 percent when it comes to using these apps to pay. Granted, that 4.5 percent is a demographic that tends to be younger (that is, very comfortable with mobile commerce and payments), is more likely to have college degrees and jobs, and has an average income of $67,000.

C-Store Obstacles

Normally, one would wonder what the obstacles are in getting the rest of the consumer population to use mobile apps to buy gas. When PYMNTS spoke with GasBuddy CTO Max Metral about the Paying at the Pump research, he flipped that question. “What obstacles are causing people to want to pay at the pump with mobile apps?” he asked. After all, when it comes to buying, there are relatively few “pain points” associated with the transaction.

One pain point — one reason or incentive that could drive more use of those apps — is price, he said. People rarely want to pay as much as something costs, and will not often turn down discounts, assuming they can be redeemed relatively easily. In the world of gas stations and c-stores, that translates into offering discounts on gas purchases — say, $.10 off a gallon of gas — in exchange for using the relevant mobile app. “The convenience angle is not enough,” Metral said.

That’s not to say convenience should be ignored. However, he explained how the “convenience angle can reach a tipping point” — and brought up Uber as an example, given how it made transportation payments so easy to handle that they almost seem invisible, at least at the conclusion of the ride. “It’s a smooth, meaningful payments experience,” he told PYMNTS.

Seamless Experiences

The PYMNTS-GasBuddy research identified a consumer demand for such a seamless experience, as it related to convenience store commerce.

The report found that 57 percent of consumers who pay for gas with mobile apps would visit gas stations more often if those apps could also pay for c-store products. Not to mention, c-stores are, in general, carrying better products these days than a generation ago, such as gourmet sandwiches, fresh fruit and fancier coffee, along with fresh meals to go. C-stores are being reinvented, as PYMNTS has discovered.

The report also pointed to convenience as a motivator — 73 percent of consumers who pay for gas with mobile apps said convenient purchasing experiences would increase their likelihood of visiting the convenience store. Other strong motivators include targeted coupons, personal data protection, rewards and loyalty credits, and price discounts.

It’s not like using mobile apps in the c-store space is alien to customers, either. For those consumers who use apps to buy gas, 57 percent also use apps to pay for quick-service restaurant (QSR), fast food and grocery purchases, in addition to 35 percent for hotels and 38 percent for household bills.

Onboarding Woes

Those mobile habits can likely help c-store operators that are interested in beefing up their own mobile commerce programs, assuming at least one other factor is satisfied. “Onboarding can be fairly cumbersome,” Metral said, arguing that consumers don’t necessarily want to sign up for multiple retail apps, which in turn promotes the case for merchant-agnostic apps.

A closer look at how much c-stores collect from consumers indicates how much revenue is at stake. According to the PYMNTS research, c-stores collect roughly $256 billion in sales each year from selling non-gas items. Of this amount, $36 billion comes from non-gas sales to all gas-buying customers.

Broken down even further, of that $36 billion, roughly $14 billion is made by customers who do not use apps in any way, while the remaining $22 billion is made by general gas app users. C-store owners can expand upon that $22 billion by delivering a convenient and engaging mobile app experience that encourages mobile-friendly users to pay for both their gas and c-store items with that app.

Mobile apps, the rise of connected vehicles, and the looming arrival of autonomous cars and trucks are all playing a role in c-store and gas station commerce developments. Operators that learn how to best appeal to digitally savvy consumers will likely gain an edge as all those changes unfold.

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Our data and analytics team has developed a number of creative methodologies and frameworks that measure and benchmark the innovation that’s reshaping the payments and commerce ecosystem. The PYMNTS Next-Gen AP Automation Tracker, is a monthly report that highlights the most recent accounts payable developments and automated solutions that are disrupting how businesses process invoices, track spending and earn rebates on transactions.

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