NEW DATA: Gas Apps And The $22B Opportunity For C-Stores

About 48.5 million Americans will be hitting the road this week for the Thanksgiving holiday, according to AAA. A fair share will be stopping at gas stations to refuel their tanks, and roughly half of these consumers will be using mobile apps to find the cheapest gas and get directions to the station.

Of course, no road trip is complete without snacks and refreshments. For these types of purchases, mobile apps are once again being put to use. New research from PYMNTS, presented in the Paying At The Pump Report: Driving Gas Pump Payments To The C-Store, a GasBuddy collaboration, finds consumers who use a mobile app during their gas run are much more likely to continue shopping inside the station’s convenience store (c-store).

These travelers present a lucrative opportunity for the convenience stores that sell gas. By offering a mobile app experience that delivers the convenience that consumers have come to expect, c-store owners could boost revenues by roughly $22 billion from additional sales.

The opportunity for c-stores to reap additional revenues is not limited to holiday weekends or times of heavy travel, either — customers who buy gas also make 5.2 million purchases at gas stations each year.

For the report, PYMNTS surveyed 10,049 consumers regarding their gas-buying and c-store shopping habits, and found that the right mobile app experience could shift revenues into overdrive. Only a small fraction of consumers (4.5 percent) who use gas apps also use them to pay for gas. But among these consumers, nearly three quarters (73 percent) said they are likely to shop at the nearby c-store when they buy gas.

As for paying for c-store products, these consumers want both consistency and convenience. Nearly four-fifths of consumers (83 percent) want to use apps to pay for their c-store purchases, the same way they pay for their gas.

Bridge Millennials, a highly influential group of consumer bellwethers, agree that convenience is key for mobile app adoption. These consumers skew younger and tend to earn more money and are more tech-savvy than their peers. They also buy gas more frequently, as often as once per week or even once per day. What’s more, half (52 percent) buy additional items from a c-store when making their purchases. The report includes a Deep Dive into how Bridge Millennials are using mobile apps and outlines the experiences that could accelerate adoption among this group.

Some Key Takeaways From the Report:

  • 68 percent of adults who pay for gas with a mobile app buy it as often as once per week
  • 73 percent of users who pay for gas with a mobile app said they are more likely to visit the store again if the app experience is convenient
  • More than half (57 percent) of consumers who pay for gas using a mobile app said they would do so more often if they could use the app to pay for c-store products
  • 85 percent of Bridge Millennials said receiving discounts is the most important feature of a gas app

C-stores Seek Their Own ‘Starbucks Effect’
There are roughly 122,000 convenience stores nationwide that sell 80 percent of the gas sold in the U.S. As these businesses look for opportunities to entice more consumers into their stores, some are finding inspiration by looking outside the c-store business model to major coffee chains like Starbucks and Dunkin’ Donuts, which have been very successful in their mobile app adoption strategies. The Paying at the Pump Report includes interviews with Amy Murphy-St Laurent, loyalty manager for New England-based gas station and c-store chain Alltown, and Jeff Lenard, vice president of strategic industry initiatives for the National Association of Convenience Stores, on how coffee chains can inform an effective mobile app strategy.

To read the story and find the latest insights, download the report.