If you have been operating in the fuel industry in recent years, chances are that you would have received numerous ‘lectures’ about the challenges of technological disruption (e.g. electric vehicles) and the need for fuel industry participants to ‘embrace change’.
In fact, the theme of embracing change has been a central theme of most industry conferences – including the Asia Pacific Fuel Industry Forum – for nearly a decade and the theme has been used so much that many have turned off to this message.
And who could blame them? The supposed major threat to our industry (i.e. the wholesale market adoption of electric vehicles) remains an ‘emerging threat’ only even though these vehicles entered the Australian vehicle market more than 15 years ago.
In an address to the New Sunrise Group’s annual industry conference in San Francisco, ACAPMA CEO Mark McKenzie provided some details on the current rate of adoption of electric vehicles in Australia.
“Advocates of electric vehicles point to the fact that sales of fully electric vehicles in Australia ‘tripled over the last 12 months’ but what they neatly choose to omit is the fact is that this means that sales of new electric vehicles increased from 0.1% of all vehicle sales to 0.3% of all vehicle sales”, said ACAPMA CEO Mark McKenzie.
“Further, this increase follows a significant decline in electric vehicle sales in 2016 and 2017 with electric vehicles (EV’s) and Plug-in Electric Vehicles (PHEV’s) accounting for just 6,000 of the 7.05M new vehicles sold in Australia over the last 6 years”, Mark added
Mark went on to suggest that, except for one notable player in BP Australia, much of the petrol-convenience industry was singularly focussed on the threat posed to fuel volumes by electric vehicles at the cost of missing significant commercial opportunities in the Share Economy.
“Given that the New Sunrise Conference was held in San Francisco – the capital of the Share Economy – it seemed an appropriate place to emphasise the fact that our industry was missing opportunities arising from the emergence of this new economic paradigm”, said Mark.
The Share Economy describes an economy that is dominated by people sharing products and services – as opposed to buying them. Examples of Share Economy businesses include Uber, Uber Eats, Airbnb, Go-Get (Car sharing), Scoot (motorbike sharing) and various city share schemes for bicycle hire.
Unlike electric vehicles, the Share Economy is transforming consumer behaviours on a large scale now.
“All it takes is someone to develop a sharing platform (e.g. a mobile phone application) and these schemes can go from infancy to full scale market adoption in a few short years”, said Mark
For the most part, the eyes of Australia’s petrol-convenience industry appear to be elsewhere and we do not appear to have seized what appear to be genuine opportunities to capitalise on aspects of the share economy.
“One notable exception is BP Australia, who have partnered with Uber Eats to provide consumers with an opportunity to have convenience and comfort products delivered to their door”, added Mark.
But obvious misses include opportunities created by UBER and car share.
“In the case of Uber, we have a whole network of drivers now who are earning a living by being on the road constantly and there would be an opportunity to create facilities for these drivers – such as crib rooms – where they can relax, grab a coffee and a snack at special prices in much the same way that our industry used to accommodate taxi drivers”, said Mark
Another obvious opportunity relates to car share programmes like Go Get.
“With more than 7100 sites strategically positioned around local communities across Australia, there would appear to be an opportunity for our industry to house car share vehicles and capitalise on the footfall that these sorts of businesses deliver in terms of convenience and impulse purchases”, said Mark
Working more closely with Share Economy enterprises like Go Get potentially creates an opportunity to increase convenience store footfall and develop new revenue streams (e.g. in terms of vehicle cleaning and maintenance)
In summary, the Share Economy is throwing up new opportunities for our industry that remain largely unrealised due to a disproportionate focus on the coming of electric vehicle technology and the desire to carve a compelling convenience proposition – alongside every other retailer in the country.
“Exploring how we might take advantage of these ‘here and now’ opportunities is deserving of further thought”, concluded Mark