Innovate – but not now!

International Journal of Productivity and Performance Management

ISSN: 1741-0401

Article publication date: 1 October 2004



(2004), "Innovate – but not now!", International Journal of Productivity and Performance Management, Vol. 53 No. 7.



Emerald Group Publishing Limited

Copyright © 2004, Emerald Group Publishing Limited

Innovate – but not now!

Globally, almost 30 per cent of petrol forecourts offer automated payment systems, and in certain markets 90-100 per cent of sites operate at least one outdoor payment terminal (OPT). With fuel retailers primary objectives being to protect market share, attract more customers and increase site efficiency, “self service” can contribute to boosting throughput by up to 25 per cent and reduce operating costs, allowing fuel retailers to remain competitive in the face of increased fuel prices. However, a new report by independent market analyst, Datamonitor argues that forecourt retailers should instead focus their attention on traditional automated payment solutions such as pay-at-the-pump, standalone outdoor payment terminals or RFID transponders, rather than other “innovative” alternatives.

Implementation of in-store self-checkout on the forecourt is ill advised.

In supermarkets where space is less limited, self-scanners and store navigators can be attached to shopping trolleys and are then “docked” at the checkout for payment. This ensures less congestion at the till. However, when it comes to convenience retailers on the forecourt the story is different. In Datamonitor’s view, these options have as yet, very limited potential. The average customer visiting a convenience retail outlet on the forecourt spends only two-and-a-half minutes in the shop, and just 40 seconds in the queue. Space is very limited and there’s greater opportunity for fraud, as monitoring customers is more difficult. Little wonder that to date, most have only implemented trials. Datamonitor says technology needs to be improved, supply costs reduced and customers need to become more au fait with the concept before this group of convenience retailers is willing to invest.

The introduction of mobile payment on the forecourt should be reserved until adequate infrastructure has been established, and it is common for other transactions.

A major barrier exists with customers’ “fear” of using their mobile phones to make mobile payments. There’s a lack of trust in the technology and worry in terms of getting it wrong. Moreover, the majority of people do not own mobiles compatible with the mobile payment option at the moment for it to be seriously considered, and the credit risk attached is significant enough to cause banks and forecourt retailers to be more hesitant.

Pay-as-you-go customers would be excluded, or would have to pay up-front for large amounts of credit on their mobile phones, thus defeating the point of convenient mobile payment. Collectively, issues with banks, mobile phone companies, providers of the technology all work together to minimize the potential for further expansion of the mobile payment offering on the forecourt.

Similarly, wireless (Wi-Fi) technology should not be considered as a payment solution on the forecourt.

Given current limitations there is almost no potential for Wi-Fi beyond being offered in selected sites for a specified audience. Internet access via Wi-Fi should be used as a customer service offering on a limited number of sites on arterial roads, but Datamonitor does not recommend it as a payment method in the foreseeable future.

In the short-term heavy investment is needed for this to become a viable option, and for most fuel retailers, usage is restricted to only certain types of forecourt, mainly on arterial roads. Most are hesitant to lead the way, and it will take a few “brave souls” to make their mark before others are convinced of the benefits.

Christina See, oil analyst at Datamonitor, comments: “Forecourt retailers should focus their attention on traditional automated payment solutions rather than ‘innovative’ alternatives that are less suitable for forecourt implementation.”

Related articles