It is important for gas stations and convenience stores to adapt to the changing marketplace, which is now facing new technology, a shift in consumer behavior, and a growing mobile population. Challenges include restrictions from service providers, an increasing amount of payment structures without third parties, and the general complexity of overseeing face-to-face payments across various channels. The professionals at Lumicre are committed to staying up to date on industry trends and market conditions in the gas stations and convenience store sector. Read on to review 5 trends outlining current and upcoming transformations. 

EMV Mandates and Chargebacks

According to the U.S. Payments Forum release in 2019, EMV chip adoption is well established. 63% of in-store payment terminals have been chip-enabled, with chip-on-chip at 68% of total transactions. A significant drop is expected for traditional/fixed POS terminals in 2021 after a 37% current investment interest. With 55% of POS terminals being updated, the peak of the cycle is predicted to occur soon.

Convenience Store EMV implementation is ongoing and payment systems security will need to be prioritized by fuel and convenience store retailers. Chargebacks have been reported to have tripled since January 2011 with the introduction of the EMV pump mandate of April 2021. The addition of advanced fraud detection, transaction tokenization, and a multilayer system of P2P encryption can all help to improve payment security.

New Opportunities with Fuel Alternatives — Electric Vehicle Chargers 

It is no surprise that electric vehicles are growing in popularity; by 2030, 18.7 million EV’s are predicted to be on the road in the U.S.

This increasing number of consumers will need a convenient electric charging station for their cars. Convenience stores have a unique advantage here; as the time it takes to charge a vehicle is greater than the time to fuel a vehicle, convenience stores will draw in EV consumers and generate profit. Convenience stores must adapt to future changes such as alternative fuel types by developing engaging experiences for consumers that can withstand the evolving process. 

Digital Transformation — Changing Consumer Behavior

Aevi highlights the fact that nearly 40 million Americans stop to fill their vehicles up each day. The convenience store product variety, gas prices, and how consumers drive are all critical factors in which station they choose. 59% base their decision on state price while 44% will choose to go into the store. Many are driving more due to a longer commute for a job and are looking for easy stop, grab-and-go places; the quality of food, fuel, and employees heavily impacts where consumers shop. C-stores are now testing drone delivery and cashier-less stores, placing focus on frictionless, experiential retail. With the addition of payment methods such as contactless credit cards and app-based, consumers will want a secure, painless, and convenient experience.

Evolution of Revenue Streams — #Forecourt

It is clear that while fuel sales will continue to decline, retail from the continuously evolving range of products and services in the forecourt will gain dominance. Forecourts are now more than just the gas station- they are convenience stores that sell fuel. Payment systems must incorporate holistic commerce solutions for profit and revenue to grow.

A Shrinking but Consolidating Market 

This retail market is shifting; revenue is growing from consolidation while the number of physical stores is decreasing. That being said, fuel and convenience stores operate with more locations than any other brick-and-mortar retail and continue to produce over $500 billion in revenue. While it is true that more people are choosing to drive EVs (electric vehicles), this has not had an effect on the number of filling stations. As more EV charging points sprang up, the decline of stations eased off. 

Lumicre helps investors successfully secure their desired properties and expand their portfolios. Our expert staff has great experience successfully closing deals on all asset types and meeting our client’s unique needs. Contact us today to see how we can help close your next deal.