B2C Card Propositions in European Forecourt Retailing

This publication has been discontinued on July 19, 2011.

Introduction

Overview

Introduction

Fuel retailers continue to offer a range of cards for their private customers. As they have had to respond to card markets at different stages of maturity, propositions are very fragmented ranging from schemes that provide rebates, to multi-retailer loyalty programmes and co-branded credit cards. This brief examines the different types of customer cards available.

Scope

• Profiles of fuel retailer customer cards across 9 European markets, including data on fuel discounts and third party relationships.
• An overview of the levels of fuel discount offered and a discussion of how the necessity to offer fuel discounts varies between markets.
• Insight into how fuel retailer-affiliated card propositions with a large number of partners can increase the usefulness of the cards to customers.
• Examples of how fuel retailers have used cards to encourage customers to make higher value purchases.

Highlights

Most fuel retailer card propositions do not offer rebates on fuel; fuel retailers are more likely to allow points to be redeemed against shop products. However, some supermarkets and fuel retailers with smaller networks have been motivated to offer discounts on fuel. These range from less than 1% to 5%.

Fuel retailers should use their cards to encourage existing customers to make purchases that they otherwise would not have. Shell in the UK has been particularly innovative in this respect. It offers selected card holders double points on purchases of its premium fuel.

In markets that have a high usage of credit, it is advisable for fuel retailers to launch a co-branded credit card. One of the main benefits of a co-branded credit card is that the fuel retailer retains a proportion of the card revenues generated which in turn can be used to fund higher discounts on fuel.

Reasons to Purchase

• Gauge which features you should include in your card programme and how these should be tailored to different markets.
• Gain a view on how customer cards can be used to increase awareness and sales of non-fuel products, and encourage the purchase of premium fuels.
• Maximise the utility of your customer card for motorists by entering into the most appropriate multi-retailer scheme.

• DATAMONITOR VIEW
  • CATALYST
  • SUMMARY
  • SOURCE
• ANALYSIS
  • Fuel retailers do not have to offer regular fuel rebatesas part of their loyalty programs
    • The larger fuel retailers have generally chosen not tooffer rebates on fuel
    • There are a number of reasons behind fuel retailers' decisions to offer rebates on fuel
  • Multi-retailer loyalty schemes with a large number ofpartners increase the utility of fuel retailer-affiliated cards
    • There is much potential for companies that run syndicatedloyalty schemes to launch additional programs
    • Given the shortage of schemes, only large fuel retailershave been able to join a coalition loyalty program
    • Fuel retailers entering into an independent scheme shouldseek to create motorist-focused groupings
    • Fuel retailers in independent schemes have not takenadvantage of the potential partnerships with insurance companies andhotels
  • Loyalty schemes can be used by fuel retailers to increaseawareness and sales of their non-fuel products and encourage the purchaseof premium fuels
    • Fuel retailers differ significantly in how they enable theredemption of points on non-fuel items
    • Loyalty schemes should be used to up-sell to existingcustomers
    • Fuel retailers of all sizes can use loyalty schemes toimprove their brand image
  • In certain markets, fuel retailers should use co-brandedcredit cards to raise revenues and increase loyalty
    • Fuel retailers should seek to exploit consumers' growinguse of credit cards
    • Despite the higher revenues that can be generated fromco-branded credit cards, fuel retailers have yet to exploit this areafully
    • Fuel retailers wishing to launch a co-branded credit cardshould seek to partner with the most popular issuers
    • It is important for fuel retailers introducing aco-branded credit card to enter into one of the popular acceptance schemes
    • Fuel retailers' primary focus should be on developingcredit card offerings in the UK and Ireland
• APPENDIX
  • Definitions
  • Further reading
  • Ask the analyst
  • Datamonitor consulting
  • Disclaimer
• List of Figures
  • Figure 1: Jet offers customers in Germany a 5% worldwiderebate on fuel
  • Figure 2: Only four European fuel retailers belong to asyndicated loyalty scheme
  • Figure 3: Of those fuel retailers participating inindependent loyalty schemes, only Tesco in the UK has a car insurancecompany and a hotel chain as members
  • Figure 4: Redemption on non-fuel items is focused onservice station shop products and catalogue gifts
  • Figure 5: In a consumer survey, over 85% of Italianrespondents believe that their trust is increased by companiesparticipating in ' socially responsible activities'
  • Figure 6: By 2011, Finland, Norway and Turkey will havethe highest number of credit card transactions per adult
  • Figure 7: There are no co-branded credit cards in Italyand Switzerland
  • Figure 8: In most European markets there are generallytwo or three major credit card issuers
  • Figure 9: EuroCard/MasterCard and Visa are by far thelargest acceptance schemes in Europe

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