The 'Herculean Lift': How BP's Customer Obsession Drives Retail Media, Category Strategy & Potential POS Overhaul
Derek Gaskins, head of guest experience at BP, remembers a time when getting served an ad while filling up was enough to prompt shoppers to crack gas pump screens.
"People were insulted," recalled Gaskins of his time at Giant Eagle 20 years ago during a keynote at P2PI LIVE & Expo. "A lot of folks — we would talk to them in focus groups — would say that's my time to just look into space ... or that's just their time."
People today are more accepting of advertising, said Gaskins, but it must be relevant.
Relevance, delivering value and being customer obsessed guides Gaskins as BP enters a crowded retail media landscape.
BP and its U.S. retail portfolio joined the Axonet Retail Media Network in the summer, bringing more than 8,500 convenience and travel center locations (many with screens) into the platform. Leveraging BP's Earnify loyalty program and in-store touchpoints, the partnership with Axonet allows CPG brands to connect with BP customers through targeted media and national offers.
The company has big aspirations for the RMN. They're looking into off-premise advertising, for example, allowing them to connect and engage with shoppers in relevant, contextual ways (i.e., delivering an offer for Coke to a known buyer who hasn’t visited a store for a few days). But, Gaskins recognizes the journey and uphill battle ahead.
“The challenge is no matter what your scale, and even as big as we are, we are not large enough to match what a Walmart or Amazon can do with their retail media networks,” he said.
As a result, what the industry is seeing is more coalitions or co-ops coming together, he said. Convenience store retailers EG America and Parker’s Kitchen also joined the Axonet RMN earlier this year.
"It's still going to be a Herculean lift in the journey," Gaskins said. "I think the verdict's still out."
Consumer & Category Insights Driven
Beyond its retail media ambitions, BP is guided by a shopper-obsessed strategy. It prioritizes consumer and category insights to inform their approach on everything from merchandising and store layout to getting people from the pump (the forecourt) to the store (the backcourt).
"I learned years ago that sometimes my best customer is someone else's better customer," Gaskins said. "That was sobering. ... I always say we're a penny business. Pennies matter. If you can get just a couple more cents of profitability on any of the high-volume products that we sell, it is going to make a meaningful and transformational difference to your business."
In Gaskins' world, there are 28 product categories and they are not monolithic; each can be unique and serve a specific purpose. Roles can vary widely: some categories act as destinations or traffic drivers, while others are focused on encouraging impulse buys or maximizing margin.
Consider price-sensitive category gasoline. “It’s the only category retailers have a sign outside the street saying, ‘Here’s how much I’m charging,’” Gaskins said. "You can lose 40% of your business over 2 cents."
Once BP gets a shopper to the pump, the challenge is not simply driving them from pump to store, but understanding why shoppers are coming into the store, he said. "If it's food, can I get them to buy more beverages? If it's a beverage, can I give them to buy more food?"
Category and consumer insights can help inform store layout decisions to maximize and optimize gross profit dollars. Coffee, for example, is a powerful destination category with 96% of people stopping for it as a planned purchase, according to Gaskins. Considering this, he said the coffee area is an ideal location to position candy, bakery goods or indulgent impulse items.
While traditional cigarette usage is declining, total nicotine consumption is rising due to the growth of oral nicotine pouches, vapes and heat-not-burn (HnB) products.
"Tobacco is even more priceless than gasoline," said Gaskins, adding that the counter can be an ideal spot for higher-margin products or owned, private-label SKUs to capture additional impulse and profit.
Amazon Prime Incentives & POS Development
Gaskins recognizes that today's shopper experience is plagued by friction and complexity, and it has to migrate and change. At the same time, retail transformation is complicated by existing legacy systems and all changes must be financially justified.
"It will cost me maybe half a million dollars a site to change out every gas pump," he said. "If a gas pump works ... in the words of Steve Jobs, it just works."
However, BP is still making moves to make things seamless for its shoppers starting with its Earnify program. "We're bringing everything under this umbrella," he said.
BP ran an incentive tying into the Fourth of July, promising those that link their Prime accounts to the Earnify program a dollar off per gallon (up to 35 gallons) from July 3-6. Prime members can also link their accounts to Earnify and save 25 cents per gallon every Friday at BP, Amoco or participating ampm locations from Oct. 17 through Dec. 26.
The company is also exploring developing its own point-of-sale (POS) system. "We have to," Gaskins said. "We're working with legacy supplier partners who have no incentive to make things seamless."
Some BP locations are franchises and some franchisees may only have one station that'll never get a rewards program, he explained. A unified POS system — one that ties back to the RMN and handles offer reconciliation for the back office — could be key to offering a seamless, frictionless experience for all customers.
