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When Marcus Sammel started what was to become the Royal Dutch Shell plc way back in 1833, little did he think then that his tiny antique shop in the East End of London selling bric-a-brac and oriental shells would turn into a giant worldwide company with representation in more than 90 countries and employing over 100,000 people. Neither did he think that the symbol and name that he chose – ‘Shell’, relating to his most popular line – would become one of the most recognisable symbols in the world!

Changing the future of fuel retailing with Shell

All around the world, Shell is known in the motoring sector for its high quality fuels and has taken some high profile marketing approaches to highlight the technology that it has developed – for example the Shell’s technical partnership with Ferrari on the Shell V-Power range. In today’s motoring world, however, it is no longer sufficient just sell fuel – the discerning, hungry and/or thirsty motorist also expects to be refuelled! While some fuel companies have gone down the route of partnering with a supermarket, Shell has opted to go down their own route of carefully selecting what it offers at its sites.

There are currently around 900 sites operating under Shell brand in the UK, of which independent dealers own and operate one third and the remaining two-thirds are owned by Shell but operated by independent Retailers. In the latter case, Shell is determining what is on offer in the forecourt shops.

One of Shell’s priorities is, of course, providing customers with value for money on fuels. Talking about the way that Shell approaches this, David Wood, Shell UK Retail Marketing Director says, “For many years now, we have been focused on a lean, cost-effective business that will enable us simply to provide our customers with competitive fuel prices. We have been very successful in these efforts and we believe that we have changed the way in which people perceive Shell. We have managed to keep prices down and to build our sales volume so that today we consider ourselves to be the market share leader in the UK.”

“This year we have launched our biggest marketing campaign for 10 years. Beginning on the 21st July, we introduced Shell Fuel Save regular diesel and unleaded petrol. The whole concept from the start has been to offer customers fuel savings at no extra cost and it is our claim that for every full tank of fuel, you could save up to one litre. This improvement has taken a huge investment in Research and Development over a period of five years in order to develop, test, and bring to market. It also means that we have the evidence to back up our claims. The savings will vary from customer to customer but the great thing is that whatever the benefit you experience, you don’t pay more for it.”

Part of the research programme behind Shell FuelSave looked at customers’ perception of Shell, its products and its fuels. “We needed to know what excites customers about their choice of fuel – is it just price or is it because they believe that they are being offered a better fuel? Along the way we found that the kind of customers attracted to Shell FuelSave are also more likely to spend money in the forecourt shop than those choosing where to fill on price alone.”

Food and Drink

Having persuaded more customers to choose a Shell forecourt rather than that of a competitor, due to the fuel offer, the question then arises – what will encourage them to spend money in the forecourt shop? Again, David Wood, “Whereas some fuel companies have linked up with supermarkets to provide a mini-supermarket, we have taken the route of selecting special companies to work with in order to provide the customer with a high quality choice of food and drink at realistic prices.”

One of those companies is Mycoffee with whom Shell signed a deal on 23rd August 2010 and Coffee Republic. This will enable Mycoffee to install a Coffee Republic branded premium self-service offer at up to 450 Shell service stations over the coming year.

Coffee Republic was launched by brother and sister Bobby and Sahar Hashemi, who opened their first store in fashionable South Molton Street in 1995 because they were unable to find a quality coffee chain that matched their New York experience and expectations. Since then Coffee Republic has grown into one of the best known and acclaimed coffee chains in the UK, with sites from Glasgow in Scotland to Newton Abbott in Devon.

The new Coffee Republic ‘To Go’ brand will use the same blend of coffee beans roasted in Milan since Coffee Republic’s inception which, in quality tests, beat off rivals to produce a superior flavour from self-serve coffee bars.

Commenting on the deal Coffee Republic CEO Tariq Affara said; “This is a new way of reaching our customers and is an exciting first for the Coffee Republic brand. The launch of Coffee Republic To Go has not been possible until now as this standard of bean to cup technology has simply not been available. We have worked hard with MyCoffee to ensure the taste is just right, and the flavour of our Milan Roasted coffee is not compromised.”

David Wood comments, “This offer will be at some of our regular filling stations as well as our highway locations. However, it is not just about coffee. Customers also want good food on the move and by this I mean not just crisps, sweets and chocolates but also something more satisfying and filling. We have been working with The Food Service Centre to deliver outstanding sandwiches and chilled snacks.”

Patrick Simpson formed the Food Service Centre in 1989. FSC Staff in the office in Somerset work on a daily basis to develop products, ensure food safety, quality control, customer services and order management. FSC in the UK has approximately 30 employees as well as offices in other European countries.

In January this year, Shell and the FSC launched Deli2go – an exciting new food to go brand. Only the best ingredients – for example free-range eggs, British ham, and sustainably sourced fish – are used to make the new Deli2Go products.

Besides exquisite sandwiches, The Deli2Go brand encompasses a complete food to go offer from meal solutions like Chilli Con Carne Pasta Salad, Hoi Sin Duck wrap or Cornish Pasty Range through lighter bites like Mini Scotch Eggs, Tomato Quiche or Southern Fried Chicken Bites to a delicious range of sweets like Passion Cake Slice, Millionaire Shortbread, Maple and Pecan pastry and many more. Complementing these is a line up of freshly squeezed juices and smoothies.

Back to David Wood. “To assess the progress we made in this arena, we asked Allegra Strategies to conduct an independent test on the customers’ perception of the taste and quality of what we are now offering. The feedback was extremely encouraging as in our customers’ opinion, the taste was better than sandwiches produced by a well-known superstore, highly regarded in the area of food. We are well aware that people in general feel that food on the move is priced at premium to what they could find in their local shops. While it has to be accepted that there is always a price to be paid for convenience, we are making sure that there is corresponding value in form of quality, taste, provenance and convenience returned to the customer. A basic sandwich in your supermarket is simply not comparable to our triple deep-filled Deli2go sandwiches.

“In addition to this we are also excited to be trialling an extended proposition at six locations selling a range of products from Waitrose. We are working with Waitrose to see how we can best offer their products and brand to our busy customers. On the larger sites, it may well be that the answer is to have a full convenience store, but on the smaller sites, a range of sandwiches might be the answer. Time will tell.”

Loyalty is Rewarded

In 2007 Shell re-launched its Loyalty Programme under the name Shell Drivers Club, working with dunnhumby of Tesco Clubcard fame. The Programme has been hugely popular with customers, doubling in scale since launch.

This year Shell has also joined with over 30,000 retailers nationwide to participate in the new Barclaycard Freedom Scheme. This is a reward programme like no other. With Barclaycard Freedom you automatically earn Reward Money every time that you spend at participating retailers, which you may then be able to redeem on your next transaction at selected stores within the programme. Shell’s view on this is that, while at present you cannot redeem the points for fuel, it will hopefully encourage more drivers to fill up with Shell and presents some unique opportunities to target the most valuable customers.

David Wood concluded, “Over the last few years, our business has been heavily impacted both by the recession and by the high price of fuel. As a result, motorists are trying to use less fuel – either by altering the way in which they drive or by simply using their vehicles less. Shell has responded by developing Shell FuelSave and we continue to work on improving the quality of our fuel and by endeavouring to offer better value. Over the coming years, I expect fuel prices will continue to rise and fall, but the days of cheap fuel have probably gone. Here at Shell, I believe that we have adopted the right strategy for the market conditions and when the market does pick up, we will be in a strong position. We are very clear – our business is about fuel retailing but the question is how do we attract the right customers to our sites? We see the answer in a simple combination of high quality fuels which make a real difference, an appetising range of food and drink and great rewards for our most valued customers.”

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