From oil and gas to retail

If you think that petrol and diesel is all there is at fuel stations, think again. These locations have transformed into retail meccas, and technology is playing a key role in enabling these brands to offer the best possible experience.
Joanne Carew
By Joanne Carew, ITWeb Cape-based contributor.
Johannesburg, 10 Nov 2020
Itumeleng Makgati, Sasol.
Itumeleng Makgati, Sasol.

If you’ve ever stopped at a dingy petrol station on a road trip, you’ll understand the value of a well kitted out service station. Equipped with franchised fast food outlets, playgrounds, ATMs, free WiFi and ample petrol pumps, these locations have transformed stopping for petrol into a retail experience.

Automation station

Cape Town’s first independent oil storage and distribution terminal, Burgan Cape Terminal, officially opened in 2017. The facility is located at Cape Town’s port and offers 122 000m³ of diesel and petrol storage. It was designed to receive fuel product by sea, store it and then distribute it by truck, offering an alternative fuel supply and significantly reducing the chances of fuel shortages. The terminal is interesting from a tech perspective because a fully automated terminal solution is used to monitor and manage everything from terminal safety to storage tank levels. Enabled by Fortune 100 technology company, Honeywell, this automated solution provides a single view of the entire facility and enables leaner, smoother operations and smarter servicing and maintenance.

Speaking to IOL earlier this year, Vishal Premlall, national director of the South African Petroleum Retailers Association (SAPRA), said fuel stations are being designed to cater to consumers who would otherwise have to veer off route and visit a suburban shopping mall, to get what they need. In fact, Premlall suggests that modern petrol stations are embracing an entirely new business model – one that places the customer, rather than the car, firmly at the centre.

Nebula CTO Andre Witte agrees. Over the course of his time at the Cape Town technology expense management company, Witte has worked with four of the big oil and gas brands. “What we need to remember is that petrol stations still have a massive advantage when it comes to convenience,” he says. “If you run out of bread, it’s easy enough to quickly pop down to your nearest garage, at any time of day, to grab a loaf.”

Understanding this advantage, we’re seeing more and more oil and gas companies investing heavily in technologies that enable them to boost this area of their business, incorporating digital retail solutions that offer greater convenience. It’s also important to point out that where a filling station’s margins may be controlled when it comes to the sale of petrol and diesel, they’re not controlled on the retail side so it makes sense for these businesses to scale up this aspect of their business. “Their competitive advantage is not about their fuel offering, it’s about everything they offer customers on top of filling their car.”

Smart tech ups efficiency

In recent years, the oil and gas industry has been subjected to widespread disruption – from rising global demand and highly volatile prices to increasingly stringent environmental regulations, says Itumeleng Makgati, Sasol’s chief information and security officer and VP for IT.“ All of these issues have created a melting pot for us, forcing the industry to identify new ways to deliver products and services so that they remain relevant. Technology enables us to keep up with the times, allowing us to join the modern-day playing field.”

Covid-19 and the global lockdown restrictions have only highlighted that we need to change up how we work, she adds.

According to Makgati, it has traditionally been quite a challenge to advocate for digital in the business. “When you talk to an engineer in a plant and you explain to them how cutting-edge technologies can help them be more productive, they’re intrigued. That is until you tell them that they need to invest a bit more to realise this heightened efficiency. But a compelling event – like a global pandemic – forces us to adapt, explore and embrace the potential benefits of new technologies.”

But digital transformation doesn’t come easy. Witte says petroleum businesses have typically hit major hurdles when it comes to data, legacy systems and a lack of integration.

If a company wants to offer a seamless digital experience, it needs accurate data, he says. “From our experience, because many of these businesses used to run very manual operations, their master data is often inaccurate.” From a legacy perspective, many of these oil and gas companies were quick to roll out digital solutions and loyalty programmes back in the ‘90s when tech was really starting to make an impact within the retail space. But that was close to 30 years ago, so many of these digital retail solutions are out-of-date. This presents an integration challenge.

For example, if your service station has a Corner Bakery, a Vida e Caffè or a Pick n Pay Express, these third party retail outlets (called alternative profit opportunities or APOs) are likely to each have a different point-of-sale system or stock ordering solution. This doesn’t seem like a big deal, but if you want to offer customers a unified experience, it can be a difficult to do so. “Customers want to be able to order charcoal for the braai, a coffee and a Krispy Kreme donut in one go and if your different APOs don’t integrate with each other, this sort of thing isn’t possible.”

The customer is (still) king

Most oil and gas businesses have two sets of customers – business-to-business (B2B) and business-to-consumer (B2C). “You and I who engage with them when we’ve run out of milk or fill up the car are the B2C side. And their commercial customers, like car manufacturers and logistics businesses, are the B2B side,” notes Witte. Mobile apps, loyalty programmes, personalised offers and free WiFi add value to their B2C clientele, while self-service platforms and the IoT are being implemented to make it easier for B2B customers to place orders and track when their fuel will arrive.

Technology enables us to keep up with the times, allowing us to join the modern-day playing field.

Itumeleng Makgati, Sasol

For Sasol, it was important to unpack why they wanted to go digital in the first place and have clearly defined outcomes. One key driver, says Makgati, was to change the customer experience, identifying new ways for the brand to interact across the B2B and B2C markets.

As Witte notes, this came down to data.

“For a while, we’ve collected data, but up until now, it hasn’t been used to understand our customers, predict demand, make informed decisions and identify customer pain points,” says Makgati.

But digital evolution is not just about external customers, it’s also about your internal staff and users, she adds. So much of this is new in the business, so it’s important to try things and fail fast, Makgati notes. For example, Sasol recently implemented connected worker technologies to improve safety at one of its operations. By deploying IoT-connected helmets to operators, activity could be tracked and any issues flagged in real-time. “The idea was great, and it was easy to implement the technology, but we didn’t think about the user. These operators haven’t interacted all that much with technology and now you tell them to wear a helmet that tracks their activities. Naturally, there was pushback because we hadn’t taken the time to explain to these operators what we were doing and why,” she concludes. “When it comes to technology, adoption is all about creating a convincing story. Explaining why you’re implementing technology and making sure that everyone understands the benefits of it.”