High on highway retailing

Oil companies are betting big on highway retailing and are using every trick in the book to build customer loyalty

If you are one who goes biking or driving on the highway quite often, oil marketing companies could soon roll out the red carpet for you. As competition from their peers as well as private sector refiners and marketers such as Reliance Industries and Essar Oil intensifies, oil marketing biggies Indian Oil Corporation Ltd (IOCL), Bharat Petroleum Corporation Ltd (BPCL) and Hindustan Petroleum Corporation Ltd (HPCL)-are betting big on highway retailing.

Diesel is sold in huge quantities on highways with fleet operators, truckers, urban customer, bikers/scooterists and car driver flocking the retail outlets located on them. "We are one of the first companies to segment our customers. For farmers we have a separate segment of offerings; for truckers and travellers on the highway we have a separate segment. Going forward, sales increase will come from tier-two and tier-three towns and from the highways," says a senior official from Hindustan Petroleum Corporation Limited (HPCL).

HPCL offers special facilities for truckers at its outlets where they can halt, service their vehicles and start afresh the next day. HPCL has a total of 12,869 retail outlets of which 1,291 are Club HP outlets. To improve customer experience, in 2014-15, 108 retail outlets were upgraded from Club HP outlets to "Club HP Star outlets" (premium outlets).

"Our highway outlet formats are based on customer need identification. On the highway we have large format outlets to ensure outstanding customer and vehicle care," adds the HPCL official. The oil marketing major has 6,000 retail outlets dotting the highways with 3,000 on state highways and another 3,000 on national highways.

In 2010 HPCL launched its card-based loyalty programme, Drive Track Plus, which is accepted at most of its outlets. So far a million trucks have enrolled for this programme.

The nation's biggest retailer IndianOil Corporation, has launched a new drive, Networking of Highway Retail Outlets, that covers over 600 retail outlets for the benefit of diesel consumers from the commercial transport segment. The company is also planning greenfield large-format retail outlets to offer state-of-the-art facilities to highway motorists very soon. IOCL has strengthened its presence on the highways not just by commissioning new retail outlets but through new initiatives aimed at the commercial transportation segment, a significant consumer of diesel on the highways, IOCL says in its annual report. IOCL has a total of 24,405 retail outlets. It has also introduced a loyalty programme for fleet drivers through under the Driver Card and for farmers under the Kisan Card.

OFF THE ROAD

• Highway retail outlets form a major revenue-generating segment for oil marketing companies (OMCs)
• OMCs offer a wide range of services for customers including allied retail business (ARB) that include ATM facility, take-away food counters, vehicle accessories etc. at retail outlets through tie-ups with banks, food brands and original equipment manufacturers
• In  2014-15, ARB income realisation for HPCL stood at Rs 68.4 crore with a growth of about 23 per cent over the previous year. ARB continues to be a focus area for the retail segment as apart from enhancing the customer experience at retail outlets it also contributes significantly to non-fuel revenues, HPCL said in it annual report
• For BPCL, ARB achieved a turnover of Rs 450.20 crore with a growth of 4.2 per cent during the year 2014-15. Its network of convenience stores, branded In&Out, operates at 169 retail outlets. “We also have a widespread network of over 100 quick service restaurants in alliance with leading Indian and international food chains," BPCL said in it annual report.

Under its 'Highway Proposition' strategy the company is working towards networking select retail outlets on the Golden Quadrilateral and North-South and East-West corridors in the first phase and subsequently on all major national highways. The idea is to maintain its leadership in the highway retail business.

For its part, BPCL has launched a signature brand of outlets, the One Stop Trucker Shops (OSTSs), strategically positioned on major highways to give transporters and their drivers an experience of 'a home away from home'. BPCL launched this plan around seven years back and it has grown in popularity over the years. "Its not just fuelling; there are other facilities that truckers find beneficial," says a BPCL official. BPCL has more than a million truckers taking advantage of its highway retail outlets, he said.

These outlets, in addition to offering the regular services offered by company-owned, company-operated outlets, also offer SmartFleet services, a customer care centre, truckers' air gauge and greasing facility, driver rest rooms and secured parking. "With private players expected to enter in a big way, there is now an enhanced focus on customer service standards," says a BPCL official. The company aims to differentiate its offering by upgrading various forecourt service initiatives with the help of technology and automation.