How BP’s mobile payment app trades discounts for data
Mobile apps enabling consumers to buy gasoline without stepping out of the car are a fast-growing category, but fuel marketers’ associated rewards programs have taken a bit longer to catch up.
Top U.S. gasoline retailers including Chevron, ExxonMobil and Shell have revamped their fuel rewards programs to streamline usage, as fuel marketers recognize the power of new data streams available to them by combining mobile payments with loyalty.
BP is the latest to overhaul its fuel rewards program with the recent launch of BPme Rewards, a consumer loyalty program that pairs with the mobile payment app BP launched last year. The app accepts all payment cards, as well as PayPal.
For the first time, BP has the opportunity to leverage troves of data about consumer preferences for fuel sales, loyalty and promotions, according to Nicola Buck, BP’s head of marketing.“We’re starting to gather more data than ever, which will allow us to shape offers to individuals and work with other companies — stores and brand marketers — on more and better offers,” Buck said.
BP’s move comes at a moment when gas stations are becoming hubs for innovation around in-car payments, ranging from fuel to food purchases. Uconnect Market is working with Shell to support an in-car digital wallet, and ExxonMobil recently said it will enable Amazon Alexa voice payments at gas stations.
Fuel marketers are carving out different opportunities with the transition from older rewards programs that typically require feeding a separate loyalty program number into the gas pump to newer mobile loyalty programs, according to Richard Crone, a principal with Crone Consulting LLC.
“Mobile payment-powered fuel rewards programs are removing friction from a clunky process and creating a check-in strategy for gas marketers, producing powerful insights into where, when and what customers are buying at their stations,” Crone said.
Critically, convenience stores are connected to 80% of U.S. gas sales, and more than half of customers filling up go into the store to buy a beverage, Crone said. Fuel marketers’ mobile apps could be extended to sell beverages at the pump through kiosks and autonomous vending machines nearby pumps, he said.
“Linking payment, rewards and incentives will be even more important as gas sales shift to electric charging stations because stations will want to forecast what customers buy before they plug the vehicle in,” Crone said.
Though BP is only in the early stages of developing customized offers, the company envisions creating individualized incentives for customers based on their past purchases at BP's 6,800 stores in North America.
“Using the power of data we’ll deliver specific rewards to customers who usually buy premium gasoline, and we’ll know whether a customer typically buys coffee or soda or water and we can structure deals and promotions accordingly,” Buck said.
The pressure to modernize BP’s rewards program in the last year was intense, given the rapid evolution of mobile payments technology, Buck noted.
“Consumers are used to shopping on Amazon, having things delivered, and being recognized as an individual, and they have exactly the same expectations of a gas station,” Buck said.
Overhauling BP’s fuel rewards program was no small feat, as it included phasing out a seven-year-old loyalty platform while continuing to support some separate rewards programs connected to banks and supermarkets.
BPme Rewards replaced Driver Rewards, which BP launched in 2013 enabling users to redeem fuel discount rewards of 10 cents off for every $100 spent at the pump.
The new basic offer for BPme Rewards is 5 cents off every gallon with each fill-up through the following month. To encourage continuity, users must spend at least $100 each month via the app to retain the 5-cent discount.
Customized offers will appear within the app, where Buck said BP plans to leverage new data streams for additional rewards that could encompass premium fuel purchases, discounts on branded food and beverage items and deals on loyalty program members’ birthdays or loyalty program membership anniversaries.
“The loyalty program allows us to hone into consumers' rewards preferences and cater to their needs," Buck said.
BP also linked its proprietary credit card to BPme Rewards. BP gasoline users who have the BP Visa credit card issued by Synchrony earn a standard 10 cents off per gallon on every purchase (a closed-loop version of the same card earns 5 cents off per gallon). Customers of either card are eligible to enroll in BPme Rewards to earn an additional 5 cents per gallon — for a total of 15 cents — if they spend at least $100 a month on fuel through the app.
BP made sure to structure its new app so that local gas station market promotions and bank loyalty programs BP supports, including FIS ScoreCard Rewards, also work with BPme Rewards.
One hitch BP could not overcome with its new app is the separate existing fuel rewards programs BP has with certain supermarket operators, including the Kroger-owned Mariano’s supermarket chain in Illinois, Fresh Perks in Wisconsin and Harris Teeter stores. BP is still working to combine those rewards with the new BPme Rewards.
“We want to keep giving our customers choices in how they’re rewarded, and while there’s a bit of complexity in how all these programs work together, eventually we hope to add them all to BPme,” Buck said.