The road ahead

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Think about the last time you filled up your car at a petrol station. The chances are, when you paid for your fuel, you were met by an array of refreshment options. Far from the packets of crisps and fizzy drinks of the past, filling stations now offer a wider, more sophisticated variety of choices – in fact, they’re more like supermarkets than ever before.

Shell is leading the charge on this. With the industry facing disruption from alternative vehicles and fuels, the oil and gas giant is placing many of its bets on retail – and insights are driving this shift.

Shell plans to grow its network of stations by almost a quarter, globally, by 2025, and will add another 5,000 convenience stores, with retail growth focused on emerging markets including China, India and Mexico.

On a mission 

In recent years, the company has made various strides to adapt to changing consumer needs around refuelling. It introduced pay-at-pump mobile payments, to save customers having to go inside to pay, and went one step further last year, announcing a connected-car partnership with Jaguar Land Rover that allows drivers to pay for fuel without leaving their vehicles.

“Some people would say ‘why would you want to make it easier for people not to go into your store?’ It’s because – if they’re on a mission to fuel and go – then it’s not about taking a break or stopping for food for tonight,” says James Johnstone, global customer insights director for Shell Retail and Lubricants. “We want to make the journey and experience as great as possible for them when they have that mission.”

Since late 2016, the insights function has been working on a project around food and beverage – an area Johnstone admits isn’t usually associated with petrol stations. “We like to look at it as a piece of real estate, and what we can offer on that, versus it being a petrol station.”

The decision to focus on food and beverage is linked to the increase in alternative vehicles; electric car registrations in the UK have risen from 500 a month in 2014 to 4,000 each month in 2017. Shell is making big investments in this space; last year, it acquired charging company NewMotion, which operates private electric charge points in the Netherlands, Germany, France and the UK, and it has signed a partnership with charging-network operator Ionity to offer fast charging in Europe. 

But the rise of electric vehicles also creates a practical quandary for companies such as Shell, as well as for drivers: charging an electric car takes at least 20 minutes – far longer than refuelling with petrol or diesel. That additional time on site has created an opportunity for Shell to re-evaluate the convenience retail experience it offers and segment consumer needs relating to what they want to eat and drink. 

The insights the company is deriving from this project filter into many different areas, from product ranges and the CRM system, to which alliance partners Shell uses on site. So a collaborative, cross-function approach has been vital to the success of the scheme, says Johnstone. “To really win in this space, we need to understand the refuelling needs – the food and beverage needs – and then have all functions pulling together around the core target groups we’re going after.” 

He says the food and beverage work has created an internal framework with insights at the centre. “The way everyone has adopted the thinking has been a really big win for us as a group – it elevates the insights function and how we’re seen within the business,” Johnstone adds. “I think that’s how it should be if we want to be consumer led.”

This collaboration has extended to Shell’s agency partnerships. For bigger pieces of work, the company has begun to bring multiple partners together, to work in a cross-agency partnership of sorts – an approach Johnstone feels is increasingly required to get the best results from agency collaborations. “It’s a lot of work to get the best out of it,” he concedes, but “I still think it’s the right approach.”

The company leans towards strong relationships with various partners, rather than taking the simpler route of using one agency to manage everything. On the food and beverage work, for example, Shell is working with Bamm, MB Analytics, Sparkler, and four Kantar agencies: Kantar Media, Kantar Vermeer, Kantar WorldPanel and TNS Retail.

Creating an umbrella organisation of agencies working together in this way is a strategy that brands are increasingly using to bring different specialisms to the table, but it can become unwieldy. 

“Suddenly, you create something very complex, which is challenging to manage internally,” says Johnstone. “The easy answer would be, ‘we’ll get one agency to do everything’ – but then we’re probably going to get something substandard. So agencies are starting to learn and work in a different way, with a different model.”

They are realising the benefit of such collaborative approaches, he adds – and, in some instances, this approach has led to partners teaming up on projects for other clients afterwards. 

Forward thinking

This multi-agency approach is an example of what Johnstone terms “being on the front foot”. With various disruptions in the energy market – electric vehicles, hydrogen, and so on – it’s vital for Shell’s insights team to be thinking ahead when it comes to trends, not simply reacting to them. In Johnstone’s view, this moves the discipline further up the food chain.

“Disruption is great for insights as a function. When people are looking for answers to something we don’t fully comprehend, that puts the insight function in a strong place to really understand the consumer response and appeal. Disruption is a challenge for our business, but we are trying to lead from the front on that.” 

This doesn’t apply simply to external trends and pressures; for Johnstone, innovation is also shaping the way the insight function works. Perhaps for that reason, he believes thinking of this area only in terms of market research stymies the industry’s potential. 

“The term ‘market research’ sends a shudder through me, because it doesn’t help the insights business. It’s almost like a methodology – it’s a name that refers to how information will be collected. I think that shackles us to the past and it puts you in a different place within organisations.” 

Johnstone is excited by the potential of machine learning, which he views as a “massive enabler” for insights professionals to do less laborious jobs and direct their energy towards work of greater strategic value.

“It allows us to reapportion our time – and that of our agency partners – away from heavy-lifting, manual pieces of work, such as project management, data churning and presentation creation,” he says. “When I hear of agencies still having teams in certain countries churning out PowerPoint decks, I’m like, ‘wow, really?’.” 

In this sense, Johnstone feels some traditional market researchers should be concerned by automation. It could drive cost efficiencies, which – in turn – could re-allocate budgets into areas that will have more business impact and help move insights higher upstream within the business. There still needs to be human interpretation, however. 

“Businesses risk abdicating responsibility for decisions, and that could prove quite costly,” says Johnstone.

While big data is one of the factors in the success of automating processes in future, it’s not the overall input, he adds, claiming that the value comes when multiple data sources are organised and integrated. 

“People say data is the new oil; I don’t agree. I think consumer understanding is the new oil. Data is one of many inputs that lead to greater customer understanding.”

The first part of Johnstone’s career was spent in data insights, while the second has been focused on customer insights – and he believes “passionately” that the two work together. 

Shell’s customer insights team is in the process of setting up data visualisation and warehousing information from continuous datasets, with a view to laying the groundwork for automation later on. One of the objectives of this is to free up agency partners from spending a lot of time doing manual tasks, such as creating presentations. 

As well as combining data from a data-visualisation perspective, the team has also started to link segmented data to other datasets – for instance, Target Group Index (TGI) data and its loyalty databases, to understand sites and, potentially, inform customer relationship management (CRM). “We’re saying: ‘how can we understand more about our segments by linking it to other things?’”

By taking learnings and segments from one piece of research to apply to other datasets, Johnstone hopes the team will be able to segment consumers based on their needs, as opposed to pushing one-size-fits-all messaging. 

Cherry-picking for impact 

As for many large organisations, one of the challenges facing the Shell insights team is prioritising the areas in which it can contribute the greatest business impact. With 15 staff on the global insights team, it must be choosy about the projects it deems to add the most strategic value. Johnstone is focused on carving out more time for the team to spend on what he terms “the thinking pieces”, as opposed to the ‘doing’. 

“One thing we have been successful at, internally, is really elevating the strategic-thinking piece by cherry-picking the areas that we think we can affect – that will have a big business impact.” 

To do that, the team has had to look at how it democratises information to create better self-help systems and means of sharing insights with the wider organisation. Additionally, it has meant realising that the role of the insights manager is also partly communications and PR, to share messages in an engaging way internally.

Shell has done a lot of ethnographic work to let its customers tell the story and put senior leadership in the consumers’ shoes. One example is a Carpool Karaoke-style project that has recently been completed in Mexico, a new market for Shell.

The project involved the company’s senior leadership being taken to people’s homes to conduct an in-depth interview themselves. They then accompanied the driver on a journey in their car – for instance, to the petrol station to refuel, to the shop or to get a coffee. The experience was recorded by in-car GoPro cameras, while several vehicles also had videographers, and the material was used to create videos for different internal purposes. 

“We could say, ‘this is what it’s like in Mexico – here’s a presentation’. This really brings it to life,” says Johnstone, who adds that the videos also showed senior executives leading by example by putting the consumer at the centre.

A combination of proactive ‘cherry-picking’ and increasing the visibility of insights within the organisation – by spending time, face to face with the relevant teams – has resulted in stronger engagement from the rest of the company, which is rewarding, says Johnstone. 

“People will come to us more than they would have done in the past, when it was more reactive. I think the team take a lot of reward from that,” he adds. “Being asked to give your opinions and views on strategy, even if it’s not your area, has been a journey for us over the past two years.” 

Directing energy to new areas 

In late 2017, Shell established New Energies, a business focused on exploring the possibilities of innovative fuels for transport and renewable power. 

To help its customers’ transition towards alternative fuels, Shell needed to understand more about their appetite for biofuels, uncover the challenges, and work out how it could help them overcome these. It also wanted to identify which customers are better positioned to make the transition first.

Shell worked with research agency Thinktank on a qualitative project in the UK, Germany, the Netherlands and California, to establish the attitudes, concerns and priorities of small and medium-sized businesses. The researchers encountered widespread uncertainty about the future of alternative fuels. 

Some business owners were concerned about the expenditure and effort involved in changing their fleets to biofuel vehicles and the need to be sure they could refuel everywhere. Others, while positive about the possibilities of alternatives, had considered making the shift to electric vehicles, but hadn’t yet found the right option.  

Sabine Stork, founding partner at Thinktank, says the uncertainty over alternative fuels was compounded by a general climate of fear and uncertainty in wider society. “The powers that be were slow-moving and indecisive; this led to an unsettled climate of procrastination, and impeded everyone from investing and planning for the future,” she adds.

When the researchers told respondents that Shell was leading the research, the reaction was positive, because customers felt it could guide them into an uncertain future. “The hope was that a big brand entering this space would provide the authority and muscle that seemed lacking to drive alternative fuels forward,” Stork says. “When a big brand makes a big change, it signals to its customers that it’s safe, and it’s real.”