This is one of the top five most read articles in the petroleum retailing news category for NACS News in 2011. View the original story here.
AUSTIN, Texas ? Shell is about to score an industry first when it comes to major oil loyalty offers, NACS has learned.
The refiner is joining an electronic discount network that will allow consumers who shop at brand-name retail merchants such as Macy?s, Barnes & Noble, Nike, J.C. Penney and The Home Depot to convert reward points they earn at those chains into instant price discounts at the pump.
?We?re already the No. 1 brand in the U.S. and we intend to further widen the gap between ourselves and our competition in 2012,? says Rick Altizer, Shell Retail North America marketing delivery manager.
Shell unveiled the plan and other strategies it will adopt to strengthen its brand at a national trade show and convention in Austin, Texas, yesterday. Some 90% of Shell wholesalers are among the 2,000 plus-attendees at the event, along with more than 200 vendors, Shell officials say.
The new ?Fuel Reward Network? (FRN) will let consumers decide how ? and how much ? they want to save on their gasoline and diesel purchases, says another Shell official. The FRN will launch at Shell in phases during 2012.
Under the program, consumers will pick up a free FRN card at any participating Shell station and register online at fuelrewards.com. They will then be able to add and combine rewards they earn from purchases at FRN grocers, FRN Dining, FRN Online Mall and FRN e-coupons and spend them to fill up at the pump. They can stack up their rewards or spend them as they earn them, up to a maximum 20 gallons per purchase.
Consumers who join FRN will be able to track and manage their rewards online, Shell says. In all, more than 700 brand-name merchants are participating in the network.
Shell was the first major oil company to launch a coast-to-coast rewards offer with a grocery chain, signing a deal with supermarket giant Kroger in 2009 that will eventually cover 31 states. Shell later added regional supermarket grocery chains to its rewards portfolio, including Giant and Stop & Shop, in the Mid-Atlantic and Northeast, both owned by Dutch company Royal Ahold, and Winn-Dixie and Bi-Lo in the Southeast. Several West Coast chains also have been added to Shell?s supermarket string.
However, even with such broad geographic coverage, Shell was still only able to provide rewards coverage to approximately 8,000 of its 14,000 branded stations in 120 markets. The FRN program will help Shell fill in the gaps in its coverage.
Shell?s grocery rewards offer has been a resounding success, officials say. Some 3.5 million Shell customers use their loyalty card to redeem discounts, says one Shell source. Of those, 2.5 million were new to Shell and purchased an average of 21 gallons a month. The 1 million existing Shell customers who have started to redeem grocer rewards are now buying six gallons more every month, Shell says.
Working the behind-the-scenes magic on the FRN offer is Excentus, the Texas-based third party loyalty company, which is bringing the new rewards partners to Shell.
The rewards are funded by the issuing retail partner ? the merchant or grocery chain ? at no additional cost to Shell retailers over and above the 3.5cts/gal they pay for the Kroger rewards deal.
There is also expected to be an option in the new program that will allow retailers to issue their own site rewards as well.
?Everyone is trying to do something in this [loyalty] space but we?re going to be going far beyond what our competitors are doing,? Altizer says.
?The Fuel Rewards Network will help Shell-branded wholesalers and retailers by providing the opportunity to attract new customers and grow their existing loyalty base, boost non-fuel sales and leverage manufacturer funding of discounts,? Altizer adds.
Shell will also kick off a new fuels marketing strategy next year and a special bulk-buying program for Shell marketers, officials say.
Shell will launch a new fuel formulation called ?Next Generation SNE? in March 2012 that execs say will deliver 20% more active cleaning agents to boost engine performance.
The new additive will be introduced into all three grades of Shell gasoline. The refiner intends to spend around $100 million promoting it, which is more than it set aside for the launch of its ?Nitrogen-Enriched? gasoline in 2009.
?There is a new molecular structure in the additive which is unsurpassed in the industry today,? Altizer said. The new fuel is designed for most modern engines, is thermally more stable than conventional technologies, and holds up better under high operating temperatures, which means the formulation will work in all types of engines, conventional or modern.
Shell has also unveiled what officials say is an ?innovative? bulk buying program for marketers. Called the ?Shell Diamond Deal,? it will offer retailers special pricing from a half-dozen or more equipment suppliers who have agreed to work with the company on ?big ticket items.? Retailers will be able to discount deals on LED lighting, signage, health-and-beauty units and carwash equipment, as well as other equipment.
- Carole Donoghue (caroledonoghue@yahoo.com)
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