Today’s world of mobility would be unimaginable without filling stations. They can be found in every city and alongside all important roads and highways. Car owners regularly stop by to fill up or to make other purchases. The filling station networks are a part of basic supply services such as electricity, water, and telecommunications. If we consider current developments in politics, business, and society, however, we clearly see that the significance of the filling station will be undergoing a profound change in the coming years. Trends such as electromobility and the growing importance of the sharing economy are lowering the relevance of the filling station for the transport sector. Autonomous vehicles do not necessarily require charging or refueling at easily accessible locations. But by making clever use of their current assets, filling stations can develop into a core element of urban ecosystems in the future. If they do so, the great age of the filling station is still ahead of us.
The new mobility
We expect to see fundamental changes by 2040 that will not be limited to mobility behavior; they will also have an impact on the related areas of retail trade, logistics, and urban living. Our expectations for 2040 can be expressed in four propositions:
- In the automotive sector, electric motors will replace the combustion engine. Combustion engines will still be around, but only in older vehicles. This will be just as true for commercial vehicles/trucks as for passenger cars.
- The sharing economy will be fully established in the mobility sector. Ownership of vehicles will play no more than a secondary role. Most people will use mobility-as-a-service offers across various types of mobility. This sector will also include new means of transportation such as air taxis.
- In retail trade, e-commerce will become the primary channel for purchases in all areas. Products will be stocked and offered for purchase in shops less and less frequently. Businesses will increasingly be converted into showrooms for goods that are purchased online after being tried out and that are delivered the same day by sophisticated logistic chains. This will increase the need for inner-city areas for storage and transshipment of goods and heighten pressure on transportation networks because of deliveries being made in the inner cities. In response, 3-D printers will be used to produce products right at the site whenever possible.
- The average age of the population will continue to rise, and the number of people living in cities will continue to grow.
What opportunities are there for filling stations in such a scenario, and how must business models be adapted so that they profit from the developments described above? In our vision for 2040, the filling station will function as the operational center of an ecosystem comprising mobility and logistics services. In this role as a smart city logistics hub, it will perform a number of different tasks.
Supply point for fleets of autonomous vehicles
In a continuation of their previous role, filling stations will still perform a part of the energy supply function for vehicles. However, the focus here will shift from traditional B2C business to serving the fleets of autonomous vehicles maintained by the mobility and logistics service providers. These vehicles will automatically connect to fast-charging stations to recharge their batteries within only a few minutes. Besides being an energy supplier, the filling stations will also act as a forward hub where the fleet vehicles can be serviced and repaired if necessary. This avoids operational empty runs to central service hubs outside the cities and increases the availability of the fleets. In this role, filling stations can draw on their historical technical competence and have mechanics and service technicians ready to take care of the fleets.
Transshipment point in city logistics and hub for e-commerce
Thanks to their favorable locations on main traffic arteries and general distribution over the urban area, filling stations are ideal sites for optimized last-mile logistics. Deliveries from multiple sources can be bundled here before being carried to their final destinations by autonomous robots or drones. At the same time, customers who do not want deliveries made to their homes can pick up their orders in automatic package boxes at the filling station. Filling stations can make an optimal contribution to this business as their sites are located at easily accessible points in urban areas.
The position of filling stations as an important component in online retail trade goes beyond the simple handling of logistics. Filling stations will maintain showrooms in which customers can try out products and experience them hands-on before ordering them online. So filling stations would be performing a function that has traditionally been the domain of retail trade. While today’s retailers are dependent on a transaction-based business model with subsequent purchase by the customer, filling stations in 2040 will participate in online revenues on the basis of commission models.
Moreover, in 2040, filling stations will themselves be producers. Simpler products will be printed out on the site using 3-D printers and can be delivered or picked up immediately, reducing delivery times significantly. At the same time, products can be customized according to individual customer requirements.
Regional mobility center and encounter point
Besides the transport of goods, the filling station of the future will have an important role to play in people’s daily mobility conduct. Filling stations as mobility-as-a-service providers will serve as transfer points between various means of transportation, whereby this position will be more important in rural than in urban areas. Residents from nearby neighborhoods, for instance, will take an autonomous car to the filling station and commute from there to the next city by air taxi. Depending on their destinations, passengers will be efficiently distributed among the various means of transport. Good accessibility in combination with high passenger numbers will also turn filling stations into a good location for encounters in 2040. Operators will offer lounge areas, cafés, and co-working spaces where residents from the area and business partners can meet up. An early driver in this direction will be the legally required provision of secure overnight accommodations for truck drivers.
Consulting, service, and medical care
The high frequency of customers resulting from the role as transit point for passengers will make the mobility and logistics hub in rural areas increasingly appealing to service providers and retailers of products requiring a high level of consultation. Filling stations will be able to develop into neighborhood supply centers, especially outside the cities, in 2040, and government authorities and physicians (just two examples) will open offices here. A high degree of automation and tele-medicine will make possible out-patient treatment without the physical presence of medical personnel on the site. The result will be improvement in medical care, especially for older patients, away from densely populated areas.
Transformation of the business model
The realization of this vision demands a fundamentally different understanding of the filling station business model. Energy logistics is no longer at the forefront; thinking in terms of interconnectivity among goods, services, and technology is called for. The assets today’s filling station operators can bring to the table are their infrastructure (real estate properties in especially close proximity to traffic flows), their customer orientation and acceptance (shops, open 24/7, customer relationships via fuel cards, etc.), and their technical competence (even though the importance of the auto mechanic as a filling station operator has diminished in recent decades). Initial movement in the direction of this way of thinking can already be found on the market today. Aral, Germany’s largest filling station chain, has turned its shop facilities over to its partner REWE completely. BP, the parent company, is entering comparable partnerships all around the globe. Shell is partnering with Amazon and has installed locker pick-up stations at filling stations. Cooperation with the Postbank means that cash withdrawals can be made at Shell stations. Cooperation of this type must be steadily expanded.
The new filling station business model will be significantly more complex, the number of possible revenue flows and partnerships will rise substantially, added-value networks will replace linear, industry-specific added-value chains, and customer orientation will become even more pronounced. Success or failure of filling stations will depend on how well cross-industry partnerships and a strong ecosystem incorporating the assets the stations have can be established.
We consider the speed of the transformation to be critical for success. If the sector clings fast to the old business models too long, alternative structures to satisfy new demands will appear and the current business model will one day collapse in a kind of implosion. At a single blow, existing assets will become worthless and transformation will no longer be possible. On the other hand, transformation that comes too early runs the risk of missing the targeted markets completely and creating investment ruins.
Companies and their employees must learn how to be open for cooperation and to try out new business models. This presumes a culture in which the willingness to take risks and the possibility of failure of individual projects are permitted. At the same time, a possible cannibalization of previous business cannot be allowed as an argument to knock down new ideas. Unless these cultural principles are solidly in place, filling stations operators will not be able to adapt to the new conditions, exploit new business potential, and secure their position as an important element of mobility and logistics infrastructure for the future.