S Group innovates with mobile payment technology at the petrol pump

S Group, Finland’s largest retailer, won the NACS Insight European Technology Implementation Award 2016 for the new fueling feature on its award-winning S-mobile app. Fiona Briggs interviews Pekka Ylihurula, CEO of S Group subsidiary, S-Bank

Finland’s leading retailer, S Group, scooped the NACS Insight European Technology Implementation Award this year for its innovative fueling feature on its S-mobile app, which combines retail, banking and fuel services.

The neat fueling feature was launched by two S Group subsidiaries: S-Bank, which provides the retail group’s members with comprehensive banking services and ABC, a service station and fuel trade company, which operates 450 petrol stations in Finland.

S-mobile automatically recognises the customer’s location, and fueling is initiated by simply choosing the correct fuel pump from the app. After fueling, the payment is handled automatically through the S-Bank Visa card, linking the payment with customer loyalty benefits.

S-Group’s mobile is the most active commercial app in Finland with 1m downloads in Finland to date, a country with a population of 5.5 million; while the new fueling feature has already racked up 50,000 registered users since its launch in May, according to S-Bank CEO, Pekka Ylihurula.

That’s certain to grow as S Group leverages its size and scale. The company, which comprises 20 independent co-operative retailers, operates 1,600 outlets in Finland and is the largest grocery retailer with a 46% market share. Formats span hypermarkets, supermarket and convenience stores.

S Group is also the market leader in forecourt retailing (the ABC brand), the largest player in the hotels and restaurants sector and it operates hardware stores.

The Group’s bank, S-Bank, enjoys an enviable position within the retail group; as Ylihurula states: “It’s really exciting for a bank to be within this huge retail group - it opens up opportunities for innovation.”

With a workforce spanning 40,000 employees, the Group is a leading employer in Finland too and, in addition to its domestic businesses, operates hotels and restaurants in the Baltic States and Russia.

It’s perhaps not surprising that the fueling feature on the app was spawned in Finland, a country with a strong track record in technological innovation: SMS text messaging was born in Finland; and it’s home to the multi-national communications and information company Nokia. Finland also has a large number of technology start-up enterprises.

As such, there’s strong public demand for new services. “Finnish consumers have a really high appetite for innovations and new technology,” says Ylihurula; who reveals that in his sector - banking - 99% of all transactions are electronic, a phenomenal statistic.

The ‘host’ S-mobile app was launched two and a half years ago. It was conceived through S Group’s mission to offer simplicity and great customer benefits.

“What is unique in the app is that it combines S Group’s different businesses in a nice and easy to use way,” explains Ylihurula.

S-mobile, therefore, features the Group’s loyalty programme and can generate retailer coupons and rewards for customers. It can also provide directions to stores and sites and includes a banking application in the same app. It’s testament to the Finn’s appetite for technology too that 70% of all S-Bank’s electronic banking transactions are made in the mobile app.

Ylihurula reports the fueling feature was proposed by a senior leader within the Group in June 2015 as a way of facilitating payment at the pump for customers. It was developed within six months and piloted in January 2016 ahead of its spring launch.

“Nobody likes to use the fuel card reader, especially in the winter time, when temperatures can dip below -30˚C [the benefit of the app in winter time was actually suggested by a customer during the product testing],” says Ylihurula.

“This app makes all that irrelevant. When you need to fuel your car, you open the app, which guides you to the nearest petrol station. When you arrive on the premises, the app opens a new page and shows you all the metres and pumps that are available. If you are by pump three, you press pump three on the app and proceed to pump your fuel. When refueling is complete, the app handles the payment and a receipt is sent to your mobile. It saves time and hassle and there is no risk of skimming.”

The app can be downloaded from both the App Store and Android App Store and is updated with any new features which come on board. It can also be used on the Apple Watch, making mobile fueling payment a wearable technology too.

Ylihurula reveals S Group is now planning to add new features and services to the S-mobile app including car wash for use at its automated car wash stations.

Food ordering is also under investigation, so that when a customer is approaching a service station, they can pre-order their food to be delivered when they arrive at the site.

“These are the kind of things we are thinking about on the fueling side of the app,” Ylihurula says.

From a technology perspective, success for the fueling feature has always been assured, Ylihurula adds. “Innovation happens when you combine two complicated things like card payment and paying at the pump. It’s almost invisible - you don’t even know you are paying,” he says.

Considering that fuel is traditionally termed a ‘grudge pruchase’, that’s surely another customer benefit.

It’s no wonder S Group won the European Technology Implementation Award, sponsored by Verifone.

The company is humbled and honoured to be a recipient, Ylihurula says. “We were delighted by the Award. It’s great that a Finnish company can achieve something like this and be internationally recognsied. It took a lot of hard work and it’s great to get this kind of recognition. It’s really a big deal.”

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Fiona BriggsFiona Briggs Freelance retail business journalist

Fiona is an experienced journalist and editor, writing exclusive content for GCSF. She is founder of retailtimes.co.uk. She contributes regularly to NACS Magazine and writes articles on omnichannel shopper trends for Radial. Fiona is available for commissions at fionalbriggs@gmail.com

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