New fuel rewards program aims to disrupts major supermarkets’ exclusive offers
A new Australian national rewards program, FuelCents, due to launch in November 2013, aims to open up fuel rewards to any business or brand.
Sydney-based marketing technology company iMobileMedia, which developed the FuelCents program, said it expects “strong participation” from Australia’s two million independent businesses.
Any business or brand can lodge FuelCents offers that can be redeemed at any petrol outlet in Australia, which iMobileMedia says includes “every independent petrol retailer and all major petrol retail groups”. The fuel rewards will be available via iMobileMedia’s smartphone app, ScanZap, which is on Apple iPhones and Android phones.
By opening fuel rewards to every business and brand, iMobileMedia said FuelCents “dilutes the fuel price imbalance that has resulted from Coles and Woolworths exclusive offers”. It says the app will support competition and trade across both petrol and grocery retailing.
How it works
The system works by allowing shoppers to collect FuelCents as an activity incentive or reward on purchases. The receipt (shopper docket) from the petrol purchase is zapped with the ScanZap app and the reward value is rebated to the shopper’s account.
There is no limit on the FuelCents that can be redeemed in one transaction. The unique appeal of the system, according to iMobileMedia, is that households can collect FuelCents on multiple retailer or brand purchases anywhere, then aggregate the rewards into a single claim at any petrol outlet. The Company said some businesses have proposed to present FuelCentes as an ongoing reward, with offers such as ‘Get 20 cents per litre on each tank fill for 6 months’.
“There is no doubt about the compelling attraction of fuel discounts for consumers,” said Rob Keogh, Chief Technology Officer at iMobileMedia. “They are said to drive over $1 billion in trade to Coles and Woolworths,” he said.
ACCC fuel rewards investigation
The impact on competition of fuel rewards as an exclusive practice has been under the spotlight of the Australian Competition and Consumer Commission (ACCC) as well as scrutiny by independent retailers’ groups.
In response to a recent submission from the Company, iMobileMedia said Matthew Schroder, ACCC General Manager Fuel, Transport and Prices Oversight, wrote that the concern of the ACCC is on “the likely harm to other retailers and therefore competition and the competitive process for petrol retailing”.
“The ACCC investigation involves an assessment of whether fuel savings offers operated by Coles and Woolworths raise concerns under section 45 of the Competition and Consumer Act 2010 (Cth) (CCA),” Mr Schroder wrote. “Section 45 prohibits contracts, arrangements or understandings with provisions that have the purpose, effect or likely effect of substantially lessening competition in a relevant market,” he said.
New app may ease ACCC pressure on supermarkets
The introduction of FuelCents may mean the two big supermarket groups are “off the hook”, according to iMobileMedia.
“Now, as opposed to the ACCC blocking Coles and Woolworths, independent stores and their suppliers can compete in their value proposition to shoppers,” Mr Keogh said.
“The combined trade from the two million businesses of the independent groups, together with their suppliers and five million staff, means independent businesses have an equal, if not wider capability to leverage fuel rewards to engage customer loyalty,” Mr Keogh said.
Push to get businesses and brands on board
During the launch phase of FuelCents, iMobileMedia will offer more than $2.5 million in subsidized rewards to get businesses, suppliers, brand manufacturers and retailers on board.
The Company is aiming to engage 100,000 shoppers, ideally starting with household staples like bread, milk and coffee, perhaps expanding across motoring products like tyres, insurance or car servicing, and maybe even vehicle manufacturers.
“Whether you’re a mechanic in Maitland, a pharmacy in Devonport or a pie shop in Perth, FuelCents is now a simple and cost-efficient way to directly engage and reward your customers,” Mr Keogh said.
Dedicated fuel rewards app in development
The Company is also currently developing a dedicated fuel rewards app with features for motorists such as an expense log book, local motoring services and suppliers maps that identify the cheapest fuel in the area. That app, FuelZap, is planned for launch in February 2014.
FuelCents is due to launch on iMobileMedia’s ScanZap app in November 2013.