Looking at the future – Terpel’s digital transformation

We spoke to Nelson Yobany Pabon, VP of Technology and Digital Transformation, and Alejandra Londoño Carulla, VP of Non-Fuel Businesses, about Terpel's digital transformation, new services such as delivery and lockers, and dreaming about autonomous shops. Terpel is the leader in fuel distribution in Colombia with some 2,000 service stations. It also has operations in Panama, Dominican Republic, Peru and Ecuador.

Q. You have recently been named Terpel's Vice President of Technology and Digital Transformation. What do you see as the biggest challenges for service stations in the digital transition?

Yobany. The digital transition is currently advancing at a steady pace. The physical world is being eclipsed by a digital one that is interconnected, integrated and virtual. Industries are being revolutionised by automation, analytics, localisation and individualisation. At Terpel, the digital age has led to users demanding more innovative services. Consumers are far more demanding in terms of service and after-sales operations. That is why we are mapping out routes to digitally change each business.

Y. The main challenges are dived into two. First, to deepen and improve the services of our current business, the marketing and distribution of fuels and lubricants. We must expand contactless payments, broaden complementary services, preferably self-assisted, move to technologically hyper-connected stations, and make customers' experiences memorable. Second, the business of alternative fuels and how to offer them at our forecourts.

Q. What are some of the main digital initiatives Terpel has already implemented?

Y. In the short time I’ve been at Terpel, I’ve seen a great evolution in digital transformation. We started with the basics – the way we work and communicate with our teams. The first thing many organisations had to figure out with the pandemic was how to digitally interconnect with their teams. At Terpel we moved to collaborative models, balancing work and personal life. By 2020 we reached more than 70% of home-office work. During that year, we digitised 90% of our human resources processes, improving the interaction of our employees and process self-management. We eliminated conventional telephony in our offices, moving everything to digital telephony through collaborative tools.

Y. Regarding the business, initiatives include contactless payments at our service stations with RFID technology. We also have chat boxes for customer service as well as optimizing processes such as billing. There are self-service kiosks that sell drinks and snacks. The shops are working, and worked very well during the pandemic, with product delivery via digital platforms. There is also an order ahead service for in-store pick-up. We offer a digitally-managed fleet fuelling system. Loyalty programmes such as Club Terpel. And we use robots to automate many operational and financial processes that have generated substantial benefits in operational expenditure.

Q. What kind of demand is there right now in Colombia for contactless payments?

Y. Usage is increasing. Colombia is a country that is making progress year by year in terms of banking penetration; every day more and more people are moving to banking. The first thing is to have a means of payment that enables the use of contactless payment methods. Last year was a driving force for this type of technology.

Q. Through its Al Toque convenience store brand, Terpel already uses online delivery services. How do you see the development of this format?

Alejandra. The growth we had last year through third-party channels was exponential. The biggest (provider) here is Rapid, followed by domicilios.com. However, in the last two months we launched our own platform for home delivery and click-and-collect. We aim to grow a lot in that channel. We are also exploring last mile fulfilment, even with these platforms that have a spectacular customer database. We are looking at options like dark stores, dark kitchens and lockers.

Q. A clear trend in service stations is to bring together different services, in many cases third-party. How difficult is it to integrate third-party services from a technological point of view?

A. At Terpel, we always think of ourselves as serving people, not cars. Staying in the typical world of the convenience store or petrol station is not the idea. We want to explore new services. The idea is for the station to become a destination.

Y. We are living in a unique moment with the advancement of telecommunications and digital technologies. Technologies provide organisations with capabilities to make them more efficient, competitive and successful. We will use them to create personalised, self-assisted services in a large, hyper-connected network that puts the customer at the centre. The complexity [of adding external services] is becoming smaller as technologies give us the tools to do so.

Q. In an ideal world, are there any innovations you would like to bring to your shops?

A. The topic of human contact, especially in this time of pandemic, has become important. In that sense the dream is Amazon Go and other shops where you go in and out. The technology also has to allow you to have a good experience. At Amazon Go shops you have a different experience. Innovation and technology are at the service of the customer. The dream is that when you get to the shop, Alexa will say "today you need to buy these products, Alejandra". Connecting home with the convenience store.

Y. Definitely the self-assisted theme is the future, not only in convenience stores but also in petrol stations. Through autonomous vehicles, with whatever drive assistant I may have, I will be able to order before I get there. Or while recharging an electric vehicle I can go into the shop to buy what I want. At that point we definitely need a beacon located in the shop or station that detects my arrival and, based on analytics and preferences, tells me what products and offers I may want. That's the dream and that's what we're working towards.

Q. It’s proved that many customers also enjoy having positive human interaction with capable staff. Will there have to be a balance between both formats, the human and the autonomous?

A. Speaking of our convenience stores, part of our raison d'être is friendly service. It's part of the Colombian spirit. We want that service to be pleasant and agile. Our shops have assisted checkouts but also self-checkouts. We have piloted the self-checkout service in two shops for seven months. The average ticket has almost doubled, perhaps because of the experience. This year we will extend the service to 15 more shops. You can have a combination in the same shop for both types of customers, those who prefer a personal interaction and those who are more comfortable on their own. A good balance is what we are looking for right now.

Interview by Oscar Smith Diamante