Sara Sloman, chief strategy officer, Paythru
Earlier this year, Sainsbury’s teamed up with Kempower to launch Smart Charge – dedicated ultra-rapid electric vehicle (EV) charging points – in stores around the country. The introduction of Smart Charge follows Tesco’s move into the space in 2019, when it teamed up with Pod Point and Volkswagen to offer – initially free – EV charging in a bid to encourage shoppers to dwell longer in its stores.
With over 750 bays set to be installed in more than one hundred Sainsbury’s locations by the end of the year, this puts the supermarket chain in the top five providers of EV charging in the UK. It also represents a significant opportunity for Sainsbury’s, as well as other retailers, to use their charging points as a way of generating additional revenue.
The fact is, installing charging points can be expensive for whoever is paying for their installation – whether the retailer themselves, the charge point operator, or a third party – and it can often take a few years before they become revenue-generating assets. Therefore, the sooner retailers can make that money back, the stronger the business case will be for installing them. Once they’re installed, they want to generate maximum value from them as soon as possible.
Fortunately, then, there are opportunities for retailers to generate revenue from EV charge points beyond just maximising their usage.
Additional sources of revenue
For example, the charge point could offer a discounted charge rate to the retailer’s regular customers to encourage them to shop at the same store more often. Or they could collaborate with the retailer’s loyalty scheme provider, such as Nectar in the case of Sainsbury’s, to offer additional or bonus points, or exclusive discounts or giveaways like a free cup of coffee in the retailer’s in-store restaurant for every £xx spent at the charge point.
This would help encourage a positive view of the retailer, driving footfall in-store as well as encouraging repeat usage of its charge points. In addition, working with the loyalty scheme provider would give both the retailer and the charge point operator access to valuable insights into a customer’s shopping and driving behaviour.
Advertising is another potential source of revenue, with adverts for particular brands and products delivered to drivers on a payment terminal screen or via a mobile app while their payment processes. And, increasingly, some supermarkets deploy unattended retail units such as vape vending machines, Starbucks fridges, and Costa Express self-serve machines, often utilising car park space that would otherwise go unused. A charge point could offer drivers a digital code for a discount at one of these machines to help promote their offer.
Seamless payment experience
Supermarkets are in a prime position when it comes to monetising large EV charging deployments. Not only do they have large estates, significant capital investment, and considerable public trust, but they have also entered the charging market at a time which allows them to pick and choose from the best software and hardware available on the market.
To make this work, they will need to utilise cloud-based digital payment platforms that allow charge point operators to bring everything together. This will enable them to set terms behind the scenes and allow them to offer discounted charge rates and cut-price food and drinks, serve advertisements, and accept payment for goods from unattended retail units.
By bringing this together in one digital space, it also means payment for these services can be offered through multiple methods, not just through the charge point or its associated app, but through anywhere that is able to integrate.
As more parties get involved such as charge point operators , retailers, and third party vending machines, it’s not just the front end payment, but also how that payment gets divvied up that needs to be considered. Again, a payment platform based in the cloud, can manage these splits according to pre-agreed terms – so a charge could be taken by the charge point operator, with a cut going to the supermarket for the lease of space, and a referral fee reclaimed from the nearby vending machine that benefited from the in-app discount code.
Processing payments can be complicated when multiple parties are involved. Sets of complex reciprocal arrangements must be worked out and invoiced for each month, for example, which can lead to time-consuming process requirements, not to mention the frustration of missed interest while an operator’s money sits in a third party’s account. But, by splitting and combining payments in the cloud, the right software can provide a seamless experience for drivers – helping ensure their return business.
Sainsbury’s has been very forward-looking and innovative in its Smart Charge deployment, citing a commendable desire to mitigate drivers’ frustrations around issues such as broken public chargers, too few charging bays, and speed of service. However, it – and other retailers – should now look for ways in which they can capitalise on the opportunities for generating additional revenue offered by the installation of EV charging points for its customers.
