Insights

OLA Energy creates retail destinations in Africa

ola energy convenience store redesign

Posted on 11 February 2022 in ; ; ;

OLA Energy, the multi-national energy company, has a new strategic direction. The business, which operates 1,250 service stations in Africa, is transitioning from fuels retail to a retail hub selling fuel.

Heading up the new strategy is Amged ElHanbali. He joined OLA Energy as head of retail in 2019, following a 24-year career in the retail fuels industry with ExxonMobil.

As such, ElHanbali has first-hand experience of the change in market direction and new consumer trends.

“I’ve been really lucky to see the transformation of this industry – moving from a fuels focus to a retail focus and putting the customer journey at the centre of the offer,” he says.

And he’s a pragmatist too. ElHanbali recognises that fuel is simply a category, just like coffee within convenience and forecourt retailing, but if you want to succeed you need to ensure you have the best equipment to deliver the offer; be it a great coffee machine or great fuel pumps.

New brand identity and vision

ElHanbali was approached by OLA Energy’s management to lead a new RVI (Retail Visual Identity), which blends energy and mobility with technology and a modern, consumer-friendly proposition.

“It was a brilliant opportunity – OLA Energy is really ready to take the lead and spearhead the industry transformation in Africa,” he says.

The new strategy has focused on OLA Energy’s forecourt and site layouts and has spawned a new field of focus – the ‘backcourt’ i.e., the convenience store, incorporating OLA Energy’s marhaba c-store brand plus new QSRs formats including drive-thrus.

But it’s an extremely considered and targeted approach with retail development tailored to specific regions within Africa.

“We have been very cautious about the differences between North Africa and Sub-Saharan Africa,” ElHanbali explains.

North Africa sites in Egypt, Tunisia and Morocco, for example, feature convenience shops alongside multi-national food and beverage brands. The c-stores major on core convenience categories including confectionery, snacks, cold drinks and ice cream.

In Sub-Saharan Africa, service stations in markets such as Cote d’Ivoire and Cameroon, are treated as places which African people will visit to spend time with their families or to simply ‘hang out’, ElHanbali says.
As a result, the shops are on a smaller scale but sell more staple grocery items, i.e. milk and bread, than mainstream c-stores.

This proved to be a boost during the Covid pandemic, since these shops were able to meet consumers’ daily needs, ElHanbali says. They were also convenient, nearby and considered to be much safer, less crowded store environments.

However, development continues apace and in one large location in Cote d’Ivoire, Pizza Hut now sits comfortably alongside the O’ Good Food restaurant, which focuses on local food. The pizza brand is driving exposure to Western culture but not to the detriment of the local player.

“They are both helping each other and the site has become a destination for local flavour and international flavour,” ElHanbali says.

Further, the arrival of an international brand drives the local brands to improve their own existing high standards, he adds.

Category management

In terms of the shop offer, OLA Energy has partnered with international retail design consultancy Shopworks to introduce category management principles and improve its store layouts to enhance the customer experience and shopper journey.

According to ElHanbali, the tie-up with an outside consultancy provided a legitimate way to bring its own retail partners – Simbisa Brands in Kenya, SoftBuy in Egypt and O’ Good Food in Cote d’Ivoire – on board and receptive to the expert advice and recommendations.

Shopworks has helped to deliver powerful insights, as managing director Craig Phillipson explains.
“marhaba at Parklands in Kenya, for example, was well stocked but just not operating to the level it should do.”

The business was particularly strong on alcohol and bakery but grocery lines were weaker. Shopworks has helped deliver the 5Cs: cigarettes, confectionery, crisps, cold drinks and consumables, he says.

“We have repositioned the store to get it on everyone’s journey plan,” he states, adding that there is also a big opportunity for coffee.

ElHanbali agrees. “The coffee category is not big in Africa and the habit of having it as a drink during the day is not huge but it is going to be the future. Egypt used to be a tea country but now coffee is becoming a big category,” he says.

“We want to be the pioneer and pace setter and will be waiting for the consumer to come – it’s about connecting the dots and young people are connected to the whole world via their phones,” he says.

“Our partners are enthusiastic about the new sites and how to position this category. They have started to champion this and other new concepts, which are helping the offering.”

More choices, more customers

OLA Energy is giving consumers more reasons to visit its sites across its estate. In Egypt, for instance, the latest locations now feature Starbucks alongside marhaba’s own brand coffee plus an offer from Krispy Kreme. This encourages customers to use sites across the day parts – morning, noon and night. The Starbucks brand has also had a halo effect on the overall business. Since its introduction, visitor numbers have doubled and sales of Marhaba coffee and sandwiches have grown by 40% as the sites have become destinations, ElHanbali reports.

In a similar vein, the business now offers Mobil oil, alongside OLA Energy’s own oil brands, to create a ‘lubricant hub’. Such moves can significantly impact traffic and footfall with numbers growing by up to 50%, ElHanbali reports. Crucially, the local brands benefit from the boom as well as the new players.

“It’s the name of the game – if you add more offerings and choices, more consumers start to choose,” he says.

The potential in Africa is huge too, ElHanbali adds. Unlike Europe, Africa is a less competitive and mature market so there’s still plenty of opportunity for further segmentation and consumer growth; especially due to Africa’s growing population, which is tipped to double by 2050.

And, Africa is tipped to catch up fast, not least because the country’s young people are as equally well-connected, via their mobile phones, as their counterparts in Europe and they follow the same trends.

“Countries may have a shortage of electricity but we have noticed how keen people are to charge their phones and be connected. That’s helping a lot and accelerating the change when it comes to Africa,” ElHanbali says.

Covid pause button

While Covid has had a devastating health impact around the world and disrupted retail in all markets, ElHanbali concedes the pandemic gave OLA Energy the chance to halt operations and regroup during its rebrand across 1,300 service stations in Africa.
“Covid put the whole world on pause and caused the acceleration to slow down a bit, which helped us with our transformation and developing the right offering without pressure,” he says.

It also spurred on the launch of new QSR drive-thru concepts in Egypt and Tunisia plus delivery services in Egypt, Tunisia, Cote d’Ivoire and Cameroon; with OLA Energy benefiting from its focus on grocery products and proximity retailing. Sites in Egypt also offer online ordering for the retailer’s Broaster brand of fried chicken.

The business has also secured partnerships for online shopping with Jumia in Senegal and Uganda. These enable customers to pick up Jumia orders from OLA Energy fuel stations. Customers in Kenya and Uganda can also access lubricants via the platform for collection at OLA Energy sites.

“Those elements give us an edge during the Covid pandemic and we will look to replicate that in other markets,” ElHanbali says.

With the brand change under its belt and the fresh positioning as a retail destination selling fuel and lubricants, OLA Energy has been able to create a one-stop shop for car services offering everything from lubricants to carwash, tyre repair and auto-care working with the likes of Bosch and Pirelli.

Sites have been automated too and linked to the OLA Go loyalty programme in order to extract customer data and drive added value.

Solar energy has been introduced at some sites in the company’s mission to create hubs to support the surrounding neighbourhoods and the retailer is providing EV charging for motor bikes in partnership with Porsche and assessing the future opportunity of this model for last mile logistics.

According to ElHanbali, the tie-up with an outside consultancy provided a legitimate way to bring its own retail partners – Simbisa Brands in Kenya, SoftBuy in Egypt and O’ Good Food in Cote d’Ivoire – on board and receptive to the expert advice and recommendations.

Future plans

Looking ahead, it’s no surprise to hear OLA Energy is planning to give customers more reasons to visits its sites.

ElHanbali reveals the company is planning to add gyms, together with a spa and hairdresser, to its largest service stations in Cameroon.

And, while the company’s new strategic direction means the business will be keenly focused on scaling the new offering across the portfolio, a franchise concept is also on the drawing board.

ElHanbali says OLA Energy already has the ‘playbook’ for its concept, which spans the branding, forecourt, c-store concept and offer and that a franchise partnership could add value to sites for independents and entrepreneurs who operate four to five sites in Africa, for instance.

“We have the know-how and playbook for good locations, who have the capability but lack the muscle to develop partnerships – we can bring more value to those sites and help to raise the standard in Africa.”

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