WOG’s top manager Oleksandra Danilenko: the 2019 main retail trend is the implementation of any form of self-service
WOG is Ukraine’s largest mono-brand network of gas filling stations. At the same time, WOG is one of the largest retailers, coffee and hot-dog sellers in Ukraine. Thus, the company is actively developing related services and networks, in particular, WOG CAFE and WOG MARKET. At present the company’s network numbers 450 objects in Ukraine. In addition, WOG is one of the pioneers and innovators from a technological point of view. This fact is proved by Real Innovation Award the brand got last fall in London.
We talked with Oleksandra Danilenko, Retail director of WOG’s network, about business, market, trends and innovations.
Back in 2013, your company decided to focus on retail by ‘capturing’ trains and airports in a short period of time. What strategy will you work with? Where will you expand WOG’s presence next?
We keep following the chosen development course. The company plans to open new filling stations, at present time we are looking out locations for them. We are working on a new format to combine all the company’s services our customers got accustomed to in one spot. Of course, we are also thinking on launching new products.
In the same way as before, we will continue delivering tasty meals to passengers travelling by 16 Intercity high-speed trains in all directions. By the way, last year WOG CAFÉ in the high-speed trains issued 2 million receipts, sold 1.8 million hot drinks, 800,000 cold drinks, 860,000 hot-dogs and fresh sandwiches. At the same time, the average receipt increased by more than 30% compared with 2017.
In addition, just recently, on the eve of the New Year, WOG CAFE started working at Boryspil International airport. The opening of the café at the Lviv airport is on the way. It is worth mentioning that now our team is currently preparing the company's development strategy for the next 3 years.
How do you measure the customer experience of your network clients?
A simple and effective way to learn customer loyalty is NPS survey. We conduct this research regularly. According to the latest data, NPS index for WOG’s filling stations is 63%.
In addition, we build on research conducted by Nielsen Holdings plc (NYSE: NLSN). It is a global company that provides services on measuring and improving business results, and is a key source of information on what consumers watch and buy.
Thus, according to a study by Nielsen Shopper Trends Petrol Stations conducted in Kiev in 2018, WOG holds leadership in the market.
Such high consumer ratings prove that the company is moving in the right direction.
In January WOG’s filling station network launched a cash withdrawal service for PrivatBank cardholders. How relevant is this service for Ukrainian consumers? What is the reaction of customers and employees?
Indeed, this year we became the first in Ukraine to launch a pilot project at our filling stations - a unique service allowing you to withdraw cash while paying for purchases by credit card at the cashier. We are implementing this project in partnership with PrivatBank and Mastercard. This service has already gained popularity in other European countries. It is an innovative project for us, however, we are sure that it will be also in demand in Ukraine.
For its part, the company tried to simplify the cash withdraw procedure while using the service. In order to use the new functionality the only thing the customer needs to do is to pay for the goods with a credit card and inform the cashier about the desire to withdraw cash. At this stage of the project, the maximum amount of cash withdrawal per transaction is 500 UAH, regardless of the purchase cost.
I am glad that now every our client, regardless of the geography, can use this service. For example, a man finds himself in the village of Sofievka, Dnepropetrovsk Oblast, with no cash he needs to pay for tire fitting. Of course, neither ATM, nor bank branch, can be found around. However, he can call at WOG nearest filling station where he can withdraw money from PrivatBank card and pay for the necessary services.
As it turned out, this service is quite popular. We hope that in a short time the service will become as open and accessible as possible to cardholders of other banks.
Last year, WOG PAY application won the Best Retail Project award. How did customers rate it? How much has the average receipt changed?
The users were very positive in their reaction to WOG PAY application. Everything is simple: the service really helps customers fill their cars comfortable and quickly. The application allows customers to pay for the fuel without going to the cashier, standing in a queue and leaving the car.
As a result, almost a quarter of active users of our mobile application fill their cars using this service. After all, if the main goal of the client is to fill the car quickly and go further, the service is ideal for them. In addition, we are currently preparing an update version that will expand the possibility of services in cashless context.
We also know that after filling a car with WOG PAY used the most customers come at the filling station to purchase coffee or other beverages. Therefore, in the near future such customers will get an opportunity to buy coffee right next to the coffee machine without going to the cashier. Therefore, we plan to expand purchase range at the filling station network so that our clients could pay without going to the cashier. In turn, it will decrease burden on the cashier and reduce the queues.
Talking about figures, the average amount of fuel paid with WOG PAY service at a filling station is 18% higher versus PRIDE loyalty program in general. At the same time, the average amount of fuel paid with the service at a filling station is higher by 5% versus the rate of customers who use PRIDE card from a mobile application (QR). In addition, the average receipt is growing gradually. In 2018, its rate increased by 6.5%.
While launching the service on the market and being pioneer in this direction, we were faced with a number of challenges such as: to increase people's awareness of the possibility of fuel payment without leaving the car; to educate customers on the service use, as well as to overcome the fears and stereotypes existing in our country regarding online payments. Of course, we managed to accomplish a lot of goals, however, we still have something to work on.
The goal for the current year is to expand WOG PAY brand line, to develop and optimize the service itself, to spread knowledge about the service and its new specifics as much as possible. Moreover, we intend to increase the number of customers using the service and receipts while keeping an average receipt on amount of fuel sold at a filling station in cash equivalent.
Do you plan to launch new products? Tell more about them
We have recently launched an absolutely new mobile application PRIDE. We created it completely from scratch and added all the changes that our users had recommended. We changed both its architecture and design. The main focus is made on the balance of bonuses as the client’s capital that he can accumulate and spend. We added new functions in WOG PAY service such as WOG PAY Kava and WOG PAY Hamanets. Both of them expand the possibilities of contactless purchases. Now you can both pay for the fuel without leaving the car, and buy coffee or tea just at the coffee machine without going to the cashier. Among other innovations are an online store in the application, phone number authorization, use of Touch ID, Face ID, Fingerprint and much more. We are convinced that the new specifics and updated old ones will expand both the application user base and increase the frequency use for the benefit of the client.
As of the new application work results, we get a lot of positive feedback from users.
We are sure that our customers will be satisfied not only with the new experience of using the application, but also with those promos and special offers that we are preparing exclusively for “priders”.
To date, the number of fuel payments with PRIDE card in a mobile application reaches 20% of all fuel purchases under the PRIDE loyalty program in general. I have to say that we set a goal to increase this figure up to 35+%.
In October 2018, WOG’s network hit the top-best employers in Ukraine. What corporate policy do you follow? How does it affect sales?
We focused on trainings for all our staff, from top management to the lower level employees (the top-down approach). Training programs are developed by coaches of our training center. In the future the coaches train middle-level staff, regional and local managers. Finally, the filling station managers, operators and assistants get this new knowledge too.
It is not a secret for us that Ukraine is currently faced with difficulties, there is an outflow of personnel. Many of people go abroad to earn more money. However, we believe that today it is important to pay attention both to the material component and the non-material one as well. Trainings in our company help employees to get a feel for the corporate culture, share our values and become their carriers.
Since WOG considers the client as the most valuable and the service provided as the fundamental criterion the company’s activity in 2019 focuses on these two important values. This approach will help us to instill the values in employees, to convey the corporate culture to them and, consequently, to get more income.
WOG has a lot of innovations. We have seen the Real Innovation Awards your company received last year in the UK. What innovations of yours were evaluated there? What innovations do you plan to launch in the nearest future?
WOG is actively working on the introduction of new technologies in all its services, so that every client is positively impressed each time he interacts with the brand. To this end, the filling station network actively implements innovative solutions, such as the loyalty program and the mobile application WOG PRIDE; rebuilds the communication scheme by making digital channels as priority; improves the service component of the business (for example, WOG Community service provides customer feedback in the mobile application). It successfully introduced WOG PAY service allowing the customer to fill and pay for fuel at the filling station without leaving the car. The brand also prepares new services for launching.
Thanks to all this innovation activity of the company last November WOG won the prestigious international prize Real Innovation Awards 2018 in the category ‘Masters of Reinvention Award’. The award was initiated by the famous London Business School that is recognized as the best business school in Europe. I must admit that we are doubly pleased to receive this award since WOG is Ukraine’s first company that both entered the award shortlist and won gold.
One of our plans is to implement similar services in other areas of our activity. We coordinate each step with the general development concept of WOG as a company aimed at working in customers’ benefit and we perform our activity in accordance with the ‘one step ahead’ principle.
To your mind, what retail trends will be relevant in 2019?
Taking into consideration the modern pace of life, people value their time the most. Therefore, the main thing that a company needs to focus on is the possibility to implement any form of self-service. Customers do not want to stand in a queue. They want to get services quickly. Therefore, in addition to other projects aimed at saving the time of customers, we are planning to provide mobile cash desks at 50 filling stations of our network in the nearest future. We are also considering the possibility to install fast payment terminals at the filling stations that will enable customers to pay for fuel and coffee on their own, for cash and debit card. It will save time significantly.
In addition, we will take into account seasonality. With starting a hot season WOG cafes will offer a wide range of cold and dairy drinks. Today, our natural teas are in a great demand among customers. Especially they are popular with the people caring about their health. Therefore, by this summer we will update the tea line. Moreover, despite a wide range of coffee line, WOG plans to continue developing this very drink line.
WOG group of companies is rumored to be experiencing financial difficulties and failing to service the debts.
Intensive business growth is always fraught with the need to raise additional resources. Our shareholders Sergey Lagur, Stepan Ivakhiv and WOG’s whole team take their debt obligations responsibly. Thus, ‘Forum’ bank’s rights of claim on secured loans of ‘Zolotyi Ekvator’ LLC and SPC ‘VK Impex’ (with WOG’s 32 filling stations network as the security) were purchased at a Dutch auction. Now we are waiting for an official meeting with the new buyer of the right to claim on these loans in order to work out a repayment schedule satisfying both parties.
The company pays the rest of the loans according to its all debt obligations on a scheduled basis.