FRN Will Fill in the Gaps for Shell

Readies new co-branded loyalty rewards network linked to department store chains

Published in CSP Daily News

By  Carole Donoghue, Petroleum Editor

HOUSTON -- Shell is preparing for the launch of its new Fuel Rewards Network (FRN), currently scheduled to make its debut around June 1 in key markets as part of a 2012 gradual rollout of the program.

The FRN is an electronic discount network that will allow consumers who shop at brand-name retail merchants such as Macys, Barnes & Noble, JC Penney and Home Depot to convert reward points they earn at those chains into instant price discounts at the pump. In all, more than 700 brand-name merchants are participating in the network, sources said.

The FRN program is operated by Excentus, the Dallas-based third-party loyalty company that is bringing the new rewards partners to Shell. The rewards are funded by the issuing retail partner--the merchant or grocery chain--at no additional cost to Shell retailers over and above the 3.5 cents per gallon they pay for the Kroger rewards deal. Markets expected to be the first to see the FRN incentive include Texas, Florida and Louisiana, where Excentus has existing deals with Shell.

Under the program, consumers pick up a free FRN Card at any participating Shell station and register online at fuelrewards.com. They will then be able to add and combine rewards they earn from purchases at FRN grocers, FRN Dining, FRN Online Mall and FRN e-coupons and spend them to fill up at the pump. They can stack up their rewards or spend them as they earn them, up to a maximum 20 gallons per purchase. They will be able to track and manage their rewards online.

There is also a new option that will allow Shell retailers to issue their own site-exclusive rewards as well. Wholesalers will be able to customize offers across 300-plus pre-selected products, including coffee, fountain drinks and car washes, in deals they can negotiate with their own vendors.

Shell, which is trying to drum up support for the new rewards plan among its marketers through a series of kickoff meetings, says more than 80% of marketers who have enrolled in the FRN program have also opted to issue their own Shell rewards.

Shell calls the new loyalty program a "game-changing" initiative and will use it to fill in the gaps in its existing grocer rewards coverage. The company signed the industry's first grocery loyalty program with Kroger in 2009 that covers 31 states, and has added to its network Giant and Stop & Shop on the East Coast, Winn-Dixie and Bi-Lo in the Southeast and several smaller grocers on the West Coast.

But even with such a large footprint, Shell has been able to offer loyalty deals at only 8,000 of its 14,000 stations in 120 markets. The FRN network will allow consumers who don't have access to one of Shell's existing grocer partners to build their own rewards through other big-brand retailers. Depending on their spend, they may even be able to accumulate discounts worth more than the 10 cents per gallon Krogers and the other supermarket chains offer.

Shell's grocery rewards offer has been a hit so far, according to Shell. Some 3.5 million Shell customers use their loyalty card to redeem discounts, said one executive. Of those, 2.5 million were new to Shell and purchased an average of 21 gallons a month. The one million existing Shell customers who have started to redeem grocer rewards are now buying six gallons more every month, Shell said.

In other Shell news, the company is warning marketers that it is not offering any free DVD or iPhone promotions and that callers contacting stations purportedly on Shell's behalf are operating a scam. "You should advise all dealers and site personnel not to disclose any information to this caller," Shell has told wholesalers.

Houston-based Shell Oil Products US, a subsidiary of Shell Oil Co., has a network of approximately 6,100 branded gas stations in the western United States. Shell Oil is an affiliate of the Shell Group. Shell Oil is a 50% owner of Motiva Enterprises LLC, along with Saudi Refining Inc. Motiva refines and markets branded products through approximately 8,200 Shell-branded stations in the eastern and southern United States. Royal Dutch Shell plc is incorporated in England and Wales, with headquarters in The Hague.

Keywords: 
loyalty