Galp transforms network with new concept stores, digital technology and people

Galp, the multi-national, integrated energy operator headquartered in Lisbon and Portugal’s leading service station retailer, is on a transformation journey.

The business, which has a total retail network of 1,475 service stations, of which 1,276 are in Iberia (Galp has a leading position in Portugal and top tier position in Spain), has a three-pronged approach focused on new concept stores, a digital platform, and its people.

The drive is being led by Joao Diogo, who has enjoyed a 20-year career at Galp, leading the B2C Commercial in Iberia since 2021, and Country Manager in Galp Spain since 2017.

Digital transformation

Galp started transforming its network five years ago following the launch of new digital platforms, which upgraded existing customer experience and communications, optimizing management support functions and interactions with partners and dealer network. According to João Diogo, this meant moving from time-consuming paper-based systems to streamlined digital solutions. This has enhanced time to market agility, freeing up teams from bureaucratic, administrative tasks to become more customer focused and facing.

Galp has started to roll-out new store concepts and to explore new formats supported by analytics and segmentation. It introduced an unmanned site concept, Galp & Go, with a new style of canopy, which lets light flood onto the forecourt. Galp & Go is a fully automatic format defined for highly competitive micro-markets without a c-store. Enhancing digital technologies, Galp is implementing features that enable customers to pay for traditional services, like car wash, using their phone; while vehicle recognition technology lets drivers pay for fuel without even leaving their car. These technologies are common today and appeal to time-strapped customers, with different buying targets, João Diogo says.

Cafeteria and coffee focus

In convenience retail, Galp has a leading position in Portugal with its tangerine c-store format and a long-standing partnership with the leading Portuguese food retail business, Sonae. Together, the companies have tested a number of concepts including an extended convenience offer or mini-market formats, João Diogo says. In the Spanish market, some competitors tested mini convenience-market concepts. “We decided to a go a different way, launching a cafeteria-style concept, with strong partners (illy on the coffee side) and a high-quality food assortment,” João Diogo adds. Pastries and freshly baked bread are emphasized in the new format alongside coffee but Galp has maintained a presence in convenience retail too, offering a carefully curated product assortment to meet shoppers’ needs.

Restaurant expertise

In Spain, Galp has partnered with the leading travel catering operator, Areas, to offer foodservice at highway locations.

The company has also launched Galp branded restaurants with its own chefs and menus for key sites along long-distance routes with offers targeted at customers crossing Iberia from Portugal to France. These sites are fully operated by Galp and offer tailored, time of day menu selections to appeal to travelers. Locations are Galp branded, but space has also been given to brand partners such as illy, or Amazon for lockers, and ING for cash-back transactions.

Mobility and Lifestyle hubs

Recently Galp introduced further segmentation for its future service hubs in Portugal, distinguishing two sub-segments: Mobility hubs and Lifestyle hubs.

Mobility hubs are located in high transient areas and commuter belts and will offer new energies, as well as micromobility solutions, such as e-bikes and e-scooters. Lifestyle hubs are located in urban areas and will cater for a more extended break with a sophisticated c-store, places to rest and co-work, plus EV charging. João Diogo says Lifestyle Hubs can be scaled to a larger or smaller format, depending on location and market potential.

Galp opened a small format Lifestyle Hub concept in 2021 at a train station in Lisbon. The store offers a modern cafeteria, serving food from 6.30am to 8pm, alongside coffee and pastries and other daily essential assortment.

The store offers numerous options for food-to-go or food-to-stay and addresses different customer journeys and needs. In 2022 Galp expects to transform more than 150 Iberian stores covering three key formats:

1. The basic intervention will be for smaller sites, which eventually will not have a c-store but will be transformed in terms of digital technologies. These will include unmanned sites like Galp & Go and will feature electric chargers and lockers.
2. Upgrades will be for those sites that have a small c-store – less than 70sq m. These sites will also provide restaurants and cafeterias.
3. Hubs – standalone hubs will be similar to the one at the Lisbon train station or Telheiras Mobilty Hub recently opened in Lisbon. They include a full c-store concept, with fuel or in certain cases a 100% electric mobility charging site, together with micromobility, click&collect, or specific services like dog wash. 

Post-pandemic uptick

Post-pandemic, Galp is in a strong position. Being open and available to consumers during the crisis was key as c-stores were a last resort for convenience products, João Diogo recalls: “We took that opportunity to reinforce our link with the customers because we were always there,” he says. Coming out of the pandemic, the number of transactions has not dwindled. Our costumers reinforced Galp as a destination not only for tobacco but for a breakfast, a simple coffee or eventually a fast meal, he says. A tie up with delivery providers including Uber Eats was another plus.

“That was also important for us,” Diogo says. “Ice cream, for example, became a top selling line in that period.” C-store business is consistently recording double digit growth versus three years ago. João Diogo credits much of the uptick in sales to the c-store upgraded sites. “Previously forecourt locations were perceived as old fashioned, not clean and expensive. Now our customers are choosing us even if competing with other food retailers” he says.

New energy

Behind all this change on the customer interface is a broader tectonic change that is transforming the energy industry, and to which Galp is fully committed. Already Iberia’s second-largest solar power producer, Galp has committed to direct half of its capex in the coming years to renewable energies and to low-carbon businesses. It plans to invest heavily in green hydrogen, which will allow it to produce a wide array of zero and low-carbon fuels, while also kick-starting a lithium battery value chain with Northvolt.

This path is already visible at the retail network, as Galp is the leading operator of electric vehicle charging stations in Portugal. Many of its sites in Iberia are also generating the electricity they consume through autonomous solar plants – a concept that Galp is also already offering to many households, companies and energy communities in Iberia. “We are trully committed with the energy transition in our journey to regenerate the future”, Diogo says.

Smart Convenience  

Technological innovation continues apace too. Galp is opening its first unmanned, self-checkout smart concept store. Located in the Lisbon area, Galp smart store is testing an autonomous store solution in a controlled environment. The solution provides a check-out free service through an integrated system that comprises a network of proprietary cameras, sensor fusion, computational units and computer vision algorithms. Their goal is to empower stores to be autonomous and check-out free thus unlocking a seamless shopping experience.

This pilot will include features that are new to Galp and its customers. The data generated using this technology will be insightful for Galp’s engagement with the client and improve Galp positioning in our customer journey.

Galp is currently changing its PoS systems to provide a fully integrated experience for its operators and customers. According to the company, this will enable stores to identify customers as they arrive on site and to personalise their in-store experience with dedicated offers and promotions; as well as provide a seamless payment experience.

People piece

Of course, none of the above could be achievable without a focus on people and teams. Joao Diogo readily admits the transformation would not be possible without an upskilled staff. Indeed, Galp Commercial’s team has a specific department dedicated to excellence. The new store concepts require new profiles and skills, so training and working tools need to be adjusted to a new customer journey. Safety and customer service are paramount for Galp to succeed”.

There’s no doubt that Galp will rise to the challenge and continue its service station transformational journey.