forecourttech podcast
Meet the movers and shakers of the forecourt technology world and find out more about the challenges and successes of working in the fuel & convenience retailer industry.
Hosted by Ralph Cochrane
Produced by event.video
forecourttech podcast
Episode 5 - Frederick Beckmann, CEO of Q1 Energie AG
Ralph Cochrane talks to Frederick Beckmann, CEO of Q1 about their autonomous store in Germany, why he thinks we're only at the beginning of the AI revolution and his work with start-ups and innovation at SmartCityHouse including an announcement about their collaboration with forecourttech for our event in October.
Podcast host: Ralph Cochrane
Produced by event.video
Welcome to this episode of forecourttech, the podcast, and I'm with Frederick Beckmann, who is the CEO of Q1 amongst many other companies and initiatives that I've seen, Frederick. First of all, welcome to the podcast. Just tell us a little bit about your background and what you're working on at the moment.
Frederick:Thanks, Ralph. Thanks for having me. Good to be here. I'm CEO of Q1 in my main focus as you already mentioned. Besides that, I'm also managing director of. The smart city house, which is a startup accelerator, which we, about which we will for sure talk in the next couple of minutes as well I'm very sure. But your question was what we are currently working on. This is among other things project, which is very cutting edge technology. It is a fully autonomous store, which we launched in February this year. At a site, which is not connected to a convenience store or not connected to a fuel station, which is our main business at Q1, we operate more than 230 sites in Germany, but we opened 64, The smart store in an area which is surrounded by many startup companies and technology oriented companies, cls to the local universities as a standalone 24 7 store operated only by, by cameras and intelligent shelves. That's AI based in ai. That's, generates a virtual basket when the consumers enter the store. And it's very interesting to see where this technology goes. No, we opened it beginning of February. We already solved the first issues with. Technology and are at a very good level of learning. And now move to the next phase of scaling up but have very good and interesting feedbacks from customers and think it will be. A very major development for the future of our business. Don't know yet where it goes.
Ralph:This is fascinating. I think it's going to be really fascinating to a lot of people. So the first question that I would ask about it is why do you want to go to a fully autonomous business?
Frederick:It's always a question about opportunities and the technology has emerged at such a level. As we can see it today making it possible to realize autonomous stores and everything that is possible and feasible and also economically suitable will succeed in the end. If it delivers a value for the customer and the value for the customer is a tremendous as An autonomous store can heavily increase the convenience factor. It becomes just much more elegant to, to shop. And on the other hand, the whole industry has a very strong pressure of labor availability and also rising labor costs. So it's not a question of willing to push technology. It's. A certain need that we have to move to be able to deliver our value proposition in the future. That's why we are doing it.
Ralph:And the experience that people have when they walk into the store. Can you just talk a little bit more about that? So you mentioned a virtual shopping basket. You also mentioned AI. As I walk in, what is the kind of experience that I will have?
Frederick:It's a mixture of, if you walk in for the first time, it's a mixture of a wow effect and feeling robbing the store because it's so seamless. You walk in, take the product out of the shelves and leave. You go straight away. And then directly after that, you get your receipt and in the app. And if you take a look at the app, you will recognize it. If not you have yeah, no, no idea what you've done.
Ralph:So you already know who the customer is as they walk in the door. I guess the door can't be opened unless you know who they are and they've got a payment method.
Frederick:Exactly. You have to register either with your payment card, a credit card or debit card or you have to register in the app. Say, you open the door of the store with a certain identifier and then enter.
Ralph:And are you seeing each shopper buying more things? Cause I, in my mind, if I haven't got that restriction of going and queuing and having to pay the cashier, maybe I'll pick up a sandwich, crisps, chocolate more things. What is the data showing you? I know it's only been a few months, but what are you seeing? As you mentioned, we
Frederick:are still very early in the learning process. What we can see is a certain trend for certain products. But we do not see any basket effects yet. That's. That's too early and we are not in the phase of advertising bundles and taking influence on the customer behavior in that way. That's a phase we will only start in the next couple of months.
Ralph:I think that'll be fascinating, won't it, to see the data and just give us a sense how big is this trial store that you've opened.
Frederick:Oh, it's like a oversea container. So, about 30 cubic meters.
Ralph:Yeah. So reasonable size, but not huge. So it's something that I think a lot of forecourt operators can relate to.
Frederick:It's a, if a focus on main products especially fresh snacks, like salads, sandwiches wraps. Then of course, coffee to go cooled drinks beer and wine. And also yeah, groceries for the daily needs, such as milk and eggs, and then some sweets and snacks, that's all. That's it.
Ralph:I think you would have so many of our listeners wanting to come and see this This first installation, it's fascinating because you just mentioned fresh food. So for a lot of operators, that's actually a bit of a challenge. We had Christian Warning from The Retail Marketeers on the show in episode one. And he was talking about how he likes to go to Ireland. To see what they're doing with food, because they're ahead of, for example, the UK. And I find it interesting that you've gone for fresh food, because that's a perishable good. It's harder to maintain. How are you dealing with the logistics of refilling the shelves if there aren't any staff? So many questions I think are really interesting about what you're doing.
Frederick:Yeah, fresh food is definitely a challenge. And it's also a big challenge in the supply chain. You mentioned Ireland, the market is much more developed in supplying fresh foods. The German market isn't yet. Say it's not that easy to receive a broad variety of fresh products in your Established supply chain, say what we did for the smart store is identifying specific supplies for fresh products, which offer a very high quality standard, because we believe if you offer fresh products, it has to be the best offering we can make for the customer to, to gain the confidence in our offering. And on the other hand, Q1 stands for quality first. So we can only offer the best products and nothing else to, otherwise we would lose trust in our brand. However, yes, it is difficult to deliver fresh food, fresh products. We identified certain supplies. We operate the smart store, actually. As a satellite store that is connected to a service station that is nearby, it's a two kilometer drive about between the station and the store as a satellite say delivery goes that way. The products arrive at our station. Then the grocery logistics arrive, the fresh products arrive by a different delivery. An employee from the service station goes to a car, takes the products he received from the specific supplier and follows the truck with the rest of the Of the goods that are supplied and then everything is being put into the shelf. So yes, it's quite a challenge to, to do that.
Ralph:I like a couple of things you've said though. One is using your existing stores as a hub for these satellite stores that have got the new technology, the autonomous stores. And I think also. The fact that you're selling this new autonomous store to people, because as you can hear from my accent I'm British. I'm also Irish as it happens. So I am a big fan of what's going on in Ireland. But for me that there aren't many autonomous stores in the UK. I have experienced it, particularly in places like New Zealand where I've worked. And your immediate thought is, Oh, I can't get a coffee. I can't get so actually unmanned stores, not autonomous. You can't get a coffee. You can't get a croissant in the morning or a Danish pastry, whatever you want. You're now offering something for that. How have the German public responded? To what you're doing. What are people saying about this new store?
Frederick:People are very curious and open minded and that's not normal for the German customer, which is normally very conservative and very slow in adapting new technologies. The location is also. Very optimal for launching such a concept, because as I mentioned, there are many technology oriented businesses around the universities are close, say. many open minded people in the surrounding. Nevertheless it seems that the hurdles to use this technology are so low or on the other hand, the convenience factor is so high that people are very keen on, on making use of the technology is it solves a very basic need and to be honest, there's also no, no other convenience offering nearby in, in that area where we launched the store. So we have really yeah, optimal surroundings.
Ralph:Yeah. And I imagine German people as well. You talk about perhaps the more conservative nature, but you're also, I think you were all born engineers, aren't you Germans? At least that's the reputation. So I imagine there's also a bit of interest. In what you're doing and thinking how does it work? And then when you experienced less friction, you want to go back.
Frederick:There's actually high interest in what's going on. And we could really. Find it out. I'll say the weeks before we started our store, people were always very curious and asking, it's going to start. And over the day when the store wasn't open yet, but it was already on the final site, but five to 10 people every day were already. They're each day asking when it's going to start. So that definitely shows the interest.
Ralph:Yeah that's fascinating. And what are your plans for the future? So you've opened this first store. Are you planning to open more?
Frederick:As I said we will see where it goes. Of course we can imagine to open more such stores as a stand alone on the one hand, but also. Connected with mobility hubs, which is our core business. And what's our main interest, of course say our basic approach is to master the technology, to learn about customer behavior. How it is different to, to, to a normal store how it can be influenced. And then take the learnings and see if it's economically feasible to implement this technology in our existing network and transform it to a hybrid service offering.
Ralph:Absolutely fascinated. And I'd be really interested to see how it develops as well. Hopefully you'll be telling us more at Frederick. This year, but I do want to come on to some of the other things that you're involved in as well. So you glided past Smart City House. I know there are other companies as well that you're on the board of and helping to run within the gas industry. Just tell us a little bit about Smart City House this startup accelerator.
Frederick:Yes sure. Smart City House is a startup by itself, only exists for three years now. It's a startup accelerator that was founded in Osnabrück, where the headquarters of Q1 are as well. It's located on the Q1 campus. Run. By a joint venture of companies from different sectors. And it has four focus areas which is mobility, retail, energy, and logistics. So we support startups. On the one hand, but also business ideas by company building on the other hand in these focus areas. And our approach is to bring good ideas and innovation forward.
Ralph:And as part of that forecourttech and Q1. are delighted to have a partnership again around the technology disruptors award. Can you just tell us what that is? And some of the companies that typically enter.
Frederick:Yes, of course. The new technology disruptors award is an award that was launched by Q1 and forecourttech to attract startup companies and to give them visibility. Within the forecourttech, which is an environment with a broad field of senior business leaders taking part. So very high level very good opportunity to, to network and to connect with potential future customers. So it's an award to, to help startups get visibility, to give visibility for their specific solutions and products and to help them accelerate and to help to tackle the challenges facing the industry today. It's a showcase cutting edge. Technology to, to the industry leaders taking part at Forecourttech.
Ralph:And just reading from the website, I see that there's a first prize, I think of two and a half thousand euros, but there's also access to mentoring and business support, which is worth in the region of 50, 000 euros. So part of this is coming to FForecourttechand having the opportunity to speak to Business leaders and leading movers and shakers within the forecourt industry. That's for the top three companies. You've got an earlier competition that's happening in Germany in August. There's a lot on offer, isn't there? If you're a startup in the forecourt world, this is a really good way of accelerating the opportunities for your business.
Frederick:Yes, absolutely. The process is indeed stage gate process the process for participating in the award. So you have to take part at the smart city summit at first. The three best startups taking part at the smart city summit which is in August and of August the 30th, the three best will win and get the tickets to go as a finalist to fork or tech. Pitch there and the best one gets elected by the audience and the jury and the winner will then be rewarded as you mentioned with a free ticket to the smart city house accelerator program. Which is a six month program with mentoring and workshops helping to further develop the business model to get market ready, to open doors to potential customers and so on. Very high value and focused on, on getting the product and the startup to the market.
Ralph:Oh, what a fantastic opportunity. And also looking at Visiolab, who won last year, they're creators of an easy to use visual iPad POS system. So POS that promises shorter queue times. So I was interested in the areas that you're looking at circular economy also. Other aspects of the four core areas. So if you're speaking to startups right now, if they're listening to this, what kind of companies are you really looking for to enter this competition?
Frederick:We are looking for companies that solve, Cutting edge issues offer really fresh solutions for the industry. That can help the place who which adapt their products to be ahead of the market. Yeah those are the companies we're looking.
Ralph:Good luck to all of the companies that are going to enter. It's going to be really interesting to see the three that you bring to Forecourttech in October in Spain. One of the areas that I have to touch on, because you mentioned it right at the start and it's the hot topic of the year really is AI. So can you just tell us a little bit about how. You're using AI at the moment, but also what your opinions are about where we'll see more use in the future.
Frederick:In terms of AI, we're just at the beginning of a journey. I think it can be compared to a little child being at the playground and playing playing in the sand and finding out how to build specific sand cakes. We really do not know we really cannot imagine yet what the technology is going to make possible, but it's going to be really huge. One, one thing in the field of AI we are working on is. The autonomous store, which I already mentioned on top of that, we are working on a product in the field of marketing automation, it's going to be an air tech platform that is making use of camera technology as well license plate recognition. Identifying specific Recurring customers, building, building up profiles, and then bringing out targeted advertising, targeted media that can be marketed online to third parties, why Google ad technology. Say enabling additional incomes for operators on the one hand, and also. Allowing to getting to know the customer better without. Having or without forcing him to install an extra application or to apply for a customer card for a loyalty card, say again, very low profile low entry barriers. This is another topic that can be very interesting in steering the customer understanding him better profiling without getting too deep into his privacy details.
Ralph:The enabling side of AI is fascinating. I think I was talking to a friend of mine who produces health products. So these are. essential oils CBD products within the European market. And he was telling me that their latest advertising campaign, they didn't even use a camera to shoot a single product shot. They already had I think some shots previously, some pack shots as we call them in the UK and he completely used AI to create his advertising campaigns, where you're seeing it being used the natural beauty that surrounds these products. That's part of their vision. It was actually quite eye opening for me when he showed me. The start and then what they were able to do, but I think what you're talking about is also, for example, the number plate recognition would feed into the store, understanding who the customer is also the payment mechanism. So if you're autonomous store, if I already know the car, then I can potentially bill for the fuel or the recharging that the car needs. Also for the products on the shelf. Yeah. So there's a lot of enablement going on here, which speeds up. Innovation, doesn't it?
Frederick:Absolutely. And we're, as I mentioned before, just in the beginning this enablement is just one example. It's AI comes most of the times along with automation in many different fields, we will see much of automation in terms of maintenance. And operations of stations through AI. But everyone has to find out his own path and way of making use of it. I think almost everyone has already played with chat GPT and image editors and it's very interesting to see or to follow. The development from the first language models to the more advanced Chet GPT 4. 0 protocol, which we're having right now. It's so fast. It's unbelievable.
Ralph:Yeah. Yeah. How to use AI is another, in the creative process, which I'd probably get a bit more involved in. I've also seen it go. Interestingly, quite wrong as well where for example, the other day we were trying to remove a crowd from a photograph and ended up replacing it with farm animals. So we had a swan which was just, obviously we didn't understand how to use the tool properly. I want to come on to one of the questions that we ask every guest, which is past, present and future. So looking at the past, what technology. took off for you that you were involved in, or maybe didn't, maybe there's a technology that you look back on and you think we talked about that 30 years ago, but actually it never really happened.
Frederick:It's not a technology I was involved in, but it's a good example about. Innovating at the right point of time. And the product that really didn't take off and was a big fail, but years later succeeded in a different form factor was the Apple Newton, which was launched in 1993. From a today's perspective, you could say. The early iPad, but it wasn't the success story, the iPad has or had it, it was just the product that was discontinued after five years because it didn't sell. So you can have the best idea, the best product, but the market has to be ready. The people have to be ready and then it can be a success.
Ralph:Yeah, really good example and one that I am familiar with because when I first started at university, I was working on tough books and wireless pen computing and the Apple Newton was famously canceled by Steve Jobs as well when he rejoined Apple. It was one of the products that he killed. So yeah, really interesting that. Maybe the technology moved on, but also it was very niche, it's for industrial applications, or at least at the time, pen computing, Panasonic, tough books, these were the products, very expensive. Yeah really good example. We're looking at the present. What technology are you excited about at the moment?
Frederick:That's technology we already talked about. The most exciting developments are definitely going on in the field of AI. And if you ask me for a second or third place, I would repeat AI and AI.
Ralph:Yeah. That, but then where can you go for the future, which is the final part of the question. So what are you excited about for the future?
Frederick:But for the future, I'm excited about many developments. It's not only in the field of technology, but also politics and economical developments. And also then to conclude the mix of products. That we are going to offer in the future which is partly to do with technology, but also with political boundaries that are being made and also with economical developments of whole sectors and countries say will it be an all electric world? which we are going to operate. Or is it going to be a much brighter, much colorful world of different. Mobility options which I believe is going to happen. Say our strategy is. Focused on, on BVs on the one hand also investing heavily in, in fast charging infrastructure. But what we see is there will be a need for liquid fuels that are climate neutral, such as e fuels and Are there similar products as well in the future, say development that is very interesting to follow?
Ralph:Final question for you. We always ask our guests to leave a question for the next guest on the show. So the question that I have for you is if you imagine it's the year 2030. So we're in the future by what, six years, what does the typical consumer want from the forecourt? So do you believe that EV is going to take over? You've just said you see a mix, which I think a lot of us do, but as you walk onto the forecourt, what do you think it's going to look like in 2030? And will it be much different to what we see today?
Frederick:The customer in 2030 and from my point of view, 2030 isn't that far away. It's just five and a half years. The customer will see a very similar forecourt today, but he will see much more interaction opportunities with the forecourt through technology. He will have the feeling of a Very much high convenience level. Because he is going to receive very individualized offerings and communication, and furthermore the difficulty with supplying fresh products in Germany. There'll be better solved. He will have a much better high level product offering of fresh and healthy food options and thus be willing to spend more time on site. Waiting in the shop while his car is charging or using the stop bar with this combustion engine propelled car to, to have a break for himself to, to use. The time to, to reset his own battery with fresh coffee, check some mails and then return his trip.
Ralph:It's interesting, isn't it? Looking at consumer behavior, but that's all we have time for on this episode of the full court tech podcast, Frederick, I want to say big thank you. And if anybody's got any more questions, I know that you'll be both at the new technology disruptors award. In August and forecourttech in October. But Frederick, thank you so much for joining us.
Frederick:Thank you, Ralph.
