AN EXPLORATORY STUDY ON FACTORS THAT INFLUENCE THE ADOPTION OF SELF-SERVICE FUEL STATIONS IN JOHANNESBURG: MOTORISTS’ PERSPECTIVE

The main objective of this study is to determine motorists’ perspectives on the adoption of self-service fuel stations (SSFS) in Johannesburg. The present research was quantitative in nature and a five point likert scale questionnaire, based on the motor-vehicle type used was distributed to potential respondents who were Johannesburg motorists above the age of 18. The research focused on the adoption of these self-service fuel stations by assessing the general attitudes and perceptions of motorists on the innovation. Data was analysed using SPSS 22 and AMOS 22. Findings have revealed that motorists generally accept the adoption of such innovations provided that they understand the benefit from the functionality of adopting such innovations should they be introduced. Results from the study also revealed that motorists are more likely to consider adoption of Self-Service Fuel Stations provided they perceive such facilities to be useful and enhance their service experience at service-stations. Key terms: Self-service, motorists, innovation, adoption INTRODUCTION Over the years, many service providers have used technological service innovations in their operations and business models, especially self-service technologies that enable customers to produce and consume services electronically without direct contact from firm employees (Meuter, Ostrom, Bitner and Roundtree 2003; Nijssen, Schepers and Belanche, 2016). Furthermore, Nijssen et al. (2016) have confirmed that they have gained considerable market share, especially in Western retailing settings. The petroleum industry is an important industry for South Africa as it makes a significant contribution towards the country’s GDP (Matsho, 2010). However, like many other industries in the country, the petroleum industry is not immune to strikes and go-slows which have become more pronounced over recent years (The Economist, 2012). This situation has consequently caused a number of problems for service stations as most do not have complete control of the environment that their businesses operate in, making it difficult for them to meet set targets and ensure that greater profit margins are realised over time. The adoption of SSFS may help to reduce the inconvenience that motorists often face when industrial action occurs. The concept of adopting self-service fuel stations was first introduced to the United States market in the early 1930s, although it became increasingly popular in the 1960s (Jakle and Sculle, 2002). The initial adoption of these stations was relatively limited due to the fact that, in most cases, petrol attendants were the only people who were legally sanctioned to make use of the petrol machines at service-stations due to fears that adopting the new system would create fire hazards in neighbouring communities (Jakle and Sculle, 2002). However, the American market continued to adopt self-service fuel stations, with 40 percent of gasoline sold under the Citco-Brand being sold at such outlets by 1977 (Jakle and Sculle, 2002). Over the years, countries such as the United Arab Emirates have also begun to adopt these self-service fuel stations, with 15 service stations introduced by the Emirates Petroleum Product Company on the 12th of December 2013 in an effort to increase convenience for motorists (Sambidge, 2013). PROBLEM INVESTIGATED Due to the need for an increased service level, service providers have moved to the adoption of the selfservice culture to provide services to their customers (Zain and Idris, 2015). The adoption of self-service fuel-stations in South Africa is a fairly new research topic as a result there is a dearth of knowledge surrounding this research area within a local context. Prior research on the use of self-service fuel stations has been done within an American and Asian (Malaysia) context (Johnson and Romeo, 2000; Zain and Idris, 2015). Authors such as Molefe (2006) merely highlighted the potential problems associated with entering the highly saturated but potentially lucrative market, particularly the costs associated with setting up and tapping into existing distribution channels. Furthermore, Molefe (2006) had mainly looked at consumer motivations towards the use of self-service fuel stations but the present goes further in assessing their viability research. Abdelaziz, Hegazy and Elabbassy (2010) concentrated on the adoption of self service centres in retail outlets and international airports for the convenience of travellers without specifically considering the adoption of self-service fuel stations. Consequently, not much research has been made to establish the feasibility of creating self-service fuel-stations in emerging economies such as South Africa in order to ensure a more reliable, convenient and costeffective service is made available for Johannesburg motorists. RESEARCH OBJECTIVES Primary objective The study aims to determine the factors that influence the adoption self-service fuel stations by focusing on motorists’ perspectives on the adoption of these facilities in an effort to increase motorists’ intrinsic satisfaction and foster consumer loyalty. Empirical objectives The current study has the following empirical objectives. 1. To conduct a quantitative study on motorists in Johannesburg in order to determine their perception on the adoption of self-service stations in South Africa. 2. To review literature on the successful adoption of self-service stations in countries such as the United Arab Emirates and United States of America. 3. The research also evaluated some of the various elements that may affect the adoption of selfservice stations by motorists such as Do-it-Yourself tasks and activities. 4. To analyse data collected from the questionnaires distributed to motorists in the Johannesburg region by using the SPSS 22 and AMOS 22 statistical software. 5. To draw up conclusions on motorists’ perception of self-service fuel stations based on the output from the SPSS statistical software. Literature review The fuel industry is largely regarded as competitive which is why the fuel-pricing is closely monitored in order to retain customers who have become more price sensitive recently (Litman, 2011). It has been noted that an estimated 30% of motorists are price-sensitive and often willing to travel an extra 10 minutes to save on the price they have to pay for fuel (Grogan, 2012). Moreover, service stations are largely characterised by low profit-margins Grogan (2012), which limits opportunities for growth and presents a number of challenges for fuel station owners who would be looking to make their businesses more sustainable. Oil prices have unfortunately continued to increase over the years and may continue to do so due to the general global economic growth which has consequently led to an increase in fuel demand (Fournier, Koske, Wanner and Zipperer, 2013). In South Africa, oil prices tend to fluctuate depending on a number of factors that include the levels of demand and supply (which have recently been perpetuated by economic growth in many emerging economies such as China and India) as well as the Dollar-Rand Exchange rate which would mean that a weaker rand increases the general price of fuel in the country. Political unrest in some of the oil producing countries particularly the Middle-East region as well as weak protection of investors rights in oil producing companies has also lowered the amount of potential investments in the oil industries, resulting in the lower supply of oil in relation to demand and this has consequently led to the increase in price of fuel (Ratner and Nerurkar, 2011). The fuel industry is one of the most important industries in South Africa as it largely contributes towards the GDP of the country’s economy, with an estimated contribution of over 2% of the GDP (Swart, 2010). The fuel industry in South Africa has grown tremendously since 1954, when it was fairly underdeveloped, to a point where it became the second largest oil refiner on the continent, after Egypt (Wakeford, 2013). The country has also continued to develop significantly since 1994 and has grown to become one of the most developed African countries and Africa’s second largest economy, after Nigeria (Hinshaw and Mcgroarty, 2014). In light of these rapid changes and developments, there has also been a shift in demand for products and services within the South African consumer product and services market which has increased the energy consumption in most sectors of the economy. The three largest consumers of energy in the country are Industry, which accounts for 41% of the energy consumption, Transport, which accounts for 28% of the energy consumption in the country and Residential areas which accounts for 17% of the energy consumption and it has been noted that crude oil accounts for 10% of all the energy sources (Department of Minerals and Energy, 2005). SSTs create unique value propositions for the consumers which are largely centred on convenience and creating new experiences that arouse consumers’ cognitive senses, yet at the same time, helping to cutdown operating costs for firms and the final consumer (Castro, Atkinson and Ezell, 2010). Like many Self-service technologies (SSTs) that have directly affected consumer behaviour and the way in which a number of service and product companies interact with the 21 century consumer (Wang, Harris and Patterson, 2012), Self-service technological innovation has continued to grow tremendously within the fuel industry in most developed countries. This has largely been due to the need for fuel stations to cut down costs and increase capacity to generate more revenue. The self-service fuel stations have been widely adopted by a number of developed countries such as U.A. E, USA and most European countries over the years. A number of self-service fuel stations are available in various markets, with most located in public places for the convenience of consumers. The concept o