by John Keller | Feb 10, 2010 | Fuel Price Optimization, Fuel Pricing Technology, Industry News, Retail Fuel Margins
The new RNCOS “U.S. Convenience Stores Market Outlook to 2013” report states that the U.S. Convenience Store industry is likely to grow steadily in the next four years. This healthy outlook is largely due to the steady increase of the size of the population who are 15-64 years of age, a population concerned with convenience shopping.
According to the new research report, sales in the convenience store (c-store) industry grew an impressive 8% in 2008 and made up approximately 14% of total US retail sales.
In 2009, the c-store industry struggled along with the whole US Retail industry, due to weak consumer spending and a drop in fuel prices. But in late 2009, c-stores seemed to bounce back, and the report states that in 2010 industry sales will be healthy, outpacing the country’s overall retail sales growth.
The c-store industry grew just over 54% in 2008 over 2007 to a total of $5.2 Billion. The total c-store sales number is split between motor fuel sales of 72% and in-store sales of 28% during 2008.
That means the US Fuel Manager is overseeing $3.74 Billion in total sales. This kind of responsibility demands software technology that can allow fuel pricing decisions to be implemented quickly, without risk of human error. It’s simply too big a job to be managed with homegrown spreadsheets.
Thankfully, the Fuel Pricing software category has come of age, making available information that is impossible to glean from spreadsheets. And with Fuel Pricing software like PriceAdvantage from vendors like Skyline Products, Fuel Managers can react quickly to dynamic market conditions and maximize their revenue potential on a store by store basis.
by John Keller | Feb 1, 2010 | Fuel Price Management, Fuel Price Optimization, Retail Fuel Margins
NACS Online published an interesting article about a pricing study conducted at the University of Miami School of Business Administration, where they found a pricing strategy that resulted in a 200 percent increase in sales and a 55 percent increase in profits. An excerpt is pasted below:
“Researchers have found that retailers can increase sales and profits if they increase the price of a sale item to its original cost in gradual steps. The “Steadily Decreasing Discounting” strategy comes after the initial sale when you progressively increase the price back to its regular level versus in one shot.”
“The researchers found that SDD is more effective for two reasons: first, consumers consider past prices but also forecast future prices. So when consumers see a trend of increasing prices, they forecast higher future prices and are more inclined to make a purchase today. Second, if buyers expect prices to increase, they are more likely to make a purchase to avoid feeling regret. With the incremental pricing of SDD, increases are comparatively less significant, and the consumer is therefore more likely to buy immediately—even after having missed the initial sale.”
This research has direct applicability in the volatile pricing environment of the Fuel Manager. As the Fuel Manager adjusts his pricing upward to accommodate for higher replacement costs, he can be more effective if he steadily increases the price gradually over several days, rather than in one shot. As consumers become aware of repeated street price increases, they are likely to fill up sooner rather than later, with the reasoning that they have to jump in to the buying process now before the price of gas goes even higher.
As the Fuel Manager is monitoring the market response to these price changes, it’s more critical than ever to have access to Fuel Pricing software that can make it clear how price changes are effecting sales volume and competitive pressures at each individual store.
by John Keller | Jan 31, 2010 | Fuel Price Management, Fuel Price Optimization, Retail Fuel Margins
The c-store industry is lucky to have the PCATS (Petroleum Convenience Alliance for Technology Standards) organization to facilitate the cooperation and collaboration between customers, service providers and vendors in the c-store ecosystem. One of the sub-groups in PCATS is the Motor Fuels working group.
The Motor Fuels working group promotes electronic communication between retail fuel buyers, suppliers and delivery vendors to:
- Manage fuel inventory levels
- Minimize freight and transportation costs
- Provide speed of order placement
- Improve speed of response to demand changes
- Manage fuel pricing and monitor competitor pricing
The Motor Fuels Working Group established the standards currently implemented by retailers, jobbers and major oil companies using bills of lading, electronic funds transfers, credit card settlements, invoices and fuel pricing.
In 2010 the committee will focus on:
- Developing use cases for existing wholesale fuel and distribution standards
- Refining existing standards as needed to ease implementation
- Developing use cases for retail fuel price management and competitive price collection
- Define an implementation roadmap for new standards
Yours truly sits on the PCATS Motor Fuels working group, and I’ll be providing insight into the vendor and customer needs around managing fuel pricing and using fuel pricing software. The next meeting is scheduled to be held during NACSTech in New Orleans May 4-6. I’ll keep blogging to keep you up to speed regarding decisions made by this working group.
by John Keller | Jan 21, 2010 | Fuel Price Management, Fuel Price Optimization, Retail Fuel Margins
I just read a great interview with Stan Sheetz on smartplanet.com in their Smart People section. Mr. Sheetz is President and CEO of Sheetz, a c-store chain with 368 locations in the Mid-Atlantic states, headquartered in Altoona, PA. It’s a quick, insightful and entertaining read where Mr. Sheetz discusses the importance of using technology to be more efficient, cost effective, and closer to their customers. He discusses a new iPhone app they’re working on, automatic inventory replenishment, and what Sheetz will look like 10 years from now. Mr. Sheetz comes across as a hip and fun guy to work for, and a forward thinker.
Sheetz was recently named the #1 Retailer to work for in Pennsylvania, as named by the Best Places to Work in PA group. The group compiles employee surveys to come up with their results. Based on who their President and CEO is, no wonder Sheetz employees like working there so much
The interview may be found here.
by John Keller | Oct 16, 2009 | Customer News, Fuel Price Management, Fuel Price Optimization
Skyline Products has recently completed a pilot program, using patent pending PriceAdvantageTM software to help Sheetz reduce costs and markedly increase available customer selling time.
Mark Wilson, Director of Store Support for Sheetz, was able to achieve these results with Skyline’s patent pending PriceAdvantage software. Wilson piloted the software in 10 stores and changed only two things: 1) the ability to manage and reset electronic price signs remotely from headquarters or from within the store, and 2) the ability to remotely manage prices on the electronic price signs.
These two improvements translated into forecasted annual savings of $141,000 in service maintenance, and will increase available store manager face time with customers by up to 50 hours annually per store, across 360 stores.
“The software gave us all of that in a usable, understandable, teachable and trainable package,” Wilson says. “The smarter the systems are that we place in the stores, the better information we have at headquarters. That’s what we look for in technology today. “
“This is just one example of the tremendous return on investment that we see our customers experiencing regularly with PriceAdvantage. The payback time for the software is short, and the benefits drive directly to top line revenue and profitability.” said Greg Stadjuhar, Vice President of Sales and Marketing for Skyline Products.
Future plans at Sheetz include expanding the pilot program across all 360 stores, and integrating technologies which will allow headquarters to remotely update fuel pricing in the field at the POS, the pump, and the Skyline Electronic Price Display—all from their desktop computer, laptop, or handheld device.
by John Keller | Aug 18, 2009 | Fuel Price Management Solutions, Fuel Price Optimization
Skyline Products, long known for its high-quality electronic price displays and fuel price optimization and execution software, announces the addition of its newest Value Added Reseller for PriceAdvantage™, Radiant Systems of Alpharetta, GA.
“Using PriceAdvantage, our joint customers can remotely execute their fuel pricing strategy all the way down to the POS,” said Greg Stadjuhar, vice president of sales and marketing for Skyline Products. “. According to OPIS, the average retailer changes fuel prices four or more times per week. PriceAdvantage provides petroleum marketers the ability to instantly react to competitive market changes from anywhere and confirm—with absolute certainty—that the changes occurred.”
The patent-pending software allows petroleum marketers at corporate headquarters to remotely update fuel pricing in the field at the POS system, the pump, and the Skyline Electronic Price Display—all from their computer, laptop, and PDA.
“Centralized management has always been a key component of the Radiant solution,” said Jimmy Frangis, vice president of petroleum and convenience retail for Radiant Systems. “Bringing centralized fuel price management to our customers just made sense. With our relationship with Skyline customers can grow fuel revenue and save managers and other store operations professional’s time. PriceAdvantage customers see a tremendous return on investment in labor savings, recaptured margin and increased fuel volume.”
PriceAdvantage automates the three major components of a typical fuel-pricing process: competitive data collection, analysis, and price implementation at the store. Competitive price changes are available real-time via electronic updates from each store, third-party data sources, like OPIS; or back-office imports. Fuel managers can set up strategic pricing rules against which new competitive data is evaluated against volume and margin performance. Updates to fuel pricing can then be sent instantly to the site’s Radiant POS system, the dispenser, and the Skyline Electronic Price Display—freeing store managers to focus on customer service. By integrating with back-office accounting systems, like PDI, PriceAdvantage also includes easy-to-use pricing analysis tools to enable the pricing managers to determine price points at which store profitability is maximized.