by John Keller | Aug 29, 2013 | Fuel Pricing Strategy, Industry News
According to a recent CNBC article, next year we can expect to see a lot more diesel cars on the roads across the US. The 2014 US model year should have double the selection of previous years, with 40 diesel models on the market by the end of 2014. Diesel SUV’s are likely to see the biggest increase in sales.
For a long while, Volkswagen has had the majority of diesel models in the US. But GM is planning to offer new diesel models, as is Chrysler, Mazda, Nissan and Audi. Some experts predict that by 2018 diesel vehicle sales could represent 10% of all new vehicle sales.
Diesel technology typically boosts mileage by 30%, helping auto manufacturers meet federal mileage regulations. These regulations require a combined 39 mpg fuel mileage rating in the window across their model offerings by 2025.
Many diesel models can go 600 to 800 miles on a single tank, dramatically altering the behavior of gasoline consumers who stop to fill up twice as often as these models.
What does this mean from a fuel price management perspective? First, it may be a good time to start planning to add diesel to your product offering if you don’t already offer it, especially if your stores are in an area where SUV’s and trucks are popular. Second, monitor the ratio of diesel fuel sales to gasoline fuel sales from a historical perspective, and see if the current sales trends are tipping the balance in the favor of Diesel. If it hasn’t started yet, depending on your markets, you’re likely to see the shift over the next five years and beyond.
by John Keller | Aug 28, 2013 | Fuel Price Management Solutions, Fuel Pricing Software, Industry News
According to AAA, there will be a 4.3% increase in Americans driving 50 miles or more from home this Labor Day holiday. That means between Thursday and Monday we can expect to see more travelers than any year since the recession. The number of Americans driving 50 miles or more is expected to reach 29.2 million, up from 28 million last year.
From a fuel price management perspective, when comparing this year’s numbers to last year’s, it’s important to monitor fuel volumes compared to the same days of week last year, not same date, in order to make sure you are getting your share of the increased pie this weekend. Strategies may including sitting with slightly higher margins in order to make the most of the weekend, in the face of increased traffic. Or they may include going for volume to make up for lost opportunities earlier in the year.
The key takeaway is to be prepared with best-in-class fuel pricing software to make quick pricing adjustments as needed, in order to maximize the great opportunity this weekend provides. Oh, and on a personal note, it’s best to have access to this fuel pricing software insight from a mobile device so you can have some fun this weekend, too.
by John Keller | Jul 29, 2013 | Industry News, Retail Fuel Margins
According to the latest OPIS report, retail fuel margins rebounded this week, more than making up for the margin decrease of last week.
Average retail fuel margins now stand at $0.176 per gallon across the US, up $$0.076 per gallon from last week. The average retail fuel margins year to date stand unchanged at $0.177 per gallon. The retail fuels average for July dipped slightly to $0.187 per gallon. The US six week average improved $0.004 per gallon from last week to $0.204 per gallon. Average retail fuel margins since Memorial Day are $0.201 per gallon.
As we track these industry benchmark averages in this fuel price management blog, the question is, how easy is it to use your fuel software to report the retail fuel margins of your organization for each of these time frames? In Skyline PriceAdvantage, the Margin Analysis view presents a quick way to view margins across different markets, for specified commodity products, in preset periods of time, as well as ad hoc date ranges. The results appear in real time, and then can be exported for use in management reports. It is this insight that allows you to optimize retail fuel margins and volumes, market by market, and store by store.
by John Keller | Jul 24, 2013 | Fuel Price Management, Fuel Pricing Technology, Industry News
A new Mobile Path to Purchase study based on a survey from 2000 US smart phone and tablet users reinforces the importance of fuel retailers keeping their retail fuel prices current on mobile gas price sites. Gas was the answer given for the type of search by 90% of smartphone users and 87% of tablet users who were asked why did they go to the location to make a purchase. Gas price and location were the key elements of these mobile search conversions.
Industry leader xAd and long-time partner and call measurement provider Telmetrics have partnered to release first-to-market Mobile Path-to-Purchase research studies conducted by The Nielsen Company. The studies dissect consumer mobile usage and purchase behavior related to the Travel, Restaurant, Auto, Retail, Insurance, Banking & Finance and Gas & Convenience industry verticals.
The results of these studies provide valuable insights into the mobile tools utilized in the process of research and decision, and strong mobile user intent to purchase.
“Mobile is the dominant media used in this on-the-go [gas and convenience] category and while searchers are making most decisions within an hour, they are paying attention to advertising and taking time to conduct price and location searches,” said Monica Ho, vice president of marketing at xAd.
The gas and convenience retail category has nearly a 90% conversion rate for mobile users who ultimately make a purchase. “With some of the heaviest app usage and highest conversion rates we’ve seen in our Mobile Path-to-Purchase research series, it is important that gas and convenience advertisers work with marketing providers that ensure their businesses can be found in apps in addition to mobile sites,” said Bill Dinan, president of Telmetrics. “Advertisers have a chance to drive more purchases by ensuring their mobile presence is optimized with location and pricing [information].”
From a fuel price management perspective, this study drives home the point that publishing fuel prices to the “virtual signs” on the web is critical for bringing more traffic to the store. The patented PriceAdvantage SMART fuel pricing solution provides the ability to publish gas prices to OPIS and GasBuddy so that stores appear on the gas price search apps, and display the proper prices to the mobile audience.
by John Keller | Jul 19, 2013 | Fuel Price Optimization, Industry News, Retail Fuel Margins
According to the latest OPIS report, the average retail fuel margins across the USA took a nosedive this week, dropping another $0.07 per gallon to the lowest levels since February of this year.
Current average US retail fuel margins now stand at $0.100 per gallon, which is $0.20 cents lower than just two weeks ago. Retail fuel margins haven’t been this low since February 22. Year to date averages are now at $0.177 per gallon while the average so far in Q2 stands at $0.136 per gallon. The six week average is $0.200 per gallon.
This is the margin drop we anticipated – when wholesale prices increase quickly, retail prices simply cannot keep up due to consumer behavior, and fuel margins decrease. Retailers will have to make the most of their fuel software to carefully balance their volumes and margins to optimize profits as wholesale prices will inevitably stabilize and then dip lower, providing the opportunity for fuel retailers to make up for lost margins in the coming months.
by John Keller | Jul 13, 2013 | Fuel Price Optimization, Industry News, Retail Fuel Margins
OPIS reported this week that average retail fuel margins across the USA have fallen dramatically. The latest numbers reflect an average retail fuel margin of $0.171 per gallon which is a 40% drop since last week. The $0.131 per gallon decrease in average retail fuel margins is the largest drop in 52 weeks.
The year to date average retail fuel margin remains steady from last week at $0.180 per gallon and the six week average retail fuel margin dipped slightly to $0.219.
Current predictions are that retail fuel prices are going to increase in the coming weeks. That will put additional pressure on retail fuel margins, so I don’t expect the OPIS report next week to bring any good news for fuel retailers.