by John Keller | Oct 1, 2014 | Fuel Price Management, Fuel Pricing Strategy, Fuel Pricing Technology, Fuel Software, Industry News
The October issue of NACS Magazine has a great article “Weathering the Storm” discussing how weather impacts both fuel and in-store sales. Perhaps the best quote in the article is this: “As a stand-alone discipline, focusing on weather impact seems perhaps overstated, but as part of an overall retailing strategy it is essential, especially when it comes to reinforcing your brand’s value.”
The importance of incorporating weather into your fuel pricing strategy is a concept we at PriceAdvantage have embraced for a long time. It is in this vein that PriceAdvantage offers a free weather widget that not only shows current weather conditions at the store location, but a six day forecast, and a three day weather history as well. Ice storm in the forecast for Dallas? Prepare for virtually no traffic on that day. Nor’easter predicted to hit Boston this weekend? Plan on increased traffic exiting the city for home ahead of it, and increased skier traffic to the mountains after it.
Weather is a critical aspect of retail fuel pricing that makes optimization economic models on their own simply not good enough. Economic models are based on all things being equal. Introduce a random major weather event, and suddenly all things are not equal. Successful retail fuel pricing strategies must incorporate the wisdom and insight that only the fuel analyst and field intelligence can provide. That’s what we mean when we describe the “art and science” of fuel pricing.
NACS board member Chris Gheysens says in the article “It’s time to see weather as an opportunity … Understand what it does to you and solve for it going forward, coming up with different strategies.”
by John Keller | Sep 12, 2014 | Fuel Price Management, Fuel Pricing Software, Fuel Pricing Technology, Fuel Software, Industry News
The Pinnacle Summit 2014 event in Dallas this week provided the perfect venue for Pinnacle customers to learn more about the upcoming multi-faceted PriceAdvantage integration. Response to the integration announcement was overwhelmingly positive.
The Pinnacle integration is scheduled for release in Q4 of this year and includes the following elements:
- Pinnacle Palm POS: PriceAdvantage price changes can be executed at the Palm POS. This is now the sixth POS system that works with PriceAdvantage.
- Pinnacle Palm POS: PriceAdvantage receives periodic volume feeds from the Pinnacle tank monitor web service to allow fuel analysts to see fuel sales in near-realtime and make adjustments to fuel pricing strategies throughout the day; get aggressive with margins to make up lost volumes from the morning so as to regain those volumes during the evening commute; leave prices alone if volumes remain strong despite competitive market moves downward.
- Pinnacle Manager Workstation: PriceAdvantage collects fuel and merchandise sales by store for performance reporting to understand customer profiles and market trends in consumer behavior. These kinds of reports can help understand whether or not, and to what degree, fuel sales impact in-store sales.
The folks at Pinnacle are working closely with the PriceAdvantage team, and the upcoming solution promises to be very powerful.
by John Keller | Sep 5, 2014 | Customer News, Fuel Price Management, Fuel Pricing Software, Fuel Pricing Technology, Industry News, PriceAdvantage
There’s a great article on CNBC about how “mom and pop shops are flying to the cloud“, explaining how small businesses are now able to leverage cloud technology and bypass large infrastructure investments to level the playing field against much larger companies.
Nowhere are we seeing better examples of this than in the c-store industry, where c-store chains of 100 stores and under are using PriceAdvantage for fuel price management.
Back in early January of 2012, Parker’s was an early adapter of PriceAdvantage in the cloud, managing retail fuel pricing for their stores. Then it was Volta Oil in June of 2012 for their 60 stores, followed by Flyers Energy for all their locations in December, 2012. Then in 2013 it was five more c-store chains deploying PriceAdvantage in the cloud, including Kocolene, Family Express, Slidell Oil’s Purple Cow Stores, Vintners Distributors, and Sam’s Mart.
In 2014 we’ve added several more PriceAdvantage customers to our cloud environment, including Pic-n-Pac, Speedy Q Markets, J & H Oil, and Kwik Chek Food Stores.
Our cloud customers love that they can leave the infrastructure setup to the PriceAdvantage team, and have their fuel price management solution up and running so quickly. Upgrades to new versions are a snap as well, and require little to no IT resources on their end. And since all our cloud customers are using Rackspace servers, we can all trust that the data is safe and secure.
Gone are the days when only the largest companies can afford the investment required to install and maintain a robust fuel price management system. The cloud solution of PriceAdvantage with Rackspace makes it affordable to everyone.
by John Keller | Jul 23, 2014 | Customer News, Fuel Price Management, Fuel Pricing Strategy, Fuel Pricing Technology, Fuel Software, Industry News, Retail Fuel Margins
According to an online article on the Barron’s site today, “CST Brands, one of the largest (c-store) operators, could ring up impressive gains for investors….Damian Witkowski, an analyst at Gabelli & Co., puts the private market value of the shares at $48. That’s nearly 50% higher than Tuesday’s close of $32.94. While that valuation gap might not close right away, in the next year the stock could jump 20% as earnings improve.”
Why is this analyst so bullish on CST Brands? Because of how well CST is managing the balance between fuel margins and volumes. “Since its spinoff from Valero ( VLO ) in May 2013, CST has been boosting fuel margins and opening new larger format stores under its Corner Store moniker…CST has been seeing success from its strategy. As an independent retailer of fuel, CST has been able to focus on improving fuel margins, rather than selling more fuel, as it had when it was part of Valero. In the March quarter, margins jumped 19% to 10 cents per gallon, from the same period a year ago.”
To what can we attribute this fuel price management success? PriceAdvantage, which CST Brands began implementing in July 2012, finishing the rollout by the end of that year. In the latest earnings report, retail fuel margins before credit card fees were$0.139 per gallon, up from $0.116 per gallon for the same period in 2013. Though volumes were down year over year, something easily attributed to the overall decline of fuel volumes in the industry, I wrote a blog article about the success CST Brands is seeing as they manage the balance between fuel margins and volumes.
The fuel team at CST Brands is a great partner of Skyline Products, both on the PriceAdvantage side and the Electronic Price Sign side. The CST Brands fuel team has worked closely with the PriceAdvantage team to help us develop the best-in-industry volume, margin, commodity, and competitor analysis interfaces. The benefit to the rest of the industry is that these interfaces are provided as part of the standard set of analysis views available with PriceAdvantage. These views are not custom one-offs that cause problems with future software upgrades – they are standard out-of-the-box features that pose no grief with upgrades.
We’re proud to work so closely with CST Brands, and look forward to including their ongoing wisdom and insight in future versions of the PriceAdvantage software.
by John Keller | Jul 21, 2014 | Customer News, Fuel Price Management, Fuel Pricing Technology
Greg Parker, President and CEO of PriceAdvantage customer Parker’s, explains the constant evolution of the c-store industry in this exceptional article of Convenience Store Decisions.
In the article, Mr. Parker talks about how Parker’s embraces technological advances to serve the customer. One example is how Parker’s has become ‘data-centric,’ always focused on in-depth analysis of numbers, such as sales to purchase, SKU analysis and sales to gross profit.
PriceAdvantage plays a key role in the fuel business at Parker’s, providing the rich analysis and fuel price optimization to manage the Parker’s brand. Watch a brief video with Jeff Bush where he discusses the way he uses PriceAdvantage to manage fuel at Parker’s.
by John Keller | Jul 11, 2014 | Fuel Price Management, Fuel Price Optimization, Fuel Pricing Technology, Industry News
Here’s something many people may not know: fuel efficiency improves during the summer months. NACS provides an excellent explanation here, with four key reasons displayed below:
A number of factors, all weather related, can increase fuel efficiency by as much as 10% during the summer months, regardless of the type of fuel purchased:
- Engines are more efficient: In the colder months, it can take longer to start a car and multiple cranks of the engine waste fuel. In addition, many drivers give their cars a chance warm up, whether to defrost windows or heat the interior. This idling detracts from fuel efficiency. But even without this idling, car engines are less efficient when cold. It may take a while for a cold engine to achieve peak efficiency and on extremely cold days it may never achieve peak efficiency. Overall, engines perform much better when outside temperatures are 90 degrees, not 20 degrees.
- Ice and snow detract from mileage: Ice and snow can hurt mileage, whether on the roads or on a vehicle. Cars are likely to spin their wheels under icy conditions, reducing mileage. Also, drivers tend to travel at less fuel-efficient speeds under poor road conditions brought on by extreme winter weather. In addition, any snow or ice on a vehicle adds weight and makes the vehicle less aerodynamic — as does any weather-related grime on the vehicle. One more thing: Hot air is less dense than cold air. All things being equal, a vehicle is more aerodynamic travelling through hot air.
- Better tire pressure: Tires lose air pressure in colder temperatures. If a tire’s air pressure isn’t adjusted in the colder months, it will be flatter and increase resistance and friction, leading to reduced fuel efficiency. The opposite occurs in the warmer months, and fuel efficiency can increase.
- Lubricants perform better: A car’s oil is more viscous (thinner) when it is warm and engines perform more efficiently when oil is thinner. The same holds true for all other lubricants. In addition, people take better care of their vehicles when it is warmer outside. They are more likely to change the oil and conduct other routine maintenance that can improve fuel efficiency.
