It's hot outside, and with gas prices remaining low, more people than ever are taking to the road.
Lower gas prices mean more cash in consumers' pockets, and that means opportunity for retailers to capture a greater share of wallet during every customer visit. According to the results of a National Association of Convenience Stores (NACS) survey of convenience retailers released in April 2016, low gas prices are driving increases in convenience store sales, both at the pump and inside the store.
In fact, 67 percent of retailers said that in-store sales in the first quarter of 2016 were higher than first quarter 2015 because of lower gas prices, and 59 percent said that fuel sales were higher compared to the first quarter of 2015.
Bottom line: The price of gasoline significantly impacts customers' spending decisions when they stop to fuel up. And that spells opportunity for retailers.
While some c-store retailers are happy to take what comes, others are planning to capitalize by being smarter and more analytical. They're paying attention not only to competitor pricing at the pump and in the store but also to traffic patterns, dayparts, weather, holidays and vacations that change up customers' schedules. They're also taking a hard look at their merchandise mix and in-store offerings, from QSR to amenities, asking themselves if they are answering their customers' wants and needs.
Use the Price of Gasoline to Motivate Retail Purchasing
There's no possible way you can encourage every customer on the forecourt to enter the store, but you have an opening. So how do you motivate those higher in-store sales? It's as simple as finding the connection.
To really discover how fuel pricing influences in-store sales, your teams need an integrated view. They need to be able to see pricing fluctuations, site volume and retail sales data all in one place.
By integrating your POS and ERP systems, you can surface previously hidden insights.
For example, imagine that you always sold more soda when fuel was priced two cents less than the nearest competitor location. But, counterintuitively, you always sold less soda when the difference was only one cent. The promotional tactics you create based on that kind of insight can make the difference between a good quarter and a not-so-good quarter. Make the connections and you'll be on your way to implementing more profitable fuel and promotional pricing.
Analytics based on site data go beyond being predictive. They become prescriptive decision support. Imagine accurately forecasting sales trends based on fuel pricing or identifying competitive trends that allow you to take action on key opportunities. By understanding the link between forecourt and store, you can achieve durable retail sales results — through the price of gasoline.
Learn more about how data analytics can help inform your fuel and convenience retail pricing strategy.