According to the Short Term Energy Outlook by EIA released July 13, U.S. regular gasoline retail prices this summer are forecast to average $2.25/gallon. That's 2 cents lower than forecast in the previous month's report and 39 cents lower than last summer (April through September 2015).
It's easy to see that summer fuel prices currently remain low for consumers. But you know that these forecasts can change quickly. And you know that pricing is highly dependent on state and federal regulations, crude oil refinery maintenance deadlines, along with deadlines for summer fuel blend completion, movement and sales.
In such a rapidly evolving environment with rapidly evolving rules to follow, lack of pricing optimization means missing out on fuel sales your sites could otherwise gain during holiday rushes and summer travel. So what's the best way to optimize — and therefore capitalize on — those low prices?
Quick and complete price elasticity analysis.
Don't Miss Out On Incremental Profits with Summer Gas Prices
It's your job to ensure that pricing is set appropriately based on data and your company's volume and margin strategy. If someone's waiting on you for a price change, that means they aren't capitalizing on that information in the meantime, which could result in incremental profit missed at the pump.
To analyze and generate prices more quickly, you need three things from your data and pricing system: speed, holistic visibility and flexibility.
Your data needs to be delivered quickly. If you're waiting for new information, so is everyone who depends on your analysis. They're missing out on optimized pricing that could boost fuel sales volume.
To turn micro-market pricing into profits, maximize margin and grow volume, your pricing information needs to be delivered at the fastest possible speed with minimal ownership costs. If you're paying too much for just speed, your overall profits won't necessarily increase.
And remember, speed of delivery won't mean anything if the data isn't ready for analysis or already analyzed. With a combination of speed and clarity, you can capitalize on prescriptive analysis and ensure your locations are getting every possible penny at the pump.
When it comes to data, context matters. For example, without market insight, data about traffic means nothing. Without traffic pattern insight, data about consumer spending won't be hyper relevant. To get the full picture, you'll need to bring together a lot of disparate data, which can be time consuming without the right analytic systems to support you.
Holistic visibility not only speeds up analysis, but also increases relevance, so you can make pricing recommendations based on a full system view, which is more than the sum of its parts. Consider, for example, how you leverage supply and demand in your analysis, or how you take into account the potential for pricing decisions to cannibalize neighboring outlets. Each of these aspects of analysis requires holistic visibility.
To achieve consistently optimized pricing through the summer months, you need prescriptive analytics delivered quickly and holistically. And you also need the flexibility to take new data into account and execute appropriate changes immediately. Historical analysis keeps your pricing competitive; flexibility keeps your pricing relevant to current market trends, location data and traffic and spending patterns.
Reaching Your Goals with Fast Analysis
If your pricing isn't optimized during the summer rushes, your sites will miss out on sales and critical incremental profits. With systems and data speed, holistic visibility and flexibility, you can achieve your regional volume and margin goals, executing changes more quickly to enable your sites to fully capitalize on those traveler-friendly summer prices.
Want to learn more about how you can optimize your prices not just for summer, but all year round? Read about Kalibrate Pricing.