by Ian Thompson, Executive VP, Global Solutions Consultancy
Automated pricing processes can feel like a risk. How will you know if your prices are optimized? Can you really depend on a software solution to boost profit? And how will you feel giving up some control over pricing tactics?
By Ethan Walker, Solutions Consultant
Utter the word "automation" in a room full of people with diverse careers and histories. Some will shudder. Some will ignore. Some will start to get excited at the possibilities. Utter it in a room full of best-in-class fuel pricing analysts, and they're liable to start clapping. While automation is sometimes perceived as threatening, scary or "too difficult," it is absolutely essential from an overall efficiency standpoint. And at the end of the day, it equates to increased revenue, which analysts and executives alike happen to enjoy.
Our high-performance race car is almost complete. We have pulled together a powerful turbo engine, great telemetry, winning powertrain, fantastic crew and the right spoilers and wings. In relation to our convenience store, we are set up for success with great facilities, the right data and analysis of the competition, excellent operations, the right merchandise and world-class pricing.
In Part 1, I introduced the analogy of the convenience retailer as a finely tuned performance car in a challenging race for volume. We explored pricing as the turbo charger, best used in short bursts for growing margin and exploiting daily opportunities, but not the best way to maintain or grow market share. We also looked at how dropping prices across the board to increase volume often results in price wars and minimal volume growth at reduced margins.
You don't always have control over your promotional items, and that means you don't always have a plan to understand their effects on sitewide sales. Your gut instinct on what works and what doesn't is a good start, but is it giving you all the strategic support you need? Access to critical, integrated data can raise your game to the next level.
When winter makes way for spring, it’s time to build. For fuel and convenience retailers, this is the season when big hopes turn into real plans and—when everything goes right—ground breaks on a new site build. It’s time to make your bet on a location, site layout and fuel brand. The tough reality? Every decision carries risk, and it may be years before you know whether your investment will pay out.
by Jude D’Souza, Regional VP — India
In markets around the world where prices have been deregulated, market-driven pricing is a regular practice. Micro-market pricing is a primary tool that fuel retailers use to stay competitive, attract customers and maintain sales volume. In October 2014, diesel prices in India were deregulated. Some established fuel retailers don’t believe market-driven pricing will emerge. They are betting that the business landscape will stay the same, even though market conditions have changed. Kalibrate, with its global experience and expertise, sees four signs that show that change — including market-driven pricing — is coming faster than they realize.
By Scott Barrett, VP Client Success
Many fuel retailers began their businesses using manual pricing practices. Internal spreadsheets or price-by-instinct may have worked in a simpler time. But today’s best-in-class retailers use sophisticated pricing tools and strategies to maximize volume and margin. Fuel retailers wanting to take this step up may believe that all their pricing problems will be solved if they choose the right software tool. And, yes, the right pricing tools are crucial — but the right technology is only one of many ingredients in becoming a pacesetter in pricing.
