It might seem hard to imagine, but not so long ago, the busy boulevards of China’s most populous cities were packed with millions of citizens traveling to and from their destinations on one of the oldest modes of transportation in modern history: the bicycle.
Socioeconomic conditions are changing in Asia
Following years of economic development, the increase in disposable income in China paved the way for a different, more luxurious mode of transportation: cars. The change in public perception, coupled with government backed bicycle reduction policies, led to a decline in bicycle ownership and usage. By 2010, China had surpassed the U.S. as the largest new car market, with over 300 million motor vehicles. As trends go, an increase in per capita energy consumption—including fuel to power vehicles—typically follows drastic improvements in a country’s economic condition. Not only did we see this in China, but this phenomenon is happening throughout India and many other developing economies in Asia. These regions are projected to account for two-thirds of the world’s growth in energy consumption by 2040. In that time, petroleum-based liquid fuels, like gasoline, will remain the largest energy source.
Change brings complexity and competition in fuel pricing
As a primary destination for drivers to gas up and go, convenience retailers are increasingly challenged to intelligently navigate the complexities of fuel pricing to remain competitive and profitable in high- and low-demand environments. Pricing managers need tools to help respond with appropriate volume- and margin-based pricing strategies at the right time to attract more drivers during slow periods or maximize profits when drivers fuel up more often.
How data powers time-of-day pricing and how you use it
Capitalizing on time-of-day pricing can be a bit tricky, but getting the right result for your business is certainly achievable. Whether you’re looking to maximize margins during peak commuter traffic times, boost your in-store sales by attracting the lunch crowd with low, competitive fuel prices, or implement popular happy hour fuel pricing programs like retailers in some Asian countries, data is the key to successfully executing a time-of-day strategy. To that end, implementing pilot programs to test and refine your fuel pricing methodology will provide the data and insight you need to make informed decisions about the best go-forward approach to help you reach your goals.
How consumer behavior impacts seasonal pricing, and what you need to know
Seasonal pricing has long been a staple of successful fuel pricing strategies. Historical data has shown, people tend to travel more as temperatures increase, which leads to increased demand at the pump. The opposite is true during the winter months, though there are demand spikes surrounding some holidays. Consequently, site operators need to closely monitor fuel prices and respond to improve margins both during slowdowns in the winter months and high-volume times during the summer months. If you’re looking to optimize your seasonal fuel pricing strategy, leverage insights like historical data, trends in consumer fuel purchasing behavior and current competitive data to maximize your margins and attract more drivers.
Great things are happening in China, India and throughout emerging regions in Asia. In many ways, convenience retailers are going to benefit from these changes and can serve up better prices to drivers, so they don’t lose them to the competition down the street. Data powered fuel pricing software gives pricing managers, site operators and planners a competitive edge to ride these changes to a profitable destination.
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