At the turn of the 20thcentury, the world population was approximately 1.6 billion people, having increased by 600 million inhabitants over the previous century. Since then, increases in GDP per capita, coupled with advancements in technology, healthcare, food production, agricultural methods and more, have contributed to unprecedented population growth. Today, that burgeoning human tide occupying the planet stands at 7.6 billion people. And it isn’t stopping. In fact, the world population is on track to reach 9.6 billion by 2050.
A simultaneous byproduct of an increasing population and improved standard of living is greater energy consumption, including fossil fuels like coal, natural gas and oil. Typically, as a country becomes more developed and economic conditions improve, sustaining the population and supporting the new status quo results in increased energy consumption. How do we know? Because per capita energy use in developed countries is much higher than in emerging economies. Case in point, with nearly 330 million residents, the U.S. is home to roughly 4.3 percent of the world’s population, yet consumes nearly 20 percent of the world’s primary energy.
So, what can we expect? In the coming decades, we’ll see a significant uptick in energy consumption—28 percent by 2040, to be exact. The growth, however, won’t be driven by developed countries like the UK and Germany. Nearly two-thirds of it will originate in developing countries—like China, India and many countries in Africa—with growing economies and a rising consumer demographic. Perhaps more significant is that liquid fuels, like petroleum-based products such as gasoline, are projected to “remain the largest energy source.” For convenience retailers in developing countries looking to stay competitive and take advantage of demand increases, here are a few things you can do.
Invest in Technology
From better reporting that provides actionable insights to automated inventory management that keeps the right products on your shelves, it goes without saying that investing in ERP software technology enables convenience retailers to effectively control every part of their operation. But let’s shift our focus to the forecourt. Besides the items on your shelves, it’s typically the fuel price sign that serves as the initial draw for patrons, and as fuel demand increases in developing countries, you need the tools to stay competitive. Fuel pricing and analytics software can help you implement effective pricing strategies that attract new customers and maximize those razor thin margins at the pump.
Invest in Infrastructure and Supplier Relationships
Bottom line…you can’t sell what you don’t have. As demand for fuel increases, you’ll be expected to deliver. If you can’t, failure can have potentially long-term consequences. Not only will your customers find somewhere else to go, causing you to miss out on valuable in-store sales, but the likelihood of them affording you another chance becomes much slimmer. So, what can you do to prevent it? A pretty obvious place to begin is boosting your inventory capacity by increasing the size of your underground storage tank at the site. Second, you should monitor your fuel sales data—factoring in seasonal, holiday or event-based spikes—to determine how much inventory you should regularly keep on hand. Third, and perhaps most important, develop relationships with reliable suppliers that have reputations for delivering quality product when and where their customers need it.
Invest in Your Brand
One of the most effective ways to attract new customers and maximize revenue as demand increases is by building a brand people love. But how do you do that? Aside from having the products your customers want, implementing a loyalty program—particularly one with a fuel component—is key to driving traffic to your store. According to the C-Store Shopper Profile 2018, 51 percent of customers said they shop more frequently at c-stores where they are members of a loyalty program. In addition, the study also found that customers prioritized fuel cost savings as the most important motivating factor in their decision to participate in a loyalty program.
Economic growth and increasing energy dependency in developing countries is already a reality, and the need will only intensify in the coming decades. While alternative sources of renewable energy are increasing in adoption worldwide, including in many developing countries, fossil fuels—from which petroleum-based products like gasoline are derived—will still hold 77 percent of energy share by 2040. Shouldn’t you plan for it?
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