LAS VEGAS -- With 160 million transactions a day and one-half of the U.S. population at a convenience store each day, it seems like knowing consumer attitudes about fuel would be fairly easy. But determining their true motivations is a science, said presenters at a 2014 NACS Show educational session on consumer perceptions at the pump, and reveals several indicators.
NACS has surveyed consumers for the past couple years on a monthly basis about how fuel prices impact their economic sentiment, and the results can be contradictory. For example, while consumers are very good at accurately guessing the current price of gas, they are not so good at remembering from where the prices are trending.
What is consistent--the percentage who say gas prices have an effect on their feelings about the economy, which hovers between 84% and 85%. And typically, price becomes a proxy for the product.
"We know off the bat that no one likes to buy gas," said Jeff Lenard, vice president of strategic industry initiatives at NACS. It's an attitude that reflects on consumers' perception of the c-store and gas station industry. Research shows the percentage of consumers who think this industry shares their values is at 69%, more than 20 points lower than grocery stores and supermarkets.
But interpreting consumer survey data can be tricky, said Ian Thompson, senior vice president of strategy at Kalibrate, Florham Park, N.J. "There's a difference between survey and real-life data," he said, noting that while the NACS consumer surveys suggest price is the most important factor, this does not necessarily mean lowest price.
"Don't confuse appropriate pricing with low pricing," he warned.
According to Kalibrate research, seven key elements drive purchasing behavior. Price is perhaps the ultimate decision point, but others--location, marketing and merchandising intelligence, branding, the facility and operations--also play important roles.
And each carry a different weight for each fuel location. Finding the order of importance is key for a retailer to maximize its potential. Thompson pointed to Kalibrate data showing that the top 20% of retailers in a market command an impressively greater share of the volume. For example, in Los Angeles, the top 20% enjoy 37% of the market volume, compared to only 8% for the bottom 20%.
How do the top get there? They measure their market efficiency and continually tweak it to optimize their offer, with those seven elements in mind. Anything from location to the flow rate of the gas pumps can impact that formula, and the savvy retailer considers them all, said Thompson.
"You'll get more customers and have a more successful business."
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