FLORHAM PARK, N.J. -- An analysis of consumer buying patterns has confirmed that although price is indeed a key factor affecting consumer fuel-buying patterns, price is not the only factor. The National Association of Convenience Stores (NACS) asked KSS, a provider of retail fuel price automation and optimization, to review the group's recently released NACS Consumer Fuels Report on Price Sensitivity and evaluate the consumer responses against actual, observed consumer purchase behavior.
This research provides insights into how fuel prices at the pump [image-nocss] actually impact customers on a day-to-day basis.
Observed buying patterns indicate that gasoline consumers are not as sensitive to price differences as the survey had indicated. KSS research also confirmed that price sensitivity does vary significantly between siteseven within a brand.
The analysis revealed that individual consumer choices depend on their unique traffic patterns and micro marketsa single gas station and its immediate competitors, which consumers observe in the context of their everyday lives. A small set of stations represent the majority of customer choices, usually four to seven stations.
So understanding micro market sensitivities is crucial, KSS said. Poor price decisions at certain sites can dramatically impact margin, volume and profitability, broad-brush price tactics don't take into account each site's micro market and there is a huge opportunity to drive value at each site that retailers often miss, it added.
KSS observed a sample data set of more than 15,000 fuel sites using its PriceNet fuel price system, to determine actual consumer purchase behavior at various price points. The study findings were presented recently at the NACS State of the Industry Summit in Partnership with CSP last week in New Orleans.
By understanding and leveraging consumer insight, retail fuel operators can better serve their consumers at each site and ensure that financial objectives are met, KSS said.
Separately, a Kraft/CSP Daily News poll that asked, What do you think is the most important factor in consumers' decision of where to buy gasoline? found that more than 60% (157 out of 260 total votes) of the respondents answered price; more than 30% (80 votes) said proximity based on specific driving pattern; more than 6% (17 votes) said condition/appearance of station, store; and nearly 1% (2 votes) said, brand. The rest voted for other.
To request a copy of the full report, please contact KSS at Info@kssg.com or by visiting www.kssg.com.
Florham Park, N.J.-based KSS is a major supplier of comprehensive pricing intelligence, optimization and execution solutions to the grocery, chain drug, general retail, convenience retail and petroleum industries. The company helps retailers manage more than $70 billion in annual revenue from more than 23,000 outlets, it said. Retailers use KSS software to model, forecast and optimize the effects of pricing and promotional decisions.
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