Declining Fuel Demand Requires Fresh Thinking

Nearly two-thirds (62%) of consumers say they actively compare prices when looking for fuel.

August 08, 2023

This article is brought to you by Upside.

upside-logo.jpgSixty-seven percent of consumers report being more mindful of their spending, only buying what they need and curtailing impulse purchases, according to a recent survey from Upside, a retail technology company. Even though most Americans would consider buying gas an essential purchase, fuel demand is down and has yet to catch up to pre-pandemic levels.

“It’s never going to be 2019 again,” said Kevin Hart, senior vice president of fuel, Upside. “There is simply less demand for fuel in the United States, and there will continue to be over time. However, that doesn't mean that convenience and fuel retailers are doomed to become unprofitable.”

Hart says that inflation, the uptick in remote work, electric cars, more efficient cars and the proliferation of on-demand delivery have impacted how often consumers are purchasing gas. People are also price-shopping when it comes to fuel. Nearly two-thirds (62%) of respondents said they actively compare prices when looking for fuel.

Rewards and loyalty programs are also influencing consumers. Nearly half (44%) of consumers say they have signed up for a company’s loyalty program to save money. A substantial eight in 10 consumers say they have shopped at a specific retailer because of the rewards they offered. And the type of rewards matters. Upside’s survey found that two-thirds of consumers say the rewards’ value is key in their decision-making process. Cash back was the preferred reward for consumers.

“Consumers want to see an immediate monetary benefit when they are shopping at a particular c-store,” said Hart.

So how can convenience retailers still win in this current fuel environment? According to Hart, it all comes down to acknowledging the significance of price shopping, leveraging the potential of rewards programs and identifying the right partner to help acquire and retain customers, which is where Upside comes in.

Upside allows fuel and convenience stores to expand their customer reach through digital initiatives, resulting in increased sales and profit. Upside’s top-rated app and network of partner apps deliver personalized promotions to millions of consumers, ensuring that these potential customers purchase from participating stations instead of the competition.

“The key here is personalization. I may get a different promotion than you based on my credit card transactions on the app,” said Hart. “Instead of giving everyone a blanket promotion or lowering your sign price to compete with the business across the street, you can still aggressively acquire new customers without giving away more of your profit than you need to.”

Learn more about how Upside helps c-stores acquire new customers in the age of declining fuel demand without sacrificing profit in the Thursday, August 10 edition of NACS Daily.

Also, check out Upside’s recent report, “Thriving in a Declining Market: Strategies for Growing Your Fuel Business.”

This is the first installment of a two-part NACS Daily series on how fuel retailers can use personalized digital promotions to increase profit and loyalty. Learn more about Upside.