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COLORADO SPRINGS, Colo. — Thirty percent of fuel retailers actively use daypart pricing, and 50 percent of those who use fuel pricing software actively use daypart pricing, according to a new research report from PriceAdvantage, a fuel price management software company and division of Skyline Products.
The report was produced in collaboration with Schneider Electric and Petroleum Pricing Consultants. It contains insights collected from more than 130 global fuel marketers, who discussed how they are or are not executing this strategic pricing strategy.
Daypart pricing is defined by the execution of scheduled price changes during set windows of time throughout the day/week to maximize margins and volume.
"We suspected that many of our customers were leveraging daypart pricing but we wanted to learn more precisely how this strategy was being used within our customer base and in the market overall," shared Chip Stadjuhar, president and CEO of Skyline Products. "What we learned was very powerful."
When examining store count, retailers who have fewer than 10 stores make up 36 percent of those who conduct daypart pricing, followed by those with 251-500 stores and 1,000-plus stores, both at 17 percent.
Monday, Thursday and Friday are the most common days that fuel retailers execute daypart pricing, and $.02 is the average change. Thirty-eight percent of survey participants change price twice daily, and 64 percent say shifts may go up or down based on their goals.
Major commuting roads are the most effective sites for daypart strategy, followed by inner city locations. Among those who use daypart pricing, the top perceived benefits are fuel margins, followed by fuel volume and a competitive advantage.
"For these fuel retailers, their No. 1 goal when using day-part pricing is to achieve margin targets," shared Brian Milne, energy editor and product manager for Schneider Electric, who analyzed the survey results. "So we weren't surprised to learn that the most common day of the week for this strategy is on Monday. It allows the retailers a window to adjust to the wholesale market and maximize margins. The second most common days were Thursday and Friday, when retailers adjust their prices to hit weekly goals — either those target margins or needed volumes."
The full report can be requested here.