Fuel Retail is a challenging sector

Retail fuel pricing teams face significant challenges. The fuel market is highly commoditised, meaning customers often prioritize finding the cheapest fuel available rather than remaining loyal to a particular brand. This relentless focus on price forces retailers to operate on rather narrow profit margins. And with volumes declining over time due to multiple factors – such as increased fuel efficiency and the gradual shift towards electric vehicles (EVs) – maintaining, let alone maximising, profitability becomes an incredibly tough quest.

Fuel pricing teams also must navigate the complex demands of multiple departments, such as Finance, Sales (Territory Managers), Marketing, and Operations. The Finance department pushes for higher prices to improve margins, while Sales wants competitive pricing to drive volume. Marketing, on the other hand, might focus on promotional strategies and customer engagement, which require a certain degree of pricing flexibility. Operations teams need to ensure that the pricing strategies are executable at the ground level, adding another layer of complexity. Balancing these conflicting priorities requires a nuanced and strategic approach to pricing.

Additionally, as new products such as EV are introduced to the market, fuel retailers face difficulties in establishing the right approach to pricing them. The EV market is still developing, and consumer behavior is not yet fully understood. Plenty of factors impact new product pricing – from the cost of infrastructure to potential subsidies, to competitor pricing. Retailers must also consider the long-term implications of their pricing strategies on consumer adoption and market positioning, making this an intricate and high-stakes challenge.

How can S.M.A.R.T. Pricing help retail fuel pricing teams?

In a sense, S.M.A.R.T. Pricing is built specifically for retail fuel pricing, born out of years of hands-on experience at Certas Energy Retail Europe and Kalibrate. The framework is built around the 5 Commandments and 6 Pillars of S.M.A.R.T. Pricing, which serve as guiding principles and building blocks, respectively.

One of the key benefits of S.M.A.R.T. Pricing is its ability to reduce operational inefficiencies. By leveraging this framework, analysts can finally focus on in-depth analysis rather than spending their time on repetitive, low-value-add tasks such as sending and correcting prices. This improves productivity, of course, but also means your pricing decisions will be driven by higher-quality insights – data-driven decision-making at its finest. This allows retail fuel pricing teams to be more nimble and agile in responding to market changes and competitive pressures, maintaining their edge in a volatile industry.

Additionally, S.M.A.R.T. Pricing elevates retail fuel pricing teams from simple task execution to becoming strategic partners within the organization. Embracing this framework allows these teams to play a crucial role in shaping overall business strategy, providing data-driven insights that inform high-level decision-making. This strategic alignment ensures that pricing actions are both proactive and reactive, positioning the company for sustained success in a volatile market.

S.M.A.R.T. Pricing in action: European Branded Wholesaler

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