The World's Unsexiest Business
adding a little sizzle to the convenience store industry
Let's call it a duel between brand iconography: a newsletter with unique typography set on a signature peach yellow colored paper versus a web 3.0 multi platform ecosystem replete with price scraping deterrent technology (yes, I've tried albeit unsuccessfully)
For the former, the business model largely relies upon a grassroots movement style heavy handed collective effort of an army of call center 'analysts' (I wouldn't want to offend anyone here by the relegation of staff titles) reaching out to hundreds upon thousands of convenience store owners and operators for supplier and retail prices to collect data to repackage and sell. Integrity seems to be maintained through human 'second pass' common sense and perhaps passive verification.
For the latter, let's call it decentralization at its best (or worst) with a contributor base that teeters between altruistic price informer and competitor manipulator. Sometimes the lines become blurred as evidenced by what seems to be none other than price sabotage while other times consumers simply need to be made aware of a hard to refuse deal at the pump. Revenue is measured in terms of views, clicks, downloads, and subsequent aggregate advertising dollar spend. The integrity of such a system is reasonably kept intact by a distributed self policing effort and something akin to open outcry: if you don't like it or think it's right, someone (human or perhaps bot) will eventually reign in the forces of 'checks and balances' to restore order.
Both company leaders ensure their respective public presence need no fanfare yet their ubiquity as de facto market authority personalities and experts on prices at the pump has largely remain unchallenged for years. But for the sake of dispensing accolades, a 'skin in the game' honorary award might very well be handed to Trilby simply for her longstanding family name having become synonymous with the data itself.
I’ve purposely omitted nearly all analysis on the gas station side of the CSGS economics equation because it’s been covered quite extensively by various industry publications among other internet media outlets. However, the reason I want to address fuel tank temperature correction is that for gas station operators in Southern California during the summer, depending on how high the mercury can soar, this can be a sizable (albeit somewhat predictable) windfall.
But how do you maximize its contribution to your bottom line?
For this narrow three month window, it may be more worthwhile to consider a more competitive pricing strategy which will enable to you to sell more gallons thereby increasing the potential for more temperature corrected fuel deliveries. But to be able to do so you’ll need to determine the most optimal reduction in margin which hinges on correctly forecasting price elasticity.
Simply stated, how many pennies of margin do you reduce for each daily thousand gallons that you’d like to sell more of?
Ideally, you want to be able to preserve as much penny margin (per gallon) as possible for each incremental gallon sold.
Mathematically, here are the variables you’ll need to optimize:
Plotting out a cross section of how a sample of 15 locations have performed over a two year period (2014 - 2016), notice how there isn’t a uniform drop in margin for each incremental 1k gallons. The reduction in penny per gallon margin starts to ease as we approach 10k gallons per day of throughput.
Not too long ago, our beloved country (United States of America) was engaged in an arms race of rather epic proportions. And we're definitely not talking about one borne of blood, sweat, and hernias demonstrated by sweaty lululemon types flipping monster tires down Melrose Avenue. In case there was any confusion, that's the one both showcased and witnessed at your local cross-fit gym. The indisputable serious kind of race is the one that had the potential consequence of being 'game over for humanity'. And while it may have seemed to be more of a competition over who wields the biggest stick rather than what that big stick could actually destroy, it definitely was not not be taken lightly. Because back then, a contingent of influential social media users weren't able to poke fun at it.
And then meme it to death.