C-Stores and Their Customers Are at the Mercy of the Oil Market Virtually no other major commodities are more difficult to predict than oil and motor fuels. During most of 2018, a robust global economy increased oil and fuel prices, and then signs of a slowing economy and other factors caused a market plunge during Q4. During early December 2018, the U.S. Energy Information Administration forecasted double-digit decreases during 2019 for West Texas Intermediate, 16.4%, or $54.19 a barrel, and Brent crude, 15.2%, or $61 a barrel. Despite these downward forecasts, there are many US and global factors that could change them quickly, including a US/China trade agreement, the state of the global economy and its effect on stock markets, Middle East tensions and oil production.

2019 Consumer Fuel Prices to Remain “Affordable” Of course, the volatility of the crude oil market directly affects the price of gasoline and diesel fuel at the pump; and convenience stores sell approximately 80% of all motor fuels in the US. At the beginning of January 2019, gasoline was selling at less than $2/gallon in many places, but, according to GasBuddy’s 2019 Fuel Price Outlook, the projected national average for the year is $2.70/gallon, with the typical increase during the summer. 2019 US gasoline spending could total $386.0 billion, compared to $388.5 billion during 2018, or yearly household spending of $1,991 for 2019 versus $2,016 during 2018; however, there are scenarios that could increase the price to $3/gallon.

More Driving Sells More Fuel According to data from the U.S. Federal Highway Administration, the total vehicle miles traveled in the US didn’t increase much during the first 9 months of 2018, from a total of 3.213 trillion miles during January to 3.218 trillion during September 2018. The latest research about Americans’ driving habits indicated 66% were driving less during 2017 than 2016 – higher motor fuel prices was the likely cause. Not surprisingly, 40% of men said they drove more than women (20%) because of their jobs. Where drivers lived also affected how much they drove, with 36% of residents of Southern states driving more because of their jobs while those in Northeastern and Midwestern states were least likely to drive more because of their jobs, at 20%.

Low Price Drives Most Americans’ C-Store Choice According to a May 2018 National Association of Convenience Stores (NACS) report, Americans fuel their vehicles almost as much during afternoon hours (3–7pm), or 35%, as they do during midday (10am–3pm), or 36%. The report also revealed 57% of consumers preferred to buy fuel at a specific c-store brand or chain during January 2018, compared to 49% during 2017. Although price continued to be the most important factor when consumers chose where to buy gas, it has decreased in importance, from 61% during 2017 to 58% during January 2018.

Who Is Using a Mobile App to Buy Fuel? According to a November 2018 PYMNTS.com/GasBuddy report, 49% of consumers use mobile apps to find and pay for gas and 43% said the primary reason is convenience. 73% of mobile-app gas-purchase users said they are likely to shop at a c-store with a mobile app and 82% want an app that allows them to pay for inside-store purchases. More than 54% of consumers who use a mobile app to pay for gas are men, 72.8% are employed, their average age is 40 and their average annual income is $67,400.

A Mobile Fuel-App Could Generate Billions More in C-Store Sales Although 49.4% of consumers with a mobile app used it for gas-related purposes, such as station locations and hours of operations, just 4.5% actually used it to pay for gas, which is only $2.8 billion of the more $360 billion in fuel sales at all c-stores. According to the PYMNTS.com/GasBuddy report, c- stores could potentially generate another $22 billion in sales if they promote their mobile apps more aggressively, as approximately half of surveyed consumers said they weren’t aware of their availability. The survey also revealed gas-app users and those who pay for gas with an app would visit c-stores more often if they could use their apps to make purchases at the pump and in the store, or 38% and 57%, respectively.

Advertising Strategies It may be beneficial for c-stores with a mobile fuel app to promote its availability through traditional media, as many consumers aren’t aware of this tool. Ad messages should highlight the convenience of the app and how it can also be used for inside purchases. Local C-store chains with locations strategically placed on routes from the suburbs to the largest employment areas could distinguish their brands by focusing on how drivers can find many of their locations on their regular route from home to work to home. As consumers become more attracted to curbside services at retailers and restaurants, c-stores in upscale neighborhoods may want to offer delivery of in-store purchases to customers’ vehicles, so they don’t have to walk inside and wait in line.

New Media Strategies C-stores may find it advantageous to use social media to help educate and inform consumers/customers about how the motor-fuel market works, including the forecast for motor-fuel pump prices, why prices increase during the spring, etc. C-stores could also use social media, especially curated content, to promote local and regional travel by motor vehicle to generate more motor-fuel purchases, and possibly cross-promote with destinations/attractions. With significant potential sales via a fuel-app possible, c-stores may want to conduct an online survey/poll to determine whether their customers would use such an app and motivate them to visit the store more often and purchase more fuel.