What's Wrong with this Picture ?

Some Operators and Jobbers still don’t “Get it”

What is wrong with the picture to the above?

I took this with my celphone camera on Sunday, February 1st, while on the way to the Super Bowl get together Darcee and I were attending. We got off I-95 and needed some gas for the car, so I pulled into a prominent local jobber’s self-branded site. As I pulled up to the pumps, this sign, times eight, was looking out from each dispenser fueling point as I got out of the car. It says, in case it’s hard to read “If you don’t know your pump #, don’t expect us to Guess. Thank You.” Well, at least they thanked the customer at the end.

Where can we start on what message this sends to the customer pulling in to fuel up at this location?

Fiirstly, if there’s a real problem with people knowing what pump they are fueling on, how about switching the dark red numbers on a black background to a contrasting color? Remember, this unit isn’t subject to national branding appearance guidelines, it’s a local brand.

Secondly, you could computer print a sign and laminate it, perhaps worded with a more businesslike “Please note your pump # before approaching cashier” or something more customer friendly or appropriate. With the proliferation of computers and printers, almost any manager or employee has the capacity to get something printed with friendly wording.
And since I paid at the pump and wanted a receipt, you know what the next part of the story is... The dispenser flashed the “ Printing receipt” message, followed by the ever infuriating “See Cashier for receipt”! No paper in the dispenser’s receipt printers!

So, I headed inside to put an end to this quality customer experience at the cashier’s booth. Of course, the cashier never put down her celphone, and seemed disturbed and dismissive that I had disturbed her conversation with the “Receipt for pump 6, please” request. As I got back in the car, I told Darcee, “This is why customers love to buy gas!” Even if I had wanted to purchase something inside the store, I was pretty steamed by now. Remember, this was Super Bowl Sunday, 2 1/2 hours before the game. Prime C-Store time, if there ever was. Beer, Sodas, Chips, Dip, Candy, and people in a hurry, isn’t that what “Convenience” is all about?

Well, enough of my rant on this little incident. We all know business is getting tougher as consumers feel anxiety and concern of the state of the economy. Let’s not “Shoot ourselves in the foot” by not looking at our businesses through the customer’s eyes.

Condevco has created and rejuvenated brands and operations for many different clients in many different fields, retailing/distribution/services, so let us help you make it through. Contact Ron with your consulting inquiry. (Click Here)

Hertz Would take on Additional Risk if they start Hedging Fuel

Source Article
Hertz Looks Into Fuel Hedging to Lock In Prices, Control Costs - www.bloomberg.com (See Article)

Implications:
1) Fuel Costs are an easily passed-though item to the consumer

2) Hedging increases potential losses in exchange for incremental expense control

3) This is an unnecessary complication to a straightforward expense model

Analysis:
Hertz's announcement that it's going to look into fuel hedging as a way to control costs makes very little sense from an operational point of view.

One of the most widely known and publicized consumer price categories is "What a gallon of Gasoline costs". This should be an easily passed-through to the consumer expense.

Instead of predicting usage and betting on which way the price is going to move, it seems Hertz would be better served by making an advantageous national fleet deal with a supplier. Hertz could take a set discount from retail, or a % markup over "Rack" prices in the specific markets.

It's easy, you still get a discount as opposed to the consumer, and you can pass the costs through at the prevailing retail costs to the customer. Easy and predictable.

Additionally, the oil and Motor Fuels markets have not been behaving in easily predictable ways, certainly not in response to traditional supply and demand curves. Even distribution firms who are in the market with experts every day haven't been able to win at hedging this past year.

It seems fuel hedging is a complication that Hertz should try to avoid.

Fuel prices - the secondary market for most consumers second-most valuable property

A condensed version of this analysis was originally done for Gerson Lehrman News and posted 12/11/08
Original Article: Advertising Age http://adage.com/article?article_id=133072

Implications:
1) After a home, the auto is the second most expensive item most people own.
2) The up and down volatility in fuel prices is lowering demand, regardless of price
3) Fuel prices do impact mid and lower-mid income earners most dramatically

Analysis:
On October 20th the EIA (Energy Information Agency) listed the average retail price for regular unleaded at $2.914/gallon, and it had been on a downward trend for 6 weeks or so at the time.

In it's report released on December 8th, the average price was $1.699/gal. In 49 reporting days, (7 weeks) the price went down $1.215/Gal, or 41.6%, and it wasn't even a primary economic headline.

The CSP Daily News is reporting as of December 9th that the savings at the pump aren't translating to dramatically increased inside sales at the convenience store portions of the fuel outlets. What is going on with the consumer?

Wal-Mart (NYS:WMT) may very well be getting those savings as increased holiday sales. In late summer, when $4.00/gal fuel was being sold, the discussion being had about people needing to trade down from SUV's and minivans to hybrids and smaller vehicles was a laughable argument. Most families purchase their vehicles with consumer credit, and if you were 2 years into a 5 year loan on a SUV or pickup truck, you couldn't just adjust what vehicle you chose to drive on a daily basis.

The secondary market of vehicle costs, fuel prices, is much more volatile than the vehicle market itself. That’s why demand didn’t decrease more than it did; people were forced to drive what they owned, regardless of the cost to operate it. And having seen the automaker bailout play out over the last two weeks, there wasn’t enough alternative and hybrid production to accommodate that vehicle demand, in any case.

Fuel demand is going to adjust lower, as people have been shocked into realizing how vulnerable to energy costs their personal finances and their lifestyle actually are.

Credit was already tightening up, and the average mid-level consumer felt we were in a serious economic slowdown, even if they weren't saying it. You just bit the bullet, filled the tank to keep your transportation means on the road, and hoped prices would eventually come down. Well, now they have.

Fuel prices do impact the mid-level and lower earner most dramatically, and they are using the “savings” to 1) try and recoup some of the budget damage done to them this summer, and 2) get through the holidays without accruing too much additional debt.

The average consumer is worried about the direction of the economy as a whole. "Flash for Cash" is so last year! Wal-Mart shopping was never a stigma for the average consumer, and people "trading down" are learning what lots and lots of people have known for years. Value never goes out of style.