Fuels Retail Achieving high performance in a volatile and fast-changing environment - Accenture
←
→
Page content transcription
If your browser does not render page correctly, please read the page content below
Fuels Retail Achieving high performance in a volatile and fast-changing environment
An industry in transformation A convergence of changing technology, increased regulatory and competitive pressures, disruptive market dynamics, and emerging consumer trends will bring dramatic change to the fuels retail industry over the next decade. The pace of change will continue to accelerate, straining legacy processes, systems and skills. Understanding what the future might look like and having a plan to compete in a new competitive environment are essential considerations for companies looking to achieve—and maintain—high performance in the years ahead. 2
The convergence of several market are expected to continue for the of nontraditional vehicles in the
and consumer trends is fundamentally foreseeable future. This continuation coming years. According to the U.S.
changing the fuels retail industry means that sluggish demand for Energy Information Administration,
in the United States and placing petroleum will likely be the “new sales of vehicles that use diesel,
additional pressure on volume and normal” for the industry through alternative fuels, and hybrid electric
profitability. Consider the following: at least 2035.1 systems are projected to grow from
15 percent of new vehicle sales in
Falling demand Emergence of alternative fuels 2009 to 42 percent by 2035.3 As
As illustrated in Figure 1, US demand Today, more than a dozen alternative illustrated in Figure 2, flex-fuel
for motor fuel increased significantly fuels are in production and use or vehicles will represent 19 percent
from 1980 to 2005. Beginning in are under development, including of total new vehicle sales and
2006, however, demand growth compressed natural gas (CNG) ethanol 47 percent of unconventional
evaporated. The conditions that led to (E85), electricity and hydrogen.2 vehicle sales.4
this decline—stagnant US economic As these fuels gain widespread
growth, fuel price volatility, the adoption, they will present a
growing appeal of alternative fuels significant competitive threat to
and more stringent Corporate Average traditional motor fuels. This threat
Fuel Economy (CAFÉ) standards— is reflected in the anticipated sales
Figure 1. US consumption of motor fuels is expected to be sluggish through 2035.
US liquid fuels consumption
(million barrels/day)
History 2009 Projections
25
20
15
Domestic petroleum supply
10
5 Net petroleum imports
0
1970 1975 1980 1985 1990 1995 2000 2005 2010 2015 2020 2025 2030 2035
Source: “Annual Energy Outlook 2011”, U.S. Energy Information Administration, www.eia.gov/forecasts/aeo.
3
Figure 2. Sales of unconventional light-duty vehicles by fuel type - 2009, 2020 and 2035
(million vehicles sold).
Unconventional vehicle technologies exceed 40 percent of
new sales in 2035.
Plug-in and all-electric 10
Diesel
Electric hybrid 8
Micro hybrid
Flex-fuel 6
Total
Source: “Annual Energy 4
Outlook 2011”, U.S. Energy
Information Administration,
www.eia.gov/forecasts/aeo.
2
0
2009 2020 2035
The emergence of the monitor prices via their smartphones. effect of these changes on the fuels
“now consumer” And shoppers at hypermarkets can retail industry is not fully known, it
use a smartphone app to prepare their is anticipated that refinery owners
With vast quantities of information
shopping lists, download coupons and shareholders will be looking to
at their disposal and greater control
and check their fuel rewards balance. recoup their upgrade investments and
over transactions than ever before,
As demand for fuel declines, the lower their cost to serve as they try to
customers are in a position to demand
innovative use of technology to capture a greater share of a sluggish
more from their retailers. Tailored
attract, retain and engage customers retail market. At the other end of the
and personalized products, services
will become an ever more important downstream spectrum is the continued
and experiences are now expected,
factor in achieving competitive expansion of hypermarkets and other
as are accessibility, convenience
advantage. nontraditional fuels retailers. With
and a cohesive, integrated shopping their combination of forecourt and
experience across channels backcourt offerings, hypermarkets
(see Figure 3). Downstream competitive
offer attractive retail alternatives
pressures for fuel consumers and will likely
The rapid innovation and proliferation A number of trends beyond high oil
continue to build more brand
of personal communication prices and weak demand are poised
loyalty and market share.
technologies are driving these new to change the US downstream
consumer expectations and, by competitive landscape. At one end of
Addressing the challenges and
extension, new customer experiences the spectrum are structural changes
opportunities that will accompany
in all sectors—including the fuels retail in the refinery business, reflected not
these changes requires players in
industry. Drivers can now locate the only in the above-average number
the fuels retail space to reexamine—
nearest gas station from sophisticated of spin offs, sales and closures seen
and adapt—their existing business
integrated telematics systems or via a in 2011, but also in the number of
models, technologies and business
smartphone app (which also compares recently announced refinery upgrade
practices. Those players that fail to
prices at nearby stations). Some projects, which will allow refiners
do so risk losing market share and
regional players notify customers to accommodate new sources and
the competitive advantage that
about fuel price changes and allow types of crude oil and potentially
will underpin high performance in
them to purchase fuel in advance or increase their capacity. While the
the years ahead.
4
Figure 3. Accenture research and experience have revealed five characteristics of the
“now” consumer.
1 2 3 4 5
Fragmented Interconnected Savvy Time-starved Conscious
Customers want Customers expect a Customers are Customers want a Customers are
tailored and brand experience more knowledgeable convenient concerned about
personalized across multiple than ever before experience, as well value and about
products, services channels and touch and are comfortable as the accessibility their health and
and experiences. points. This means integrating technology and transparency the environment.
This means they are they are harder to into their lives. needed to make This means it is
harder to target. reach and engage. This means they are informed decisions. harder to win
harder to impress. This means they are their trust.
harder to please.
5Envisioning high performance
Understanding what the future will look like and having a
plan to compete in the changing fuels retail environment
are essential components to achieving—and maintaining—
high performance in the years ahead.
Given the uncertainties of market Through our work with clients around Transform pricing
conditions, oil prices and consumer the world and across all industries, In the next 20 years, there will
demand, many companies may we have seen first hand what is be increased competition among
feel that developing a go-forward possible when companies exploit multiple fuel and vehicle platforms.
strategy at this point is premature. market changes for their advantage As described in recent research,6
We disagree. (see sidebar on page 9). There is no Accenture anticipates a mixed
reason that companies in the fuels landscape that will not only feature
The ongoing Accenture High retail industry cannot enjoy the same both plug-in hybrid electric vehicles
Performance Business research type of success by capitalizing on and full electric vehicles, but also
program has repeatedly shown that the opportunities—and sidestepping include advanced combustion engines,
top companies distinguish themselves the challenges—that lie ahead. At a greater use of biofuels, natural
by effectively balancing current a minimum, we believe that fuels gas vehicles, hydrogen fuel cells and
needs and future opportunities. retail companies should use this time other fuels such as diesel. Although
They achieve this balance through a of change to reexamine how they adoption of alternative fuel vehicles
“competitive essence” that enables currently conduct their business, is low today, as technology improves
them to succeed in today’s markets generate revenue and engage with it is highly likely that such fuels will
and also capture and profit from new customers. Accenture has identified become viable alternatives for many
markets going forward. As they plan several areas that we feel are worthy consumers (see Figure 2). There are,
their next steps, they are willing to of consideration. in fact, already signs that innovative
trade some of today’s performance pricing schemes will be necessary for
for tomorrow’s gain. And, as some of traditional motor fuels to compete
our most recent research has revealed, with alternate fuel sources that may
they are not afraid to identify—and have very different cost characteristics.
act upon—market insights that they
feel will shake up the competitive
landscape.5
6So, how should fuels retailers think exposure.8 Similar online programs Efforts to transform pricing could
about competing in an evolving are emerging for individual drivers, generate benefits throughout the
transport world? Other industries too. MyGallons.com, for example, fuels retail value chain. For producers
provide telling clues. allows US consumers to buy gasoline and suppliers, volume commitments
at current prices and use gallons from might help ensure a secure foothold
A number of industries have their fuel reserve when prices rise. in a market where overall demand
successfully applied new pricing Fuel credits are stored on prepaid gas is falling. Volume pricing for end
schemes to grow sales and attract and cards, which can be redeemed at a customers could also improve
retain customers. US utility companies number of filling stations across the brand loyalty. For wholesalers, the
are prime examples. In deregulated country.9 value of pricing transformation
markets, these companies offer lies in potentially saving money by
consumers myriad pricing options Fuel suppliers might also consider locking in favorable fuel prices. For
that lock in rates for a predetermined partnering with auto manufacturers retailers, lock-in rates or partnership
period of time. Fuels retail suppliers to transform existing pricing models. agreements might require more
could offer a similar pricing model In a potential partnership scenario, flexible onsite payment-processing
that allows wholesalers or retailers automakers could include the price and/or accounting applications
to pre-pay for a certain volume of of the supplier’s fuel for one, two to accommodate the new pricing
fuel at a fixed or variable price. The or three years into the purchase or structures. Costs associated with
locked-in rate could last for 30 days, lease price of the car. Alternatively, implementing new systems and point-
60 days or an entire year, depending they may offer a purchase incentive of-sale terminals would likely be offset
on the amount and duration of risk that significantly reduces the cost of by the benefits of the new pricing
each party is willing to assume. The gasoline at select stations for a period programs, including increased foot
commodity price risk in such schemes of time. In either case, auto buyers traffic and, presumably, additional
could be assumed by either the fuels would then be able to fill up at any sales of other products sold at their
retailers or by sponsoring parties such of the suppliers’ stations during locations.
as banks. the offering period without paying
for fuel, or doing so at a steeply
A “lock-in” rate might also be discounted rate. For them, the days of
made available to drivers. Today searching for the best gasoline prices
consumers in Houston can pay a would be over. Automakers have
local electric utility a flat fee of $89 already indicated their willingness
per month for unlimited charging to use such pricing schemes as a
of an electric vehicle at home and way to attract customers. From May
via charging stations in parking to July 2008, Chrysler rolled out
garages and businesses.7 Such a flat- its “Let’s Refuel America” program,
fee option, coupled with a wider which provided new car buyers a fuel
selection of vehicles, provides a very card that could be used to purchase
real and cost-effective alternative fuel at $2.99 per gallon to travel
for consumers with typical driving up to 12,000 miles per year for
patterns. It is not inconceivable that three years.10 In July 2009, Hyundai
retailers would be able to adapt launched a similar program that
a similar program for consumers offered fuel price protection ($1.49
interested in buying traditional for 12 months) for buyers of select
motor fuel at a fixed rate. Pricelock, models. The program contributed
an online auction system for buying to vehicle sales increases of 47
and selling fuel, already allows percent in August and 27 percent in
businesses to select the maximum September of that year.11
price per gallon for gas or diesel they
are willing to pay. When fuel prices
exceed that cost, Pricelock pays them
the difference. Pricelock also offers
fuel surcharge protection for shippers
and trucking companies to help them
manage their fuel price volatility
7Identify opportunities to Another area for fuels retailers to ties. Specifically, large fuel suppliers are
exploit new and existing consider is product/service innova- positioned to think about which rela-
tion—or offering something entirely tionships would serve customers across
revenue sources
new that will help attract and retain their sites globally and regionally. At
While the lion’s share of fuel retailers’
customers and, at the same time, the same time, they should encour-
revenue comes from the sale of fuel,
capture new revenue streams. Partner- age and even enable wholesalers and
margins are razor-thin. Given that the
ships can potentially help retailers retailers to carry out specific programs
forecourt is extremely competitive
take advantage of such new revenue within a targeted local community. It
(and will become even more so if fuel
opportunities. This is especially true if is the local operators that are placed to
demand declines as expected), savvy
retailers are able to share and leverage take advantage of local dynamics and
retailers are looking to gain an edge
customer information. In fact, at least consumer preferences.
over their competitors by focusing
one major auto manufacturer lever-
on winning in their more profitable
ages customer and telematics system Know the customer—and
nonfuel categories such as food, bev-
data to generate unique leads and
erages and other backcourt merchan- act on insights to personalize
email marketing campaigns to support
dise. In this regard, fuel retailers are
the growth of local dealer businesses. their experience
similar to any other type of retailer. Our research has shown that customer
In one example, a customer gets in a
And like traditional retailers, they can relevance is an increasingly important
small car accident and within hours
take steps to create a more satisfy- concept to retailers striving for high
of the incident receives an email with
ing customer experience and drive performance. It is easy to understand
a discount to a local body shop for
nonfuel revenue gains. why—especially given consumers’
repairs. In another scenario, a fuel
customer is alerted that it is time desire for highly personalized offerings
Accenture research12 into the char- and experiences. By developing a
for an oil change—either through a
acteristics of high performance in better understanding of the consumer
personalized advertising panel, via her
various retails sectors has found that and the marketplace than their
gasoline receipt or by the clerk at the
retail leaders accurately estimate prof- peers, fuel retailers can deliver more
checkout counter. The retailer is able
itability of their various store spaces appealing products and services
to make the oil change determination
and reallocate their spaces and brand to their customers across multiple
because its systems are linked to those
selections as needed to drive revenue categories.
of the driver’s telematics system,
growth. They also excel at offering
which logs miles traveled. If the filling
a set of product ranges that span mul- The key to improving the revenue
station offers oil changes, the atten-
tiple categories that customers want potential of each customer lies in
dant could schedule the service right
and that positively impact the bottom understanding as much as possible
away. If it does not, the attendant
line. Decisions on what to offer and about buyers’ needs, preferences
could refer the customer to a nearby
at what price are made consistently and purchasing behaviors. Building
facility which would, in turn, pay the
across multiple product categories customer analytics capabilities can
fuel retailer a referral fee.
and in the context of a changing store pay off in a number of ways and
environment where refurbishment, allow fuel retailers to truly engage
To establish revenue-generating
seasonal promotions or brand changes with their consumers at the local
relationships, Accenture believes
are all too common. Such decisions level. Tailored advertising or product
fuel suppliers and retailers can once
are also based on store-level analyses promotions at the pump, for example,
again learn from their nonfuel retail-
of product trends, customer prefer- could encourage customers filling their
ing peers. According to Accenture
ences and individual stores’ inventory tank to come inside the store to make
research, high performers in other
capacities. Finally, successful retailers a last-minute purchase. Alternatively,
retail segments balance their broad
track customer attitudes and behav- leasing advertising space at a fuel
reach and their local flexibility.13 They
iors in response to new offerings so retail location to other businesses
establish what are described as “super
that immediate action can be taken can present valuable information
global/super local” operating models
to adjust the range or brand portfolio to consumers and also generate
that centralize core activities at either
if necessary. Some fuel retailers have additional revenue.
the global or local level. In the fuels
also started to take advantage of
retail arena, it is very difficult for any
the wealth of consumer data, track
one organization to optimize a global
customer attitudes and leverage
and a local operating model. Rather,
customer analytics to reassess their
accountability should be split among
backcourt offerings.
those businesses suited to address the
nuances of global or local communi-
8As fuels retail companies use this time of change to
reexamine how they currently conduct their business,
generate revenue and engage with customers, Accenture
has identified several areas that we feel are worthy of
consideration:
• Transform pricing through mechanisms such as volume
incentives, price caps or strategic partnerships with auto
manufacturers, among others.
• Identify new revenue sources in more profitable nonfuel
product and service categories.
• Create a personalized experience, based on deep
knowledge of consumer preferences, that attracts new
customers and bolsters brand loyalty.
• Simplify the customer experience, using emerging
personal technologies.
9Social media applications can Go mobile The solutions that these two
play a big role in learning about Consumers today are starved for companies and others are making
customers and ultimately creating time. They want to carry out their available today are certainly creative
a more dynamic and rewarding purchase transactions as quickly and and provide near-term examples of
interaction. At Accenture, we easily as possible. One of the most how mobile payment solutions are
have helped retailers harness the important ways retailers can simplify already taking hold in the retail space.
potential of personal technology the customer experience is by taking Longer-term solutions based on near
to increase the pull of their stores. advantage of mobile applications that field communications (NFC)—which
A number of retailers, for example, enable multiple transactions via a enable transactions, data exchange
post special sales announcements single device. and wireless connections between
for their followers on various social two devices—are expected to further
networking sites. Others send mobile Starbucks illustrates how it can be simplify the customer experience
coupons that are redeemable only done. The coffee company makes it and take customer convenience to a
in their stores. Still others reward possible for customers to pay for their whole new level. NFC technologies
users for simply showing up to their purchases with their smartphones. will be particularly prominent in the
stores. Fuel retailers could certainly The mobile payment solution, which mobile phone market. According to
employ similar tactics. Further, they is available at nearly 8,000 locations, market research, NFC-enabled mobile
could once again combine a global is part of the free, downloadable phones will make up more than 53
and local perspective in their use of Starbucks Card Mobile App. To pay percent of the mobile market by
social media to not only promote for their purchases, customers simply 2015. At that time, NFC is expected
branded loyalty programs, but also hold their mobile device in front of a to also be the most-used solution for
offer unique and highly valuable scanner to scan the app’s on-screen mobile payment.17 What is more, NFC
experiences that local consumers barcode. The purchase is deducted is expected to enable mobile wallets,
want. from the card balance. In addition providing customers the opportunity
to enabling mobile payments, the to combine payment, loyalty, offers
There are, of course, numerous Starbucks app allows customers to and coupons at the point of sale.
methods beyond social media to manage their Starbucks Card account,
offer customers a differentiated and check their card balance or rewards Google Wallet, an Android app
personalized experience. What if status, reload their card, and even find that turns shoppers’ smartphones
you knew that Customer X routinely a nearby Starbucks store.14 into their wallets, provides an
purchased a specific soft drink when early example of how NFC-enabled
she filled up her tank? Now imagine One US-based regional fuel retailer- smartphones and mobile wallet
how powerful—and personal—it via its mobile payment application— solutions can potentially change
would be to present that consumer enables customers to pay for fuel the retail game. By storing virtual
with a free drink on her every fourth or merchandise by simply texting versions of existing plastic cards on
visit? She would feel special and a message to a specific number. In a phone, customers can simply tap
valued. And, in all likelihood, she return, they receive a code, which they their phone on a retailer’s reader to
would come back again and again. then enter at the pump’s touchscreen. send payments automatically and, at
Establishing dedicated fuel lanes for The mobile payment system manages some merchants, redeem offers and
the most valuable customers or simply the transaction as it would a debit- transmit loyalty account information
acknowledging the customer by name card purchase.15 As an added bonus, so they can earn rewards for their
can also go far to facilitate repeat the system also offers users gas prices purchases.18
business. guaranteed to be the lowest posted
within the last 24 hours at more than
1,000 branded locations.16
10The emergence of apps as described These and other strategies
here may be as valuable to retailers as can potentially build stronger
they are to consumers. This is because relationships with consumers and
these apps present an opportunity to drive additional revenues. Importantly,
shift consumers to less expense forms they also can position wholesalers as
of payment. Each time a customer better, more committed customers
uses a mobile wallet or text app to suppliers. In the past, when
rather than a credit card, the retailer demand was high and supply was
may be able to avoid some of the limited, being a good customer was
credit card fees that have historically not a consideration. Now, as the
diminished retailers’ already-thin market for fuels retail is shrinking,
profit margins. Additionally, mobile refiners can be more selective in
payment technologies are already choosing their wholesale customers.
boosting customer loyalty and Those wholesalers and retailers that
enabling the delivery of advertising can demonstrate a commitment
that will play a bigger role in driving to creating a branded experience
revenue than the actual payment and more meaningful customer
functionality. In the future, it is relationships are likely to be viewed
assumed that every mobile wallet more favorably.
will have a loyalty and advertising
scheme included. Fuel retailers have a
unique opportunity to achieve first-
mover advantage by incorporating
these mobile technologies into their
business models.
11From vision to reality There is no single, “correct” way for fuels retail companies to chart a path to high performance. Each organization is unique. Likewise, each will need to determine how to leverage the emerging market trends for competitive advantage. That said, Accenture believes there are certain things organizations can do today to capitalize on the promises—and overcome the challenges—of the new fuels retail landscape. 12
Face reality Assess opportunities for address the industry challenges with
As a first step, fuels retail collaboration new programs for revenue creation
organizations must not only We believe the changing fuels and customer engagement should be
acknowledge that their industry is retail environment sets the stage prepared to take an iterative, long-
undergoing transformational change, for many national and local term approach. Companies that are
but also accept that these changes partnership opportunities with successful have learned to continually
will have a dramatic effect on how other organizations, both within innovate, seek out new opportunities
they conduct their business, earn and outside the industry. Creating and revisit existing programs to align
revenue and gain market share. Fuels solutions and offerings with with business priorities.
retail executives should act now to advertisers, credit card companies,
not only gain the organizational automakers, technology vendors, and
buy-in, but also establish the global or local retailers via strategic
organizational skills and structures partnerships can enhance the
that will be needed to formulate experiences of fuels retail customers
an effective strategic response. and reveal new sources of revenue. To prepare for the changes
It is not too early for fuels retail that are transforming
Think “outside the box” executives to start thinking about their industry, fuels retail
(or beyond the pump) the types of partnerships that can organizations should:
help them achieve their business
At Accenture, we believe the
objectives. What potential partners
changing fuels retail environment will
should be considered? What is the
• Acknowledge that the
present a number of opportunities industry changes will not
for companies to create new forms right balance between national,
of competitive advantage. We regional and local partnerships? What only affect their businesses,
encourage organizations to reexamine will such partnerships require? What but also require a strategic
all aspects of their operations— might they deliver? response.
from their business models to their
underlying technologies to their Take the customer’s • Reexamine their business
traditional go-to-market strategies. perspective
At a minimum, we believe companies models and identify potential
Accenture research has found that
should begin thinking about adopting ways to create new forms
new pricing models and new ways of consumers today want tailored and
personalized products, services and of competitive advantage.
interacting with their most valuable
customers. experiences. They want accessibility
and transparency to make informed • Invest in mobility solutions,
Invest in technology
purchases … instantly. They want a social media and analytics
seamless, simple way of interacting to better serve customers
Retailers today have an unprecedented across channels. And they want to
amount of data at their disposal for of the future.
feel special and connected.19 We
attracting and retaining customers, encourage fuels retail executives to
driving pricing strategies and shaping • Identify opportunities for
assess how well their organization
customer offers. The real challenge
lies in optimizing the access, analysis
meets these demands today, and collaboration with other
what might be done to improve their industry players—or even
and use of that data to unearth new
sources of revenue. Additionally, the customers’ experiences tomorrow. organizations outside the
proliferation of personal technologies In short, they need to build the
capabilities to not only understand
industry.
makes it possible for retailers to not
only better understand and reach their their customers, but act on their
customers, but also keep their attention customer insights to drive revenue, • Build capabilities that will
long enough to influence their profitability and high performance. allow them to understand
purchases. While the technical solutions and act upon customer
that support fuel retailers’ strategic Become more agile
objectives will certainly vary, we believe
insights.
Accenture’s research and experience
investments can (and should) already
has shown that agility is a critical
be made in three areas: mobility, social • Adopt an iterative,
media and analytics. Investing early in trait for high-performance
businesses.20 This will certainly be
long-term approach to
these technologies will help fuels retail
companies distinguish themselves from true in the fast-changing world of high performance.
their peers. fuels retail. Companies looking to
13Companies within a number of industries have taken advantage of challenging market environments to recast how they generate revenue, build market share and engage with their customers. Texas electric utilities Print advertisers Traditional retailers Following the 2002 deregulation of As more and more consumers turned With the proliferation of personal the Texas utility market, 85 percent to online news sources for informa- technology devices, retailers knew of commercial customers and 40 tion and social networking sites for they needed to adopt mobile com- percent of residential consumers have classified listings, revenue from tradi- merce capabilities that reflected how switched providers at least once.21 tional newspaper advertising is declin- consumers wanted to shop. Within In this volatile environment, forward- ing. Total ad spend on both print and just a few short years, an effective thinking utilities began offering a digital was calculated at US$25.8 mCommerce strategy has become a variety of plans and pricing models billion, the lowest since 1985.25 Some mandatory means of reaching consum- to meet their consumers’ specific newspapers accelerated their shift to ers. Coda Research Consultancy, for needs. Houston’s energy consumers, online advertising, began distribut- instance, estimates m-commerce sales for example, can now choose among ing content via social media sites in the US will be $2.42 billion in 2010, 60+ different pricing schemes and such as Facebook, and wisely adapted up from $1.2 billion in 2009. By 2015, hedge their bets against rising their business models to better serve Coda predicts m-commerce sales will prices in exchange for long-term their readers—and secure new sources skyrocket to $23.8 billion, representing commitments. In addition to offering of revenue. By investing early and 8.5 percent of all e-commerce revenues more attractive pricing options for aggressively in a subscription-based in the country.28 A number of retailers consumers, retail energy providers Internet distribution model, for exam- have already accelerated their mobile in Texas also invested significantly ple, the Wall Street Journal overtook efforts to provide a seamless shopping in meeting the needs of the “green” USA Today as the nation's top news- experience. At one clothing retailer, consumer. Texas now leads the nation paper (by circulation) in 2009.26 Rival shoppers can buy clothes shown in in wind power, with 25 percent of New York Times launched multiple print ads by snapping embedded QR the nation's generation capacity. It subscription packages for access to its codes with their mobile phone camera. is the national leader in overall wind website and other digital content.27 A consumer electronics store is using installations, the first state to reach embedded QR codes to enhance the 10,000 megawatts of wind energy customer shopping experience. Each installations, and home to seven of product tag within the store has a QR the nation’s 10 largest wind farms, code, which allows customers to access including all top five.22 Finally, Texas more product information, including utilities are now offering loyalty ratings and reviews, demonstration programs to attract and retain videos and side-by-side comparisons. customers—something that was An interactive digital catalog is acces- unheard of in a regulated utilities sible from another clothing retailer’s market. TXU Energy, for example, advertisement in 20 digital magazines; has teamed with Southwest Airlines by tapping on an image, browsers can to offer the TXU Energy LUV 2 Fly buy products. And online boutique rewards program.23 Additionally, TXU invites customers to vote on potential Energy recently distributed more than clothing designs. If a style gets enough $30 million in “cash back rewards” votes, the design will be produced and to enrolled customers for their 2010 sold by the company, and participants electricity usage.24 will be notified via email. 14
Conclusion
Changes are looming for the fuels Examples from other industry sectors At Accenture, we believe those
retail industry. Driven primarily by suggest how fuel retailers can thrive companies that are willing to
supply and demand imbalances, the while navigating the new fuels reexamine—and possibly adapt—their
emergence of alternative fuels and landscape. New pricing schemes, new existing business models, technologies
new customer expectations, these revenue sources and new ways of and business practices today are much
changes will fundamentally alter how interacting with customers are just a more likely to be the industry’s high
fuels retail companies go to market, few of the strategies poised to play performers tomorrow.
attract and retain customers, and an important role in defining fuel
achieve profitability. retailers’ future success.
Endnotes
1 "Annual Energy Outlook 2011: Reference Case," 10 "Cheap Gas to Move a Guzzler," The New York 20 “Creating an agile organization,” Outlook
U.S. Energy Information Administration, December Times, July 20, 2008, via Factiva, © The New York Times magazine, Accenture, October 2009.
2010. Company.
21 "Electricity In Texas Deregulated," MX
2 “Data, Analysis & Trends,” US Department of 11 "How Hyundai found gold in U.S. recession," Energy, www.mxenergy.com/electricity-texas-
Energy, Alternative Fuels & Advanced Vehicles Data Automotive News, November 9, 2009, via Factiva, © deregulated-a-14.html.
Center, www.eere.energy.gov/afdc/data/fuels.html. Crain Communications, Inc.
22 "Wind Energy Facts: Texas," American Wind
3 "Annual Energy Outlook 2011," US Energy 12 “Achieving High Performance in the Department Energy Association, www.awea.org/learnabout/
information Administration, April 2011, www.eia. Stores and General Merchandising Segment,” publications/upload/Texas.pdf.
gov/forecasts/aeo. Accenture, 2009; “Achieving and Sustaining High
Performance in the Home and Personal Care Segment,” 23 "TXU Energy and Southwest Airlines Show
4 Ibid. Accenture, 2009. the LUV to Retail Electricity Customers in Texas,"
Business Wire, September 8, 2011, via Factiva, ©
5 Nunes, P. and Breene, T., "Jumping the s-curve: 13 Ibid. Business Wire.
How to beat the growth cycle, get on top, and stay
there," Accenture Institute for High Performance, 14 "Mobile Payment Debuts Nationally at Starbucks," 24 "TXU Energy Gives Back $30 Million, Invites
2010. Business Wire, January 19, 2011, via Factiva, © Business Customers to Pay it Forward," Business Wire,
Wire. January 20, 2011, via Factiva, © Business Wire.
6 “Plug-in electric vehicles: Changing perceptions,
hedging bets,” Accenture, 2011. 15 "Pay-By-Text Takes Off for Murphy Oil USA," 25 "Digital media eating into print ad share in US
Convenience Store News, October 3, 2011, via Factiva, market," Meri News, March 16, 2011, via Factiva, ©
7 "NRG Energy to start electric car charging © Stagnito Media. Meri News.
networks in Dallas, Houston metro areas,"
Associated Press Newswires, April 8, 2011, via 16 "10 Things To Know About MurPay," Murphy USA, 26 "WSJ says it taking No.1 spot on USA Today
Factiva, © The Associated Press. www.murpay.com/best-gas-price.aspx. losses," Reuters News, October 9, 2009, via Factiva,
© Reuters Limited.
8 "Pricelock; Pricelock Launches Online Natural Gas 17 "NFC payments market to grow at CAGR of 118%
and Fuel Auction Platform," Energy Weekly News, in 2010 - 2015," Telecompaper World, 27 "New York Times Readies Pay Wall; Paper Will
September 30, 2011, via Factiva, © Energy Weekly February 1, 2011, via Factiva, © Telecompaper. Charge for Bundled Digital Service, Allow Some Free
News via VerticalNews.com. Access," The Wall Street Journal Online, January 24,
18 "Sprint Introduces Google Wallet," Wireless News, 2011, via Factiva, © Dow Jones & Company, Inc.
9 “Mygallons.com Lets You Hedge Against High September 25, 2011, via Factiva, © Close-Up Media, Inc.
Price of Gas,” South Florida Sun-Sentinel, March 2, 28 "M-comm growth spurt," DMNews, June 21,
2011, via Factiva, © South Florida Sun-Sentinel. 19 "The me-tail technology guide: Capturing, Engaging 2010, via Factiva, © Haymarket Media.
and Serving the Now Consumer," Accenture, 2011.
15Contact us About Accenture
We invite you to learn more Accenture is a global management
about how Accenture works with consulting, technology services and
companies to drive high performance. outsourcing company, with more
For more information, visit us at than 236,000 people serving clients
www.accenture.com. in more than 120 countries.
Combining unparalleled experience,
Ben Carey comprehensive capabilities across all
+1 713 483 9314 industries and business functions,
benjamin.s.carey@accenture.com and extensive research on the world’s
most successful companies, Accenture
Susan Trentmann collaborates with clients to help them
+1 312 693 3340 become high-performance businesses
susan.k.trentmann@accenture.com and governments. The company
generated net revenues of U.S.
$25.5 billion for the fiscal year ended
Aug. 31, 2011. Its home page is
www.accenture.com.
Copyright © 2011 Accenture
All rights reserved.
Accenture, its logo, and
High Performance Delivered
are trademarks of Accenture.
9-0844/MOD-105You can also read
