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How Companies Can Combat Climate Change hero

Strategies in Fuel Commercialization

There are three primary emerging trends in the commercial oil and gas sector today that will have an even greater impact in the near future: evolving customer expectations, emerging digital technologies, and the rise of advanced mobility. Moreover, the oil market is extremely dynamic, with frequent price swings, requiring high-level attention on downstream channels in order to capture strong margins and gain market share.

Selling refined petroleum products to business and commercial customers has moved higher on the business agenda as digital technologies have pinpointed where and how to create value. The traditional binary choice—whether to own service stations or franchise them—has been replaced by a complex array of strategic channel choices driven more by regional supply and demand fundamentals and netback analyses.

Evolving Customer Expectations

The average fuel consumer has specific expectations and attitudes that should be top of mind for retailers today. According to BCG research, fuel consumers care most about:

  • Convenience. More important than price and brand, convenience is king.
  • Positive Customer Experience. Drivers don’t enjoy buying gas, but they do it frequently—especially professional drivers. A positive experience is key.
  • Being Ecoconscious. Consumers increasingly care about the environment and think of fuel as a necessary evil. Health-conscious, environment-focused drivers sometimes look for alternative forms of transportation.
  • Their Family and Kids. Parents transport their children by car more often now than ever—and need to feel that their kids are safe in the car while they buy gas.
  • Convenience Store Brands. Most consumers are not aware of or interested in different brands of fuel, but they are beginning to develop awareness of convenience store brands. Loyalty programs increase that awareness.
  • Their Time. Consumers appreciate any efforts that make fuel buying faster: pay-at-the-pump options, easy in and out, no waiting in lines.

To turn the shifts in consumer attitudes into future opportunities, retailers must reinvent the customer journey and launch digital solutions.

Digital Opportunities in Oil Retail

Players must embark on a digital transformation in order to create sustainable competitive advantage in oil retail. There are four primary ways in which retailers can use digital to revitalize the customer journey and bring lasting impact:

Winning with Personalized Offerings

The implementation of a personalized offering system is one of the most sophisticated marketing tools available for oil retailers:

  • Professional cards offer discounts to big clients.
  • Loyalty programs monitor customer behavior and improve the effectiveness of commercial interactions.
  • Dynamic pricing models depend on customer typology and regional competition.
  • Intradaily pricing models change by the hour, bringing in more customers who are sensitive to price.
  • Continuous campaigns can offer a high degree of personalization and level of segmentation, attracting the highest possible volume of consumers.

The Effect of Advanced Mobility on Oil Retail

While technology and changes in consumer behavior are enabling new business models in oil retail, there are other major disruptive forces—autonomous vehicles, battery technology, and the sharing economy, among others—that are changing how people consume fuel. The consumer habits of millennials could also have a strong impact on the future demand of energy.

Winning energy retailers will be prepared for these disruptions. As the number of electric vehicles rises dramatically around the globe in the coming decades, for example, retailers can offer fast charging options at fuel stations.

B2B Opportunities in Oil & Gas

Digital technologies create significant opportunities on the B2B side, as companies can leverage the wealth of existing data to better understand and serve clients in fuels and lubricants. For instance, companies can use advanced analytics to vastly optimize how they structure pricing for fuel contracts. Most contracts for fuels and lubricants use a pricing formula, but few optimize and target the pricing mechanism for each client. By combining typical supply analysis with client clustering through advanced analytics, it is possible to segment clients and tailor the pricing and implementation strategy for each segment.

Meet Some of BCG’s Experts in Oil Retail

BCG’s consultants and industry experts focusing on the oil retail sector partner with leading corporations to arrive at solutions and bring sustainable competitive advantage. These are some of our experts on this topic.

  • Oil and gas marketing and sales
  • Energy trading
  • Refinery operations
  • Petrochemicals
  • Energy
  • Operating models and organization in oil and gas
  • Refining and marketing strategy
  • Value chain optimization
  • Leads BCG's Energy practice in Asia-Pacific
  • Transformation and operational excellence
  • Organization
  • Development of corporate and business unit strategy
Oil & Gas

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