Evolution of E-Commerce in the Downstream Fuel Industry

May 3, 2019 | By: Energy Engine
Categories: Blog Posts

E-commerce has impacted the downstream fuel industry in a big way.

Fuel customers expect more now than they ever have before and there behavior is constantly evolving.

Customers expect their fuel dealers to know them. They expect dealers to be interactive. They expect the e-commerce to be what they are used to — they want it to be like Amazon!

So what does this this evolution of e-commerce look like?

Let’s take a brief look at the new behavior of these consumers that are driving this evolution.

Why Downstream Fuel Customers Buy Fuel Online

1. Self Determination

There are a number of changes in recent consumer behavior.

The first one has to do with a behavioral change. It’s a new determined mindset that people have adopted.

People want total control. The consumer wants to determine exactly how they are going to make their purchase. The internet has provided us with more information at our fingertips than we’ve ever had available. If you’re in the heating oil part of the energy industry, just plug the generic phrase “heating oil” into Google and you’ll get more than 5 billion results coming back to you in about 2/3 of a second. That’s more information than any one of us could ever use.

We want what we want, when we want it, and we want it all on our terms. We are self-determined to be in control, and it applies to oil and gas demand just as much as any other product.

Once dealers consider this aspect of consumer behavior, they can start to structure their business to be able to satisfy this need.

2. Convenience

At Energy Engine, part of our Monday morning routine when we get into the office is to simply pull up a report.

It’s an easy way to start the morning, and we’re curious: “How many people actually placed an order since we left the office Friday afternoon?”

When we first started implementing e-commerce in our own business, this part of the routine quickly went from mundane to amazing.

Not only were people placing orders, they were buying oil actively on Saturdays when we thought they’d be relaxing. They were doing it on Sunday afternoon while they were watching football. They were doing it at 2 o’clock in the morning! You hear about those late-night shoppers, and we saw for ourselves — they’re out there! Not only that, but they were in our industry. People were buying heating oil and gas while most people were sleeping.

So, we’ve learned first-hand. It’s about convenience. Your e-commerce needs to be convenient for buyers 24 hours, 7 days a week.

When implemented properly, it turns your typical oil business into a 24-hour hub.

It takes people less time to find information, they don’t have to call in, and they can do it all on their mobile device when they’re on the go.

3. Transparency

This one goes hand-in-hand with self determination and convenience.

It’s simple. Customers want transparency, period.

They can see information about their fuel purchases more than they ever have in the past. They can go to a website and see the options that they have to select from.

They can go to one of our clients who are using the Engine and see the fuels that the dealer is offering. They can even see the different prices that are available based upon the quantity that they want delivered.

They’re used to knowing all of the prices, so really, there’s no point in trying to hide yours.

The customer asks themself, “There’s a reason why they’re not showing the pricing. I wonder what it is…”

Back when we started the first e-commerce platform in 2000, there were very few other places where you could find a price for heating and oil online. That transparency was just only starting at that point, and a lack of transparency wasn’t all that big of a problem for dealers. Nowadays, if you’re not transparent in terms of pricing, you are quickly questioned you miss out on potential sales.

How Downstream Fuel Customers Behave

Downstream fuel customers take their self determination and they go right to number 3 — they look at pricing.

Like customers of other industries, they are looking for the best product for the cheapest price.

However, low pricing is not the be all and end all when it comes to oil and gas. It’s more like an attention-grabber.

What downstream fuel customers are looking at for the long-run is fair pricing rather than low pricing.

If I’m looking to buy something on Amazon, I can quickly find a lower priced product. As a matter of fact, Amazon helps you find a lower price. It’ll tell you if there are other sellers out there with a lower price. They share that information there up front. I get that convenience from Amazon so it’s easy for me to just click through the site and my information is there.

Then it’s a matter of 1-3 clicks before the product is shipped to my house.

But in the downstream fuel industry, customer preferences are a bit different. People are willing to take the time to find fuel that has fair pricing. So, it’s more of a balance between offering simplicity and transparency, and then putting the icing on top with convenience.

Convenience is King

We heard customers tell us this many many years ago, and today, our clients are being told the same thing almost verbatim. Customers originally come into the business because of the price. The competitive price was great or the pricing was fair.

And don’t get me wrong, pricing is important, but the reason that customers stay with you is for the convenience. You initially get them interested based on an attractive price, but you keep them interested because you provide the convenience that they are looking for.

If you take nothing else away from reading this, remember this: customers come because of price, but they stay because of convenience.