With both supermarket chains pushing their fuel discounts heavily many small business retailers are joining similar schemes connected to independent fuel outlets. It seems to me that these small businesses are copying the giants because they fear it is the only they can compete – by offering the same.
This is nuts.
Fuel rebates are so common that I don’t trust them. There is no point of difference any more. I don’t trust that it is a discount off an already fair price for fuel. I don’t trust that there is any element of reward in the offering. Okay I am probably in the minority – a space for cynics. However, the reality is that Australia now has 6 or 7 fuel discount offers.
The other aspect of the fuel offer which does not make sense to me from a small business perspective is that I say thanks to a customer for shopping with me and reward them by saying, hey, go buy some fuel and there’s your reward. Why can’t I offer a reward from my own product offerings? It seems to me that I have more control and more to gain by offering reward from in house.
In house rewards allow me to be more flexible, they can be used to encourage a higher spend from the customer and they make me work smarter within my business.
Fuel discount programs being offered (pushed) on small businesses have a cost and drive traffic elsewhere and that’s where I have big problems. They are the easy way out. In the case of newsagents, offering fuel discounts as part of a loyalty strategy drives consumer traffic to retail outlets which compete with newsagents. Surely there is more to gain by rewarding newsagent customers by offering discounts on newsagent product?
Coles and Woolworths control the fuel outlets they are driving consumers to. They have purchased and established these outlets in response to consumer research. Small business does not have the same needs to move traffic cooperatively between their businesses and fuel.
Small businesses are better off rewarding from within and with a view to generating incremental business within. The win is better in your pocket.