With a new season upon us, it’s time to re-evaluate our sport. As in all areas of life, change is inevitable. New competitors arise, while existing ones rise (or fall) to the occasion. The bottom line is that we can’t predict with any certainty what will happen next year. All we can do is look at what has happened in the past, make some educated guesses, and prepare for the future.
Has Speedway’s Position In The Market Changed?
Is it possible that, after a decade of dominating the sport, Speedway has now arrived at the point where they are no longer the market leader? Has gas tanked? Has the economy caused a sharp decline in gasoline purchases? Has the rise of electric vehicles eclipsed the sport?
It’s fair to say that, at this point, it’s difficult to find any segment of the automotive market that Speedway does not occupy. When you include the Superstore gas stations in the mix, it’s a veritable monopoly. Back in 1922, when the industry was in its infancy, Henry Ford remarked that, if there were 10 Fords in a neighborhood, there would be 10 sales pitches every day. In today’s world, with nearly 7,000 independently-owned gas stations across the country, it’s difficult to say that there hasn’t been a concerted effort to get in front of potential customers, and it’s working. To wit:
The Growth Of Online Shopping For Automotive Products
One of the interesting trends emerging recently is how much consumers are relying on the internet to research and purchase cars and all their associated products (mainly tires and gas). According to HubSpot Blogs’ 2018 State of the Industry Report, 59% of consumers research products online, while only 17% rely on in-person experiences. The trend is clear: consumers are leaning more towards the digital landscape.
How Big Is The TV And Digital Marketing Channels?
If you’re reading this, I assume you’re either a marketing person or someone closely associated with marketing. For those of you who aren’t familiar, marketing is the discipline of coordinating the communication and promotional efforts of a business, both within and outside of its four walls, to achieve desired goals. These goals may include increasing brand awareness, generating leads, engaging with potential customers, and boosting sales.
The television and digital marketing channels are both rapidly gaining ground, with 71% of consumers utilizing these mediums to learn about products, compare pricing, and discover discounts. What’s important to note is that these are all elements that can be woven into an effective marketing campaign.
Considering that nearly 70% of consumers research products online, and only 17% rely on in-person experiences, it’s clear that companies, brands, and products need to be where consumers are searching and reviewing. This is the type of person you’ll want to reach with your marketing campaigns: people who are online, but might not be inclined to buy a car just yet.
What About The Cost-Per-Click Model?
Most businesses, including those in the automotive sector, are moving away from pricey newspaper ads, toward more effective (and cheaper) models of advertising, specifically cost-per-click advertisements. Some of the benefits of this model include the ability to target the right audience, monitor effectiveness, and ensure compliance with the COPPA (Children’s Online Privacy Protection Act). The primary downside is that with every new click comes a tiny bit of overhead involved in operating a website, which can quickly add up. What’s important here is that, despite the cost savings, the model still requires a significant investment of money upfront.
Pricing And Promotions
Is it possible that the best days of selling at a huge profit are now behind us? Probably not, but there’s no question that competitive pricing and aggressive promotions, along with some savvy positioning, can make a significant impact in the right (or wrong) niche. Some car dealerships, including those belonging to Volkswagen, are already capitalizing on this by offering highly competitive vehicle purchase and financing deals. This has resulted in record-breaking pre-sales and, according to some industry experts, could even threaten the dominance that the German automakers have enjoyed for so long. It’s interesting to note that, in 2019 alone, Volkswagen’s U.S. automobile dealership sales were worth about $25.9 billion.
This is the idea that, eventually, oil prices will reach a peak and begin their long decline. While this might be true, it’s still a considerable amount of oil that the global market needs – and that the U.S. in particular needs. If you’re part of the 17% of consumers who still rely on in-person experiences to learn about products, compare prices, and discover discounts, than this theory doesn’t apply to you. In other words, if you want to purchase a car, you can do so without having to worry about running out of fuel. It’s also important to note that, even in the case of a peak oil scenario, you’ll likely still need gas-powered vehicles to make your way around the country. Some industry experts predict that, by the year 2040, nearly all new vehicles will be either electric or fuel cell-powered. The fact is that, for now, fossil fuels will continue to play an important role in our society.