The home heating oil industry has a long and proud history, and Fuel Oil News has been there supporting it since 1935. It is an industry that has faced many challenges during that time. In its 77th year, Fuel Oil News is doing more than just holding
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28 AUGUST 2016 | FUEL OIL NEWS | www.fueloilnews.com T he will-call business has changed, according to some in the fuel oil industry. For starters, they don't call it will-call. "On-demand" is the preferred term. Mark A. Stillman, president of Energy Edge Advisory Group, moderated and participated in a session on E-commerce at the NEFI Visions conference in Worcester, Mass., where he described "a growing on-demand segment which used to be called will call. And it was devalued as kind of junk business." Not so anymore, Stillman said in an interview with Fuel Oil News after the conference. "The heating oil space has evolved a lot in the past ten or fif- teen years," Stillman said, and that is reflected in the trend of modern consumers "buying a lot of things on Amazon and making different choices about how to engage retailers." Stillman said "on-demand" business represents nearly half of the volume in the industry in certain markets. "It's comprised of doctors, lawyers, schoolteachers and firefighters who just aren't interested in the full-service value proposition," he said. "They're more interested in the convenience of control, of doing it online, in a way that they don't have to be worried about talking to people on the phone. They're shopping for heating oil the same way that they shop for everything." Stillman mentioned the conventional wisdom that "when the weather is warm and prices are low customers just stay put." But he said they weren't staying put during the last heating season. "They were shopping online." Millennials—in the 25 to 44-year-old age group—"are underwhelmed if not completely uninterested in the traditional full-service value proposition," Stillman said. "They're still con- sumers of heating oil. They're just typically wanting to buy it online" at their convenience. "The good news is they're staying with heating oil," Stillman said. "The bad news is if you're a full-service retailer and you don't have a way of reaching this consumer then you're essentially ignoring them. You don't want to ignore them." Such consumers make up half the market in some areas, he said, including Maine. The panel at the NEFI Visions session in June discussed the pitfalls of will-call. "If you run will call through your full-service business—answer the phone, take a credit card number, or pick up a check, or give credit terms, and [the customers] are price- sensitive and disruptive—yes they're margin-killers," Stillman said. "Always have been." The advantage of true e-commerce, he said, is that it allows customers "to find you, learn about you, interact with you, do business with you, pay you, be marketed to—all automated and unattended. Because of that the cost of fulfillment goes down," and there aren't so many headaches attached to that segment of business, he said. "You're just getting the orders." He added, SELLING FUEL OIL ONLINE Automated selling as a way to compete on price BY STEPHEN BENNETT