High Gas Prices Good For Online Marketers

**finlandscores** · 05-23-2008 06:40 AM

» Gas Prices Drive Shoppers Online - Marketing/Ecommerce Research

The price of oil reaching new highs is hardly news any more - and in the words of the great philosophers, Bachman Turner Overdrive, “B-B-B-Baby, you just ain’t seen nothin’ yet”. However, there is a silver lining to this cloud - it’s driving shoppers to spend their cash online.

High gas prices are something that Europeans are very familiar with. In the UK, gas is currently around 8 bucks US a gallon, even here in Australia it’s crept up to about US $5.40 a gallon - most of us have just grimly accepted it.

Yet US folks are freaking out about it possibly hitting 4 bucks a gallon soon? We may as all get used to it, this is only the beginning of the effects of Peak Oil.

Humans are pretty adaptive though and high gas prices mean ka-ching for online business. According to a survey of over 2,00 Americans carried out by Harris Interactive of behalf of iCongo, 33% of online U.S. adults stated they are more likely to shop online rather than in-person at a store due to the high price of gas.

If you’re a bricks and mortar store that just has a token brochure-type web site without full ecommerce functionality; it might be time to go full steam ahead with implementing a full-blown online store. It doesn’t matter what you’re selling, items big or small - ecommerce is now at a stage whereby you can sell just about anything online.

For example, I bought a garden shed kit a couple of weeks back; didn’t leave my chair and it was shipped to my door; and I’m a very happy camper. It’s not something I’d usually buy sight unseen, but the motivators for me to purchasing this shed was the way the items were presented on the site - good pricing, full details and photos, toll free number and even a series of videos for klutzes like me on how to put it together. It was also one of the first results in my search on Google for garden sheds - getting in the top 5 for any popular related search term is vital.

ime101

**young one** · 05-23-2008 06:54 AM

i agree with what you said..now that gas prices are going up to 5 dollars there are less and less people driving including me..im guessing now would be a good time to start your own website to sell products.

**jasaunders** · 05-23-2008 07:07 AM

Except history has proven you both wrong. When gas was under $2/gallon not too long ago, a large percentage of consumers said they would stop driving if gas reached $2. The same thing happened at $3. The same thing is happening at $4.

Consumers say they will drive less or not at all once gas prices hit a certain point, but it just doesn't happen. Demand for gasoline from consumers in this country has steadily increased over the last decade even as gas prices have increased.

**finlandscores** · 05-23-2008 07:14 AM

Originally Posted by jasaunders

Except history has proven you both wrong. When gas was under $2/gallon not too long ago, a large percentage of consumers said they would stop driving if gas reached $2. The same thing happened at $3. The same thing is happening at $4.

Consumers say they will drive less or not at all once gas prices hit a certain point, but it just doesn't happen. Demand for gasoline from consumers in this country has steadily increased over the last decade even as gas prices have increased.

Not true. Every major car company has experienced losses since gas prices began to steadily rise. In the past the gas prices rose slowly over a period of years.

**young one** · 05-23-2008 07:15 AM

Originally Posted by jasaunders

Except history has proven you both wrong. When gas was under $2/gallon not too long ago, a large percentage of consumers said they would stop driving if gas reached $2. The same thing happened at $3. The same thing is happening at $4.

Consumers say they will drive less or not at all once gas prices hit a certain point, but it just doesn't happen. Demand for gasoline from consumers in this country has steadily increased over the last decade even as gas prices have increased.

yes thats true..but i for example fill my 4 cylinder up with $50 i would imagine those spending 100 bucks to fill just to last a week,and now that times are hard i do believe that people will actually stop driving.

**finlandscores** · 05-23-2008 07:26 AM

Originally Posted by young one

yes thats true..but i for example fill my 4 cylinder up with $50 i would imagine those spending 100 bucks to fill just to last a week,and now that times are hard i do believe that people will actually stop driving.

With prices like that they have to. Especially if there working a minimum wage job.

**young one** · 05-23-2008 07:37 AM

Originally Posted by finlandscores

With prices like that they have to. Especially if there working a minimum wage job.

well it was my opnion..i mean where i live everyone has a minimm wage job so its an issu for us over here.

**rogercbryan** · 05-23-2008 08:11 AM

I wonder what the breaking point is. As other posters have said I to have heard people say that at $3… $4… $5 they would stop driving. The reality is much different. It is true that these prices are cutting deeper and deeper into everyone’s personal and business budgets. I give a lot of my employee’s gas allowances and for the first time last week I had to set new restrictions.

In the past four months I have moved closer to work (16 miles to 6 miles) and last week I finally got rid of my Ford Explorer and picked up a something that uses a lot less gas. Basically I’ve done everything I can to use less gas. At this point if prices continue to rise I have no way to lower my consumption.

My point here is that while gas expenses may have gone from 5% of your budget to 15% of your budget you still are not going to stop driving to work. You may not drive to your next vacation but you’ll still drive to work. If you consider that 15% of something is still more NET in your pocket then 0% of zero (if you didn’t drive to work to earn a paycheck anymore).

I move a lot of cars all over the US for my clients. In our local markets we have seen the price of Diesel go up almost 40% this past year from a little over $3.00 to $4.60 in some places. We have only been able to increase our fees by 5% do to the fact that there are plenty of other vendors out there who would love to steal our business. I haven’t fully been able to budget how this is going to effect profitability for the year but it sure is not going to help.

**jasaunders** · 05-23-2008 08:39 AM

So the whole point of the original post was that online spending will increase as a result of high gas prices.

As Roger pointed out, people will still continue to drive, at least at some lower boundary level that gets them to work, their kids to school, etc... As a result, discretionary income will decrease and overall consumer spending would decrease.

So no, I don't think online spending will increase, because consumers will have less discretionary income to spend in total; all consumption would decrease.