May 6, 2021
“Also run retail businesses.” That’s what the Twitter bio tells you about Alex Kapadia, the professional racer who dreams of winning the Le Mans 24-Hour, the greatest sportscar race of them all. But, make no mistake, his retail businesses are not just an “also-ran”, and one of the trophies in his cupboard is from Asian Trader, hailing him as the Vape Convenience Retailer of the Year.
Alex won the honourat the 2019 edition of the Awards for his Bargain Booze Select Convenience store in Dunstable, but the judges were impressed equally by of all his stores, and more specifically, his approach to the category.
“Alex has four stores which all have purpose-built e-cigarette cabinets. On the top half of the cabinet he displays the kit and accessories and the underneath he uses to organise and store 10ml liquid refills. Stocking over 200 strengths and flavours, he believes if customers can’t see you have the flavour they want they assume you don’t sell it,” the judging panel noted.
Alex has been focusing on e-cigarettes since around 2013, as he found that vape is not only better for people’s health but also better for the bottom line of his stores, offering up to 50 per cent in margins.
“We sell a lot of cigarettes with seven or eight per cent margin and it was the chance to do a category which offers 40 or 50 per cent margin where you have a lot of repeat business, so I just thought if we can switch a small number of cigarette customers over to e-cigarettes, we’re going to hopefully make a big impact on profit,” he says.
That line of thinking surely worked, but not without some solid groundwork and continued effort to help customers switch. He has done a great amount of research into the different brands available, the partners to work with and how the category really developed. And, most significantly, he made it a point that his team members are well-trained.
“We didn’t want to be another retailer with a counter-top stand trying to push a few pounds of sales but not living up to the vape store. We wanted our staff to know what they are talking about, so they can help new customers or teach customers when they just need a replacement coil or something,” he says.
They initially started off with a training program for all of their staff and then formalised that with an online module developed in partnership with some of the vape manufacturers. Vapouriz created training videos for them with multiple choice questions at the end. The staff needs to take the practical bit of training as well, where all of them had to handle the kit and learn how to change each of the coils and troubleshoot problems.
“This training is absolutely the most important part of it [that] I would suggest because staff have to feel confident in it. If we’re going to rival dedicated vape shops we’ve got to know what we’re talking about,” he says.
It doesn’t end there in this new and ever-evolving category, and Alex admits it’s a challenge to stay on top of things. “It is hard if you’re not always on the ball,” he warns. To tackle this, he relies on partnerships with vape firms, essentially offering a store-within-a-store concept.
“That allows us to tap into their knowledge, and what’s selling in all of their stores and also online to them, so that’s how we’re doing it,” he explains. “We piggyback on someone else’s knowledge.”
Display is another area that gets special attention in his stores. They came up with a cabinet design and made a dedicated area within the shop to display it, so that the vaping area looks like a proper concession. “We have 3 x 1m cabinets and on the wall above we have tried to make the area really consumer-friendly as we know that a lot of customers don’t understand vape if they are new to the category,” he says.
They have taken additional measures in consumer education, designing POS to take customers through the process of buying vape, so that they always had access to self-serve whether they are a Beginner, who needs a full introduction to the category; Existing customer who might want a better battery or a bigger tank which doesn’t need refilling as often; and Sub Ohm vape, which is less about the nicotine but gives people a long smooth full flavoured vape.“This helps customers to buy from the category even when the team is busy,” he says.
When it comes to the different options in the vape scene, standard e-liquids with separate devices account for almost 80 per cent his vape sales. The pod systems, and refillable pod systems, are also growing in popularity. “They are serving a portion of the market who had always been reluctant to switch to vaping because it was messy with having to carry liquids around separately and they thought it was too much hassle changing the coils etc,” he says. “So that’s sort of the current growth area.”
Sales tips, like the dramatic cost savings with vape –for example, cigarettes are easily £9 for 20 whilst liquid for vaping is only £3 for the equivalent of 60 cigarettes, meaning vaping is six times cheaper than smoking –are part of the training for the staff. But Alex observes that health is the main reason for people to switch, and as the Covid-19 pandemic has increased health consciousness among the public, this is a perfect time to watch for potential new vapers.
“There are pressures on people’s finances more now than ever but the cost saving has been a small driver in people wanting to give up cigarettes,” he says. “People are mainly doing it for the health reasons and most of them who haven’t given up now are less likely to switch.”
Each of his stores is located areas with two or three dedicated vape shops, and with these shops not allowed to open during the lockdowns to fight the pandemic, his own stores have been able to attract customers and increase sales. But, Alex says the competition from the vape shops have been getting strong over the years.
“Vape shops are evolving themselves. When they first opened they were generally not very nice places to visit, whereas now quite a few companies have made them into much more appealing venues. So I say that the competition from vape shops is always increasing,” he notes.
However, what might be in store for these shops, that have remained closed for most part of the past year, is uncertain and Alex says we might get a picture now as we come out of the third national lockdown and non-essential retail, which reopened earlier this month.
“We might see some vape shops just have not survived and some may have gone online and decide not to reopen the physical shop. We’ll have to see how that pans out,” he says. At the same time, with other convenience retailers starting to get more behind the category, he doesn’t expect any let-up in the competition generally. “Good retailers are already behind it,” he says.
There’s a Co-op next door to his store, and as a Bargain Booze, he finds them complementary in fact as “it brings a lot of people to the area.” A bigger range and low prices are the two factors that help him to take on the supermarket. “We sell the same products in many cases, but we have a bigger range of alcohol than they do, and more consistent prices. Our price is more everyday low price, rather than a high-low that Co-op operates,” he says.
Alex stresses that the convenience stores are well-placed – whether in terms of their smoker customer base, opening times or location – to attract potential vaping customers. “Customers liked the fact that we were offering that in a convenience environment,” he says. “Driving to town centre or a park, they can just pick it up. We were open till 10 o’clock seven days a week and that was a big bonus.”
However, he would offer a note of caution: “If [retailers] are going to do it, they need to really concentrate on it.Don’t do it half-heartedly.
“Go into it with a good display, good training for your staff and get your range from another partner [who] will be able to provide good support. Essentially, make yourself look like a vape shop within a convenience store.”
This April Bargain Booze completed two years under the Bestway Group, which acquired the chain following the collapse of former owner Conviviality in April 2018, and Alex says Bestway Retail have come up with one of the best ranges in convenience.
“We’re now part of the wider group with bigger buying power on certain products that we had before. So that’s useful. I think there are areas where they’re still improving, and where they’re looking to improve themselves. So that’s encouraging,” he says.
As a racer and driver coach, Alex has a hectic schedule on the racing tracks. The 40-year-old made his debut at Le Mans in 2015, and is a winner of an LMP3 race in the 2019 Michelin Le Mans Cup. Retail is no less competitive and Alex does the balancing by making sure that his store managers are well supported and have all the right training they need.
“We have conference calls and WhatsApp groups to keep in contact. So I just keep everybody targeted and all of them in the same direction,” he adds. And his key to staying ahead of the curve?Follow the trends.
“I like looking at the latest trends whether that is vaping or food-to-go, or more recently, the frozen ice cream that’s gone crazy. There are always new trends that are out there, make sure you get those,” he signs off.