April 19, 2021
In a fast-changing market, ensuring your business has the right merchandising strategy is essential. Tom Gockelen-Kozlowski reports
Any store owner knows that the key to a successful sales strategy lies in understanding your business’s location. In the vape and next generation nicotine products category, this is particularly acute.
“A store’s location can affect what vape products it stocks quite drastically,” confirms John Taylor, chief marketing officer at Vape Dinner Lady. “A convenience store in a village, where there’s no vape specialist store, has the opportunity to establish some more specialist product ranges and would be encouraged to expand its offering, to meet local residents’ needs.
“By contrast, a convenience store in a town centre or high street location, where it may be just a few doors away from a specialist vape store is going to find it more challenging to fully embrace the opportunities within the vape channel. But there are still gains to be had.”
Different channels undoubtedly have developed different strengths as they attempt to meet the needs of their customers. Duncan Cunningham, corporate affairs director at blu and Imperial says that many specialist vape stores do a great job of creating an atmosphere geared towards vape customers who demand on-trend products and expert customer services.
“Many specialist vape stores have invested significantly in their store interiors to ensure they offer maximum consumer appeal,” says Cunningham. “While these stores include an extensive range of products, they are often carefully displayed to promote a minimalist look, featuring sleek arrangements of products. These attractive interiors and displays help draw consumers in from the high street and drive footfall into the stores.”
Cunningham adds that convenience retailers should keep this level of merchandising in mind if they hope to compete alongside vape specialist stores: “Any independent retailers looking to compete and truly position themselves as a destination store for vapers, especially when there is a specialist store nearby, should consider investing in their displays and range to offer a similar shopping experience for their customers.”
Some of this churn – between the specialist and convenience channels – has been made unavoidable by the impact of the pandemic and lockdown restrictions, according to Gemma Bateson, head of Logic and Reduced Risk Products at JTI.
“A store’s location has become increasingly important over the past year. With vape stores closed throughout lockdown, more vapers have been turning to their local stores to purchase their devices and e-liquids. Local retailers should be able to meet this demand and offer a wide selection of different vape products. In addition, they should improve their knowledge of the category and offer bespoke customer service to these new shoppers, to help increase their customer base for the future.”
So, what have retailers done to maximise this opportunity? “Many local retailers have found success by increasing their product offering in line with market trends, such as stocking new flavours, nicotine salt e-liquids and varying strengths,” says Bateson. “In response to this, we launched Logic Compact Intense last year and also expanded our Logic EPIQ range with nicotine salts to answer the demand for a more enriched vaping experience.”
For emerging vape brands, there is a particular need to ensure retailers are presenting their ranges in the right way to new customers. Micaela Sangiovanni, senior trade marketing manager at RELX, says it is a particularly high priority for her firm:
“We are constantly looking into the best solutions to help retailers increase the sell-through of products in their stores. In terms of merchandising, RELX invests in high-quality point of sales material, which gives our products the correct visibility in-store to get customer attention. We currently provide our partner stores with LED display counter-top units and a tester display. We also provide stores with a variety of posters and leaflets, which explain the main attributes of our products, to help retailers engage customers in conversation with up-to-date product information.”
To support retailers and ensure they achieve the right level of merchandising, Sangiovanni says. “We work closely with our distributor to ensure that we support retailers at a national level. We also have a dedicated team of RELX sales representatives that serve stores across London and Birmingham. Our team works with individual retailers to better understand their consumer base and recommend stocked product ranges which best suit their market. The team also provide different tools, sell-in deals and premium point of sales materials to enhance the visibility of the product.”
The use of reps, who will work with stores of all kinds, one of the ways many brands ensure they can offer tailored advice to individual businesses. And for some suppliers this extends to in-house marketing support as well.
“Dinner Lady has a range of in-house capabilities designed to support all our retail partners – beyond the excellent relationships which our account managers and business development managers forge with their customers,” says John Taylor. “Our in-house marketing and design team produces bespoke retail solutions for any and every kind of store with accompanying point of sale materials, and our research and data teams support the sales teams with insight. We approach every new retail partner account as a fresh opportunity and ensure we meet the specific needs of that account to ensure success for the retailer.”
Another vape brand which puts an emphasis on tailored solutions for retailers is Aquavape. Ebrahim Kathrada, the firm’s director Ebrahim Kathrada talks Vape Business through the process. “After the initial Aquavape survey and plan our merchandisers work on the best range for the space available. The planogram has to reflect our ethos of range sufficiency, great pricing and multibuys, clear labelling and customer friendly layout.”
Kathrada also says that technology can play an important role in helping convenience stores bridge the knowledge gap with specialist businesses: “We were the first to launch the interactive digital vape screen within convenience to help the end user and retailers alike in putting the vape range in an organised, more shopper-friendly, manner. If customers require help or information and there are no staff around to assist, these screens act as an additional support point. We call it the silent salesman. It will ask you questions like, “how many cigarettes do you smoke per day?” and recommend you suitable lines. Or customers can filter the whole range very quickly by price, strength and flavour.
“In addition to this, we have been rolling out vape concession stores which are custom fit to the size available and professionally installed and merchandised. The displays are well lit, and products are displayed in a purposeful coordinated way to aid a customer’s journey. I think convenience stores have really woken up to vape and we have positioned ourselves over the years to be the trusted vape supplier.”
While emerging and specialist brands have invested in developing the right sales support for retailers in recent years, businesses which straddle both the tobacco and new nicotine markets have been able to utilise decades-long relationships with stores to provide advice and assistance.
Gemma Bateson says: “JTI continues to offer partnerships and expert advice to its retailers, which we encourage more retailers to take advantage of. As well as discussing vaping ranges, JTI can also help with merchandising. We have recently launched a new larger category management solution, where vaping, next-gen and tobacco products can all be displayed in the same gantry. Retailers can speak to their JTI representative about our new category management solutions, which are currently being installed on a trial basis.”
There is one last point which needs to be emphasised, however. While a store’s location and its competition might be a great guide to how to approach things, retailers should also keep in mind that their store is going to have a unique set of opportunities and challenges, simply because it is the only store with its exact location and customer base.
“Every store and its customer base are completely unique so there’s no one-size-fits-all approach to follow,” says Duncan Cunningham at blu and Imperial. “It’s important for retailers to consider various factors when deciding their range to ensure it meets the needs of their customers. This includes everything from the gantry and countertop space available, to what products are proving popular with customers (based on EPOS data where possible), alongside the latest market trends.”
Two strategies for success from Vape Dinner Lady’s John Taylor
Trading near to a specialist store
Where a convenience retailer is in close competition with a specialist vape store, they need to make sure they are aware of the offerings within that store and position their own offering strategically. They should become well educated in vape brands, and perhaps looking into offering brands or products the specialist is not stocking. Staff training will be important, as vape store customers are used to the expert knowledge on offer in specialist stores. In addition, focusing on convenience will help them, ensure that vape ranges are well positioned and promoted so that customers are aware of what’s available and can easily make their vape selection alongside convenience purchases.
Trading in a village shop
Where a convenience retailer is a lone outlet for vape products they have an excellent opportunity to boost their sales and revenue – as the vape category offers high margins, particularly when compared to traditional tobacco products. There’s a real opportunity to develop a specialism within convenience in this instance by closely studying and analysing the vape category and ensuring a broad range of products at different price points. Staff training and education will prove even more essential here too. Staff will need to be able to guide adult smokers through the vaping journey from introducing vape as an alternative to cigarettes, through the varying strengths and formulations of e-liquids to meet their particular needs.
How to merchandise your store
Understand your store
The first step towards building the right merchandising strategy for your business is understanding your business’s location, its customer base and – importantly – its competition.
Seek out partnerships
Brands both big and small want to work with stores of all kind to ensure their products are presented and sold as effectively as possible. This is a great opportunity for stores to get tailored advice.
With data and up-to-date PoS solutions, partnerships with brands can also provide access to new ways of selling vape products to customers. Ask their teams how they can help your business.
Keep up to date on trends and launches
Use titles such as Vape Business to make sure you are aware of all of the latest product launches and the best supplier advice on how to introduce these products to customers.
Be flexible in your ranging
With trends changing fast and more consumers switching away from tobacco your range needs to both cater for these shoppers but also remain profitable for your business. Regular range reviews are therefore vital.