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Home Features & interviews Worth the hype? Retailers views on heat not burn

Worth the hype? Retailers views on heat not burn

July 14, 2020

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Workers set an advertising poster for electronic cigarette Iqos on a billboard near the road in Varna, Bulgaria, July 2018. Photo: iStock

Heat not burn (HNB) is a global success story that is just starting to fully develop in our vape-loving market.

While a growing band of HNB products now exist worldwide, in the UK the market is still represented by just one device: IQOS. For this reason, the opportunity has taken time to mature for the convenience industry.

Take a look at your local pub’s ashtrays, however, and you are now more than likely going to find a HEETs stick stub alongside the cigarettes, a clear sign that the technology is taking off.

A recent poll of menthol smokers by IQOS manufacturer Philip Morris showed that 10% had either switched to or increased their consumption of heated tobacco after the menthol ban.

Kate O’Dowd, head of field for Philip Morris in the UK says: “Heated tobacco products currently account for 70% of the total retail value of our risk-reduction products (RRPs) globally and sales continue to grow in the UK. In 53 markets around the world, there are now more than 14.6 million IQOS users of which approximately 10.6 million have stopped smoking and switched to IQOS.”

With HNB increasingly looking set to become one of the most important parts of the UK’s tobacco alternatives market, Vape Business decided to speak to two store owners already profiting from the heat not burn market and learn what we can from their experience.

 

Kay Patel – Best-one, Stratford

The London retailer is seeing consistent growth after incentivising staff and riding the end-of-lockdown opportunity

Keep an eye on sales

Our HEETs sales are going from strength to strength and in terms of the IQOS devices, we’ve now sold 15 or 20 units in the past few weeks. Obviously, you never know if a particular person will stick to it but the fact that sales are growing suggest people are.

Prepare for buying in bulk

People are buying four or five packs at a time because they don’t know that they can pick up HEETs in other shops. I thought this would level off as distribution grew wider but it has carried on. I think people are going to use it more if they have extra packs in the house.

Younger shoppers are vital

Our customers are mainly around 30 to 35 and we’re seeing more women getting IQOS too. I think because it is it looks more fashionable – it looks like a lipstick case – that’s helped a lot.

Be ready for the return of socialising 

The return of the pubs saw a huge boost in sales for us. I don’t know how long it will last but right now the fact that pubs and bars are open has meant everyone is going out and they’ve been picking up HEETs for sitting on in pub gardens with.

Reward staff for growing sales

We’ve incentivised one or two members of staff in each of our stores and put them in charge of managing our IQOS range. All but one of these members of staff has now sold an IQOS unit themselves and this approach is working well for us.

Work out the right display option for you

Right now we don’t really have anything in store to tell customers that we stock HEETs apart from the IQOS starter kit display. We’re waiting for our reps to help guide us with this because these products don’t look right in the gantry but we don’t know how long we will be able to have them out on display.

HEETs sales success is part of a wider positive picture

HEETs aren’t the only thing which is going well for us. Our sales have been up across the board since the menthol ban, from the cards that you put in to cigarettes to myBlu and Logic and HEETs too. I did have a look at our sales of Sterling Dual and they are the same as last year too.

 

Sid Sidhu – Budgens Kennilworth, Warwickshire

A successful heat not burn range is part of a bigger focus on tobacco alternatives for the retailer

Create a sales strategy

Tobacco alternatives are a priority in store and we actually came up with a business plan specifically for this category. We have about seven bays in total and have become a vape shop alongside a convenience store, in many ways.

Use range to build loyalty

We sell all the flavours of HEETs and I know that customers are coming from miles away to shop with us. Once customers know that they can get their product with you, you have a customer for life.

Show you’re willing to invest

You have to show a little enthusiasm and passion for the category. If you do, I think reps really respond to that and one thing that has helped is that we have been getting weekly visits to help support our sales.

Assign HNB to specialists

We have two members of staff who are vape specialists – we have one member of staff focused on wine and another on hot food as well. Having knowledgeable staff who can answer customer questions is really important in building trust. We also offer a month’s warranty on our products.

Capitalise on the menthol ban

We built a plan for our approach to the menthol ban and began working on it in November last year. I don’t think this is something where you can put products in and just expect them to sell without any effort.

Take advantage of promotions

We ran a promotion to give out ‘free’ devices in store and sold 50 devices in a month. Customers had a QR code to use and would get a starter kit with two packs of HEETs for £10. HEETs are usually £5 each so essentially the device was coming free. It was a promotion which customers could only get with us.

HNB isn’t competing directly with other options

IQOS is a very unique product and if people feel vaping is not for them then – apart from pouches and sprays – there’s very little else on the market. I ask smokers if they want to save money and they always say “yes” so that starts the conversation.

 

Advice in brief

Utilise promotions

Tap into available promotions to encourage smokers to trial the heat not burn category first.

Have one in-store specialist

Knowledge is key in a product category that some customers will be unfamiliar with. Put one or two people in charge.

Come up with a plan

Sit down with your team – and your rep – to work out how to grow your sales for the long term.

Prioritise display

Help shoppers to know that you are a heat not burn stockist by utilising any display materials offered by suppliers.

HNB doesn’t have to be competition

Products like IQOS offer a different option than vaping and has role to play alongside this category.