October 26, 2020
COVID-19 clearly isn’t going anywhere soon. As winter approaches, Tom Gockelen-Kozlowski looks at what we now know about operating in a health crisis
Trading through a pandemic has provided many challenges to convenience retailers, so it is vital that – where opportunities arise – stores grab them with both hands.
Thanks to a mixture of factors, it is vaping and other reduced risk products which have provided many of these opportunities to profit – primarily because the arrival of a respiratory illness has given so many smokers the impetus to quit.
According to newly-released data from the UCL Smoking Toolkit Study, more than 643,000 smokers have quit in England over the past year. As a proportion of smokers that’s almost twice the 4.3 percent quitting rate in 2019.
Most encouragingly – and likely as a result of the compelling number of reduced-risk products available on the market – 23.2 percent of those quitting this year have kept at it, compared to 14.2 percent in 2019.
Responding to the numbers, Hazel Cheeseman, director of policy at Action on Smoking and Health (ASH), said the increase was likely down to the pandemic. “The disruption to daily routines caused by social distancing and stay-at-home restrictions may have reduced or eliminated smoking or drinking cues, making it easier to change behaviour,” she said, adding:
“Homeworking may have encouraged smokers who are unwilling to light up in front of children or vulnerable family, while the cost of smoking may have been a big driver of behaviour at a time of financial turmoil.”
Convenience stores – made essential by ‘locked down’ consumers unable or unwilling to travel far or to multiple shops – have, during this time, benefited from being the only reliable place to pick up vape products, particularly after the closure of vape shops for almost three months this spring.
It now appears that stores have kept hold of many of the shoppers they made during this period.
“Despite vape stores reopening on 15 June, sales of Reduced Risk Products in traditional retail have remained seven percent higher than pre-lockdown levels,” says Nick Geens, head of reduced risk products at JTI.
Geens says independent stores have been the biggest winners, retaining growth of 11 percent. He says: “Initially, more people were inclined to visit their local shop because of convenience and perceived safeness. However, shoppers have now become more aware of the wide range of vaping products available to them, and just how easy it is to pick them up in traditional retail.”
This is clearly a game-changer for the category and suggests that vape may have taken a further step up the list of priorities for many store owners. And, Nick Geens says, this has consequences:
“It is therefore important for retailers to make the most of this opportunity and retain the customers they have served over the last few months by effectively managing their vape offering.”
With tighter restrictions back in place in many parts of the UK, what can you do to capitalise on this unexpected opportunity? How can you get your business ready to step up? This week we find out.
One rule for operating in a pandemic is that any good practice that was already advised is now essential, as the stakes rise dramatically. “Similar to before, retailers should ensure they maintain a good level of availability across best-sellers and popular e-liquids in their area,” says Nick Geens. “It is also vital that retailers and their staff take the time to learn about the category and have up-to-date knowledge,” he adds.
Knowledgeable staff and good availability combine to create one precious commodity in a pandemic: trust. “Once a customer trusts a retailer, they are more likely to return, which will maximise profits in the category,” says Geens.
For some businesses, maintaining availability means working closely with a company that manages the category on their behalf. Elite Mobile’s national account manager Bill Orchard says: “Our mission is to offer retailers a one-stop-shop. We have a consignment model where our reps put out a display and stores only pay for what they sell – and make a substantial margin. This way there is no issue, with a retailer having maximum availability.”
In an era of social distancing, customers are understandably wary of spending any more time in store than they need to. “It is vital that, in order to get their fair share of the category and its growth, independent retailers have a professional, well-managed display to gain and retain customers,” says John Patterson, sales director at Juul Labs. “Smokers are generally creatures of habit – they buy the same brand of cigarettes using the same store to purchase their tobacco. Vaping displays which are clean, well merchandised and provide a range of alternatives to cigarettes will have greater appeal for a smoker looking to switch away from cigarettes and increase the likelihood that they will continue to purchase from your store.”
Duncan Cunningham, corporate affairs director at Imperial and Blu, meanwhile, recommends stores that have the space consider secondary siting. He says: “Display has a crucial role to play given the in-store restrictions in place as part of the COVID-19 pandemic. Many consumers won’t wish to handle products in order to look at them before they buy and may also be inclined not to ask questions at the till point to avoid queues building up behind them, which can be intimidating. With this in mind, it’s important retailers have a strong visual display of vaping products, positioned away from the main gantry where possible, with clear information on pricing to enable customers to browse at their leisure without the need to handle and inspect products.”
The rise of the vaping category has been the result of – among many other things – the hard work of a new generation of sales reps. One key effect that COVID-19 has had on the industry is highlighting the need for stores to take pro-active steps to improve their category knowledge and management for occasions when reps aren’t able to visit.
Thankfully, alongside resources such as Vape Business, suppliers have been utilising their own sites to share information. Nick Geens says: “JTI Advance provides retailers with key category insights, news on product developments and up-to-date industry and legislative information is constantly updated and can provide regular training to suit the busy schedules of retailers.”
Alongside this, reps are now back working across the UK, meaning stores have the best of both worlds. “Our sales force restarted in-store visits earlier in the year and can answer any questions that retailers might have in the category,” says Geens. “We have strict guidelines in place for these visits, including the use of approved PPE, increased social distancing measures, and where possible, we aim to pre-plan any store visits and in-call objectives ahead of arrival.”
Top tips for operating in a COVID-19 new normal