MIAMI -- Looking beyond the recent NJOY bankruptcy to assess the e-cigarette market moving forward, one industry consultant reflects on the impact of brick-and-mortar retail and what convenience-store operators should consider if they want to sell more vaping-related products.
Consultant Cynthia Cabrera with the Miami-based Cating Group spoke with CSP Daily News recently, pointing out ways NJOY, Scottsdale, Ariz., raised the visibility of e-cig and vaping devices, while at the same time, needed to better understand the overall market. Here’s some of her thoughts:
Q: How did NJOY help the e-cig and vaping industry and what were the core reasons for its Chapter 11 filing last month?
A: Certainly NJOY did a lot as an innovator to bring e-cigarettes and vaping to what I would characterize as a more mainstream market, namely convenience stores and other traditional retail outlets. But by the same token, they never really reached out to the core vaping market or diversified their products in time. It’s hard to say exactly, but various factors may have led to the bankruptcy filing, particularly its Kings 2.0 launch not being fully accepted by the marketplace and the huge costs associated with complying with the U.S. Food and Drug Administration’s new regulatory landscape.
Q: Can you be more specific regarding their product diversification?
A: NJOY initially came out and were very successful with disposable, closed products, meaning it was a self-contained product. They were slow to move to open products, where core vaping customers liked the ability to customize their devices, put in flavors they wanted, change batteries, work with more open systems. Secondly, they never seemed to reach out to vaping shops, preferring to go the route of more traditional retail, such as convenience stores.
Q: How would you describe the differences between c-stores and vape shops in terms of selling vaping products?
A: Let me first say that brick and mortar had a lot to do with the growth of the vaping market. These products were originally only sold online. As vaping shops grew exponentially, so did the market. In 2011 there were only a handful of vaping stores. By 2013-2014 things just exploded. Today, there’s close to 10,000 nationwide. Brick and mortar has become the backbone of industry. But to your question, vaping is about being face to face with the consumer. It’s about activating that consumer and keeping them informed. It’s consultative selling: taking the time to meet customers and explaining the differences in products and flavors. It’s not like customers would come into the store, pick up a Red Bull and walk out.
Cynthia Cabrera has been the vice president of compliance and logistics for an online e-cigarette company and is a former executive director of the Smoke-Free Alternatives Trade Association, Washington, D.C.
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