Convenience stores have always excelled at giving the people what they want—even, at times, counterintuitively. Long a bastion of cigarette sales, c-stores are courting another kind of consumer: the quitter. Rather than lament the loss of a lucrative basket ring, retailers are seeking to go along with smokers on giving up a habit by helping them replace one product with another.
With new products hitting stores and even more on the horizon, retailers would be wise to give the smoking-cessation subcategory more attention.
Stocking the Shelves
Helping stoke activity for smoking-cessation products was last summer’s launch of a c-store pack size for Nicorette. GSK Consumer Healthcare, the Warren, N.J.-based unit of GlaxoSmithKline, launched nicotine gum Nicorette in retail in 1996, and the brand is now worth hundreds of millions of dollars, according to Scott Breisinger, national broker sales manager for convenience stores, alternate channel team, for GSK Consumer Healthcare.
“We currently have a 20-count Nicorette that we sell in convenience stores that doesn’t do very well because of the price point, from $12.99 to $15.99,” says Breisinger. “We went to Convenience Valet and said, ‘We can’t make this efficiently enough. Would you be interested in partnering with us?’ ”
Convenience Valet, a unit of Mechanical Servants Inc., specializes in repacking and distributing impulse health and beauty-care products and other general merchandise to c-stores and other retail channels. The Melrose Park, Ill.-based company now makes two Nicorette 10-count packages for GSK, in White Ice Mint and Fruit Chill, priced at about $7.99 to $8.99.
The package launched in summer 2017 and started arriving in c-stores last fall, when it was named a CSP Retailer Choice Best New Products Contest winner for health and beauty care in the general-merchandise category.
“We didn’t have an offering for the c-store consumer who’s trying to stop smoking,” says Breisinger. “And now we do.”
Smoking cessation is a relatively new retail subcategory for tobacco manufacturers themselves, beginning with a test launch in 2012 and national expansion in 2014 of Zonnic nicotine gum by Niconovum, a Reynolds American company.
Zonnic supports Reynolds’ Transforming Tobacco Strategy of informed adult choices and ensuring that youth make the right choice and avoid tobacco entirely, and it has led the migration of nicotine replacement therapy (NRT) sales to the c-store channel, says David Riser, vice president of external relations for RAI Trade Marketing Services.
With the first 10-count pack in the United States, Zonnic is “priced right for smokers,” Riser says, with smaller, more affordable pack sizes. “We have learned a tremendous amount about the NRT category over the last few years, and we are using that learning to inform our strategies for this category moving forward,” he says.
Lil’ Drug Store Products Inc., meanwhile, is preparing to launch its own smoking-cessation product in second-quarter 2018, says Doug Marquardt, director of marketing for the Cedar Rapids, Iowa-based packager and distributor for the c-store channel. It is looking at both a national and a private-label brand.
“The convenience channel is very underdeveloped for smoking-cessation products,” he says. “The flip side of that is that cigarette smokers are predominantly shopping at convenience stores, so we’ve seen opportunity there to fill that unmet need.”
Marquardt believes it is also an opportunity for meeting the needs of millennial shoppers who are generally more health-conscious. “Convenience stores, historically, haven’t been a destination for those things, but that’s changing,” he says.
There are three types of shoppers in convenience stores, he says: those who want lowest out-of-pocket cost, those who want best value and an equal number who have no preference. “We’re looking at meeting the need of the low-cost, low-price shopper. Currently, retail prices in the convenience-store channel range from $4.99 to as high as $9.99. We’ll likely be on the lower end of that spectrum.”
Merchandised to Move
Merchandising the category is different for c-stores than for the drugstore channel. “There’s a whole 4-foot section of Nicorette and private-label Nicorette in Walgreens. The consumer sees it and knows it and can find it,” Breisinger says. And after CVS eliminated cigarettes from its stores, it gave Nicorette—and the smoking-cessation category as a whole—a bigger presence, he says.
“It’s a totally different beast,” he says of the drugstore channel.
GSK recommends c-store retailers place Nicorette up front in stores where consumers purchase their cigarettes so that they will recognize the product and see that it’s available. (A customer must be 18 years old to purchase.)
“The consumer is not trained to go to the convenience store to buy Nicorette, nor are they going into the convenience store to buy Nicorette,” Breisinger says. “But everyone who smokes is always talking about quitting. We’re hoping that when they show up that it catches their attention.”
Reynolds recommends flexibility in merchandising in-set or off-set, says Riser. Smoking-cessation products should have “a permanent and highly visible home,” he says.
Fabulous Freddy’s Car Wash, a chain of eight car washes with gasoline and c-stores in Las Vegas, recently added Convenience Valet’s 10-count Nicorette product.
“We started carrying it to give that additional option to our consumers, to let them know that not only did we carry their favorite cigarettes, but we also carry a way to help them kick the habit without switching to an e-cigarette,” says Patsy Varpula, pricebook manager for Fabulous Freddy’s. “I think stores are more focused on capturing that transformation customer that is quitting cigarettes but wants to move onto smokeless products.”
If smoking-cessation products follow the trajectory of e-cigarettes and vapor, the category will expand relatively quickly, she says.
“C-stores are worried about capturing the customer that is quitting cigarettes by moving into vapor or smokeless, rather than capturing the customer trying to quit completely,” Varpula says. “Cigarettes and tobacco tend to be a huge percentage of inside sales for convenience stores, and as a retailer, we would prefer not to diminish those sales by trading a customer out of the category completely.”
Fabulous Freddy’s merchandises these products behind the counter, in view of customers who want to purchase cigarettes and in keeping with procedure for age-restricted products. And because tobacco customers tend to be creatures of habit, they will gravitate to the cigarette fixture, Varpula says: “If they are in the process of quitting, I want them to know that their alternative … is there.”
Varpula has not seen many c-stores with smoking-cessation items; the most prevalent has been Zonnic, she says. “As a convenience store with no kind of pharmacy licensing, we could never compete completely with drugstores, because they are able to dispense Chantix,” she says. Chantix is a non-nicotine smoking-cessation drug that requires a prescription.
The key to sales, says Varpula is to follow the shopper’s in-store routine. “If it’s near the cigarettes, it will be seen by the cigarette customer,” she says. “Candy, gum, chips all vary from store to store. But tobacco and OTP are always behind the register, near the cashier.”
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