We’re in the midst of a revolution. The tobacco category is undergoing upheaval as cigarette sales decline and other tobacco products move in to lap up the leftover market share. Changes are rapid as new products emerge, each with more sophisticated technology and packaging.
E-cigs, vapor, cigars, pipe tobacco, roll-your-own—they’re all demanding more attention, requiring a more purposeful, permanent place in the store landscape.
Some retailers are already making that change.
York, Pa.-based Rutter’s Farm Stores has dramatically changed how it manages and displays tobacco across its 60 stores. When the company saw hopeful predictions about e-cigarettes and alternative tobacco products coming to fruition in the second half of 2013, it could no longer treat the backbar as a cigarette haven that left little space for anything else.
“It all started exploding in 2013,” says Robert Perkins, Rutter’s vice president of marketing. “At the time, we were carrying one brand [of electronic cigarettes]. There were hundreds out there, so we looked at what the market-share leaders were and added two additional electronic-cigarette brands based on that.”
Rutter’s added Logic and MarkTen to the existing 21st Century Smoke offering, using countertop displays for the first 30 to 90 days of each brand’s debut to build customer awareness. Once established, the products moved to the stores’ backbars, configurations designed and manufactured by Harbor Industries.
“[Backbars] create a destination,” says Craig Neuhoff, director of new business development for Grand Haven, Mich.-based Harbor Industries, citing Harbor’s focus on making shelving versatile enough to look neat and organized with all kinds of inventory.
Neuhoff worked with Rutter’s on its redesign. “If you just have stuff everywhere on the counter, it creates more clutter, and if customers can’t see it, they aren’t going to buy it.”
Fixing the Fixtures
Once Rutter’s had decided to revamp its backbars, it went to its noncompeting retailer peers and asked for recommendations for display designers. It got bids from top companies, working with Altria in a special program to help fund its share space. It decided on Harbor Industries, and the rest was “fairly seamless,” says Perkins.
Of Rutter’s 60 stores, 22 have a low-profile backbar with windows above it. The rest have a standard 84-inch backbar, ranging from 8 to 19 feet long depending on the store layout. Rutter’s liked that Harbor offered black and silver fixtures, rather than dated beige and white options, and was impressed by Harbor’s adjustable shelving system.
Perkins especially liked the accordion-style system in which “instead of 3- to 4-foot sections, you had 1-foot sections, so it was more customizable.”
Harbor’s display systems also allows for efficient loading from the back of the shelving and can include counting mechanisms on its cigarette pushers, streamlining operations for stores that require employees to count inventory after shift changes.
According to Perkins, so far the adjustability of the displays has worked effectively for Rutter’s. “There’s going to be breakage occasionally with the plastic clips and other interchangeable parts, but they don’t cost much,” he says. Rutter’s keeps inventory of excess parts for the displays it maintains but hasn’t had to tap into it much.
The flexibility the company found in Harbor’s systems extended to its customer service as well. Neuhoff went over Rutter’s plan-o-grams and customized displays that worked best for the products they sold. When Rutter’s put its new backbar into a test store in December 2013, Harbor was there to install and adjust it. And as Rutter’s opens new stores or remodels old ones, Harbor has continued to be involved.
A Backbar Profıle
Jeff Arnold, a Salt Lake City-based operator of 45 Maverik stores, used to employ whatever temporary counter displays were provided by tobacco product manufacturers. However, in the past year, he’s made some changes. Arnold worked with backbar designer ImageWorks Displays, Winston-Salem, N.C., to install customized backbars with a sleek, modern appeal.
Like Rutter’s, Arnold chose black as his backbar color.
“The main thing we’re looking for in these fixtures is versatility,” Arnold says. “The landscape is changing so much, especially with vaping and e-cig products. We need to have fixtures we can change to address the merchandising of those products.”
Arnold is taking the advice of David Gesmundo, his ImageWorks representative, in trying to treat each tobacco subcategory as separate and distinct. The new backbars allow Arnold to take space where he previously would have had cigarettes and cut in e-cig products as much as he wants in the future. He can trade out pushers and dividers to accommodate different package sizes; although he doesn’t keep inventory of those extra parts, Arnold says ImageWorks makes it easy to order them.
Arnold also values the ability ImageWorks gave him to order what he needed for each store to accommodate a variety of layouts.
“If we redesign our stores, they give us the ability to customize our fixtures to fit our needs,” he says. “We can go high profile or low profile and key them together to the lengths that we need.”
Although he doesn’t have any data that confirms his sales have increased because of the new backbars, he suspects his improved numbers are at least related. But he sees other benefits, too.
“Our employees like them better, because the lower-profile fixtures we chose allow them to see out the windows now,” he says. “And our customers notice because it gives the whole store a more open feel.”
As tobacco technology continues to improve and products evolve, retailers such as Arnold will be prepared to seamlessly integrate the future into their business. Their backbars are already ready to go.
CONTINUED: Locking Up the Offering
Locking Up the Offering
How do you secure your tobacco products, safeguarding them from daily theft, without compromising the appeal of your display? Here are a few tips.
- Invest in a display system that has glass security doors you can remove. The adjustability of the doors will keep your display versatile, and the glass won’t interfere with product visibility.
- Train your employees to count inventory at the beginning of each shift and record and report their numbers. It keeps employees accountable and ensures that if there is a discrepancy, it’s discovered quickly.
- Make sure your backbar fıxture accessories are current with your inventory. If products fı t neatly and snugly into the display, shoplifters may be less likely to believe those products will be easy to quickly and discreetly snag.
Question the Future
As the director of new business development for Harbor Industries, Craig Neuhoff makes it his business to inquire about the future. Here are the big questions about the tobacco category he’s investigating right now:
- “E-cigs came out and were pretty big,” he says. “I want to know how retailers are reacting. If they have to add more space for electronic cigarettes, what are they taking away?”
- “What is the future of marijuana, and how will it work in convenience retail? Convenience is certainly used to dealing with regulated products. Will this be any different?”
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