Ideas to Increase Sales of Tobacco and Alternative Products

CHICAGO —CSP asked several tobacco and alternative back-bar product suppliers for advice to tobacco category managers at convenience stores on how to sell more products. Many highlighted having an ample and varied assortment.

Read on to see the other tips they offered …

“We believe retailers should offer an ample assortment of the various nicotine products that are available today. Consumers are looking for more choice in all that they purchase (not just the tobacco/nicotine space,) and retailers have generally embraced this challenge. As things like costs of goods, societal pressures and shifts in daily routines continue to inform consumer preferences, we believe that the retailers who offer a wide variety of products, especially in newer categories, will be best prepared to succeed," said Matt Domingo, senior director of external relations at Reynolds American Inc., Winston-Salem, N.C. 

“We also believe that the overall merchandising and appearance of these products can be equally as important as carrying them. Retailers should present the category in a way that drives ease of navigation and consumer understanding of available offerings."

Mike Sullivan, director of trade marketing for Jacksonville, Fla.-based E-Alternative Solutions, said:

Analysis: Sales analysis in any consumer product category starts with credible consumer product data for specific geographies and demographics of your stores. Understanding local consumer patterns provides an instant leg up in selecting the right products for the right locations. Next, take a hard look at your product lines. Do a quadrant analysis of lines and subcategories to determine which products sell. Following this, compare your existing plan-a-grams to sales data to determine areas ripe for development.

Feedback: Seek feedback from store supervisors, managers and suppliers. Seek out a cross-section of various managers to eliminate location or preference biases. Of course, comparing your analysis to actual sales data will determine where decisions were right or wrong.

Execution: Based on your data analysis, consider the current and expected adult consumer purchasing trends as you make decisions on products to stock and discontinue. While it is tempting to simply maintain shelf-space based on contracts, the better consideration is making space for performers based on scan data.

“Having a broad selection of products across every segment of the evolving tobacco category coupled with innovative consumer offers on multiple brands best positions retailers to succeed in both retaining and acquiring new customers,” said Frank Vignone, senior vice president of sales and marketing at Turning Point Brands Inc., Louisville, Ky.

“Black Buffalo believes that the very best consumer products lead with product, lean on brand, and most importantly, listen to their consumers. Which for tobacco category managers translates into the fact that you cannot simply spend your way into the hearts of adult nicotine consumers, you earn that through an outstanding product experience coupled with a brand that resonates deeply on an emotional level. In the [other tobacco products] category, deep discounting and heavy promotional spend will make a product temporarily increase velocity, but when the discounting ends, the share of market often plummets,” said Matthew Hanson, chief growth officer at Black Buffalo, Chicago. 

“With the [U.S. Food and Drug Administration] issuing most companies [marketing denial orders] last fall and putting out new restrictions on [electronic nicotine delivery systems] that use synthetic nicotine, very few vaping companies can legally sell flavored products today. As a result, many retailers are selling illegal products—either unknowingly or intentionally. The result is not good for customers or the industry. Retailers need to understand which companies are legitimately going through the process and overcoming the compliance challenges facing the category, especially with flavors,” said Niraj Patel, president and CEO of Bidi Vapor LLC, Melbourne, Fla.

“Tap into the value of price-value products across all categories like cigarettes, moist snuff and filtered cigars. We all know that retailers need to carry the major tobacco brands, but as we continue to see consumers downtrading, it’s important to provide the right mix to get the most from your valuable shelf space. Both price and quality reign supreme at the end of the day, and a reputable tobacco manufacturer can deliver on both of those, even at a lower price point,” said Ernie Teague, vice president of sales and marketing at Cheyenne International, Grover, N.C.

“Make-your-own products like filter tubes, injectors and cigarette tobacco can meet consumers’ taste preferences at a great value. For an initial cost less than a carton of premium cigarettes, consumers can choose their preferred filter style, length, and blend and can make their own with our trusted, easy-to-use machines. Even beginners can make a nearly perfect pack of cigarettes in about 10 minutes. We’ve seen that chains who carry a variety of our paper and cone brands in highly visible locations in-store (instead of under the counter) enjoy double- or even triple-digit growth,” said Becky Roll, chief revenue officer at Republic Brands, Glenview, Ill.