We all know that vaping is big business but is it big enough for you to make space for it by stopping selling alcohol, most of your grocery and most of your household ranges? For most of you the answer is probably a ’no’ but not for Rusdene Services, which has given over 35-40% of its shopfloor to a Vapestore ’shop within a shop’ at its Waterlooville site. And the company has smaller versions of these ’shops within a shop’ at its four other sites.
Rusdene’s marketing director, Paul Lodge, explains: "We wanted to clear up our e-cig and e-liquid offer. On the counter, the products were piled higher and higher, so much so that it was difficult for customers to see over them and interact with the staff.
"We put in a new cigarette gantry which consolidated the space and gave us more room but vaping is a massively growing market and we believed that to do it properly, you need a full offer with the type of range consumers expect to find in a vaping shop. We also thought it was important to have a testing station for consumers."
As for the dramatic cuts in the Waterlooville site’s stock, Paul says: "Historically we had done very well at Waterlooville as a convenience store but in the past 20 years we had more and more competition across the board from Sainsbury’s, Lidl and McDonald’s and we knew our offer had to change. We’d always done lots of hot food, alcohol and snacks but these categories were being eaten away by the competition. Recently we were getting 80% of our sales from just 20% of the shop. We had dead space so we approached Vapouriz about the ’shop within a shop’. We were already selling their products through a third party so knew they were popular."
The team at Rusdene worked out where they thought the concession should go and worked with Vapouriz to get it done.
The project was totally funded by Rusdene and Paul says it cost them £50,000-£60,000 as it involved a major shop refit with new flooring, signage, redecoration and the installation of the testing station. There was also a one-off fee paid that had to be paid to Vapouriz.
Staff received a full day’s training at Vapouriz’s HQ plus there is ongoing training too. And Vapouriz staff visit regularly to tell them about new products and to ensure that everything is running smoothly.
The Vapestore at Waterlooville opened in February and is already proving to be a big success. "Everyone has been incredibly positive about the new-look store, even the non-vapers like it because it is much more light and airy now. "The change has given the site a new lease of life. Now we use our prime retail space to sell impulse lines. It’s all been very positive for the business with vaping sales up over 300%." Paul says the Vapouriz shop appeals to both hard-core vapers and newer ones, who are keen to quit smoking traditional cigarettes.
At the other four Rusdene sites, the vaping sections have all been developed slightly differently to suit the customer base.
These four either have half the ;shop within a shop’ version or a kiosk but all are trading well: "We are very happy with the performance at the other sites where we have seen a 100% uplift in vaping sales," says Paul.
There is a ’vape champion’ in each shop but all staff have had training so they know all about the products. "This means we have staff who know what they are talking about and they can recommend what’s best for each customer," he continues.
Chris Street, head of trade marketing at blu UK, believes it’s vital that staff understand not only what products they are selling, but also the customers who they are selling to.
"While research shows that 70% of vaping sales stem from online or vape shops, there is substantial scope for retailers to reap their share of vape-related sales. The unique relationship enjoyed between retailers, staff and their shoppers, presents a huge opportunity for the traditional retail channel," says Street. However, he adds that with a ’dizzying number’ of different devices and liquids now available on the market, many consumers who want to start vaping are intimidated by the sheer breadth of the vape offering. "These consumers need knowledgeable advice on what to buy, along with reassurances on product quality. By taking the time to expand staff understanding of the category, retailers can effectively advise these customers and grow their sales as a result. Training is key to success in this regard and by making the time investment to educate all staff on the category, and different terminology used, retailers can provide an exceptional level of service to customers that will encourage them to return to the store again and again."
Street says the growing number of dedicated vapers and ’dualists’ are increasingly seeking out simple solutions. "If we look to the US, the biggest vaping market, pod mod systems are a key growth category, highlighting the big sales potential for them here in the UK. (Pod mods use a prefilled cartridge, called a pod, that holds the e-liquid).
"Pod mods offer vapers and smokers a much simpler format to use and an easier experience in the transition from smoking to vaping. This, combined with the marketing support that pod mods have been receiving, including our latest myblu marketing campaign, means that vapers and smokers are more aware of these innovations and curious to try them." The myblu device launched in the spring of 2018, following two years of development and vigorous testing. Street says that thanks to its ’exceptional performance and vaping experience’, and its easy-to-use pod mod design, myblu has grown extensively in distribution and availability.
"Alongside myblu, we launched our Intense Liquidpods featuring nicotine salts (nic salts). Devised by smokers for smokers, nic salts result in nicotine being absorbed into the body faster than normal e-liquids. This rapid absorption allows myblu Intense to more closely replicate the experience of smoking a traditional cigarette, appealing to adult smokers looking to switch for the first time, or those who have tried vaping in the past and haven’t been completely convinced."
Street says another trend worth mentioning is flavours. "The upcoming ban of menthol cigarettes in May 2020 presents a significant opportunity for retailers (and the vaping category) as consumers continue to seek out similar flavours from other alternatives. Retailers should stock up on menthol e-liquids and liquidpods, especially those including nic salts like myblu Intense, and be aware of the forthcoming changes to legislation, in order to be well positioned to help smokers switch to something better."
As well as seeking out the traditional menthol flavours, Street says vapers are also looking for unique combinations that blend different flavours together. Research shows that fruit-based flavours are increasingly preferred so to cater for this demand, he recommends retailers stock a variety of different menthol-based flavours such as Blue Ice, which has hints of blueberry.
One brand that has been making big waves in the UK is JUUL which, after only seven months on the market over here, has become the UK’s number one closed vaping brand (IRI data). Closed systems consist of only the rechargeable device and a replaceable cartridge.
Launched in ’traditional retail’ last November in Sainsbury’s, JUUL has since secured key listings in a number of retailers and now has a 6.8% share of the total vaping market in traditional retail and 36.8% of sales of the top four closed pod systems (JUUL, myBlu, Vype Epen3 and Logic Compact).
John Patterson, sales director for JUUL Labs, says: "Closed pod systems now account for almost 20% of the total vaping market in traditional retail and continue to be the driving force behind the category with over 12% like-for-like sales growth in the past month. This follows continuous growth since the beginning of the year while open system sales actually fell by over 2% in June"
Patterson says JUUL is driving the growth with a 27% uplift in June sales compared to May and adds that it is the only major pod brand to have achieved double-digit sales growth every month this year.
But despite market trends, he worries that independent retailers’ vape fixtures do not always reflect customer demand. "Convenience and impulse outlets are still some way behind the market in terms of product offering. In fairness, this is not necessarily of their own doing as their traditional wholesalers have been slow to embrace vaping products, there has been a lack of impartial category advice and they have been seduced by slow-selling, high-margin products. Despite having 45% of the tobacco category in terms of sales they have less than 10% of vape sales which presents them with a massive opportunity.
"At least 20% of a retailer’s vape fixture should be allocated to closed pod systems with the key brands having major visibility within the fixture. JUUL is now the market leader in closed pod systems and should be a must stock for any retailers offering vaping products."
JUUL recently launched new-technology JUULpods to reach a broader range of smokers in the UK who want to switch from traditional cigarettes. The new JUULpods are available in an 18mg/ml strength and a new 9mg/ml strength across an adult-oriented flavour range.
The new JUULpods use a cotton wick, rather than a silica wick, to provide a more satisfying vapour experience. The new 18mg/ml JUULpod contains the same amount of nicotine as the previous JUULpod but offers more consistency puff-to-puff and has the potential to deliver more nicotine per puff and more vapour depending on usage patterns.
The new 9mg/ml JUULpod offers adult smokers a lower nicotine alternative. Both JUULpods are compatible with the existing JUUL device.
Patterson explains: "Since JUUL’s launch into retail in November, we have increased its distribution to give adult smokers greater access to our products, and we believe the new JUULpods will deliver a more satisfying experience to a broader range of adult smokers looking to switch."
Recent distribution agreements with Nisa and Bestway could potentially give an extra 10,000 retailers access to the JUUL range. Any retailer stocking JUUL is required to sign up to JUUL Labs’s Challenge 25 policy which mandates all retailers to ask for authorised identification from shoppers if they appear to be under 25 years of age to prove that they are over 18 years old - the legal age to purchase JUUL and other vaping products.
Double Drip display
Vapouriz has a new Double Drip free-standing display unit, which two large forecourt groups will be taking one of which is Applegreen.
Originally a sub-ohm brand, Double Drip now offers sub-ohm, 50/50 and nic salt flavours to appeal to consumers who have different tastes, which can change over time.
Shane Gurney, marketing and communications manager at Vapouriz, explains: "Traditionally, nic salts offer former smokers a throat hit similar to that of a cigarette. When vapers want to experiment with different devices, 50|50 is perfect because it can be used in both classic and sub-ohm vape kits. Finally, our sub ohm liquids offer vapers a slightly less harsh, but incredibly flavoursome vape.
"Typically sub-ohm liquids are not offered in strengths as harsh as that of nic salt liquids, therefore they are perfect when gradually reducing your nicotine intake over time."
Double Drip features a range of fruity, sherbet, menthol and dessert flavours, all in attractive and colourful packaging.
Make more time for cigars
The UK cigar market may not be as dynamic and fast moving as the vape one, but it is still worth just under £200m a year and cigars typically offer three times more profit margins than cigarettes, so it’s absolutely one that is worth getting right. That’s the view of Alastair Williams, country director at Scandinavian Tobacco Group UK (STG UK).
"Miniature cigar sales continue to dominate the market and account for over 82% of all cigar sales in forecourts, which is good news for us as we have the market-leading brands," he explains. Williams adds that STG UK is very fortunate to have a portfolio which ticks all the boxes when it comes to the UK cigar market. "The jewel in our crown is, of course, Signature (formerly known as Café Crème), which is easily the biggest player in the category and the UK’s number one miniature cigar. We also have Moments Blue, which is the UK’s fastest-growing cigar and second best-selling miniature cigar, and finally our Henri Wintermans Half Corona holds the position as the UK’s favourite medium-to-large cigar, so if forecourt retailers simply stock these three, they should be able to perfectly meet the needs of each and every one of their cigar customers."
Williams says that when he visits forecourts, he’s often asked how sites can sell more cigars. "Aside from stocking the right brands, there are one or two other things to consider. Our research shows that most smokers are very open to trying cigars and are willing to consider switching given a recommendation from store staff.
"To make the most of this opportunity, education is key. Retailers should invest in upskilling their staff to develop their understanding of the different cigars available, and what type of consumer they are most suited for.
"Combining their insights on the category with their knowledge of their customer base is vital. It’s important to tailor the range to appeal to local tastes. Even when looking at the established value-for-money trend, this can mean different things to different people, so retailers should shape their range with their customers in mind."
Getting your accessories right
Republic Technologies has been busy developing new lines that tap into consumer trends including OCB Virgin Slim and Slim & Tips, for consumers looking for an unbleached paper and a softer smoke; Swan Ultra Slim, the thinnest ever Swan filter and a premium quality product aimed at discerning smokers; and Swan ’Eco’ filters, the most environmentally friendly Swan product ever.
Featuring an unbleached paper with a natural brown colour, OCB Virgin Paper offers the highest level of rolling paper quality. Manufactured to the highest standards to offer a silky touch, lightweight feel and premium quality, OCB Virgin aims to provide consumers with the best possible rolling experience.
Gavin Anderson, general sales manager at Republic Technologies, comments: "Each leaf is gummed with OCB natural acacia gum, sustainably sourced from African acacia trees, which is 100% natural, vegetarian, and GM free."
OCB Virgin Slim and Slim & Tips are now also available in a slim vertical box, helping retailers to manage shelf space.
"Forecourt retailers who stock the right range of tobacco accessories and merchandise them accordingly will see the best results," says Anderson.
"Our sales team offers expertise and cross-channel category insight to our trading partners, and we’re committed to working with our customers to drive growth within the tobacco accessories category." Anderson recommends using display stands and off-gantry fixtures where possible, to signpost the tobacco category and drive impulse sales of accessories.
Rizla tucks in
Imperial Tobacco has recently relaunched Rizla papers packaging, with each pack now featuring a ’tuck-in’ closing mechanism designed to reduce wastage, plus a ’soft touch’ finish designed to make the packaging feel more tactile.
The best-selling Rizla papers are Medium Thin Green and Medium Thin Red, which are available in packs of 100 (Regular) and 50 (King Size) at rrps of 27p and 67p respectively.
Imperial says forecourt retailers shouldn’t forget about Rizla tips either. They’re available in several variants, from Slim (rrp 72p), Ultra Slim, Natura Ultra Slim and Menthol Ultra Slim (all with rrps of 79p).
Meanwhile, the tobacco giant says Rizla Polar Blast is the first ever roll-your-own (RYO) filter tip to contain a Crushball, bringing the popularity of factory-made cigarette Crushballs to the RYO sector. The squeezable filter tip means adult smokers are able to ’click’ to enjoy the taste of mint whenever they roll their own. Rizla Polar Blast is available in packs of 60 tips, rrp 99p.
Finally, Riverstone is Imperial’s new RYO brand. Developed to offer a high-quality, easy-to-roll blend at an affordable price, it is cut using an ’innovative, bespoke manufacturing technique’.