It has long been a given that American consumers not only want but expect basically everything – which makes finding the right mix of tobacco products all the more challenging for convenience store operators.
Tobacco is already as diverse a category as there is, including everything from cigarettes (both traditional and natural), smokeless tobacco (chewing tobacco/snuff, spitless tobacco) and cigars (premium and popularly-priced cigarillos) to electronic smoking devices, and OTP — an umbrella that covers moist snuff, snus (or pouches), loose-leaf and plug chewing tobacco and roll-your-own or loose/pipe tobacco. Then there are a host of smoking accessories like lighters, lighter fluid, butane fuel, matches, papers, cigarette cases, pipes, pipe cleaners, cutters, snuffers, air fresheners, humidors, tubes, injector machines and ash trays.
Factor in the ongoing legislative assault on all levels of government – a looming ban on flavored products being the most well-publicized at present — plus local economics and demographics, and knowing what to sell begins to verge on the Kafkaesque.
Begin with the numbers. Cigarettes are a nearly $57-billion-a-year category for convenience stores across America, with modest growth. Smokeless tobacco comes in at just over $8 billion a year but with stronger growth. Electronic smoking devices, though a smaller overall category – approaching $5.5 billion a year in c-stores – are growing by around 10% annually. And while cigarette lighters might sound like little more than loose change, yearly sales are now in excess of $600 million.
Distributors are another invaluable source of sales and volume data, as well as local trends and regional preferences. Many smart convenience store retailers gain a firmer handle on what is and isn’t selling by studying retail leaders in their own marketing area – not just c-store competitors, but tobacco outlets and even big-box stores.
Perhaps the most accurate and deceptively simple method of gaining insight into what a convenience store should stock is to come right out and ask the customers themselves. Two-way communication is essential in every business, and especially at retail. Have staffers engage shoppers with more than just the perfunctory ‘Did you find what you were looking for?’ on their way out of the store, and report what they hear.
Eliciting consumers’ wants and desires and paying attention to their answers cannot help but render a store more responsive to its supporters — and the added attention will help cement relationships by showing shoppers that what they think actually matters.
Convenience stores can protect their tobacco sales by doing everything they are probably already doing.
Protecting them from over-zealous politicians, unfortunately, remains a whole other matter.
Experienced c-store retailers know how to make the most of this essential category. Most of it has to do with adroitly managing the basics:
* Know the best-selling items and make sure they are in stock at all times.
* Don’t be afraid to stock newer items until you can determine whether they deserve a permanent spot in the set. In cigarettes, for example, organic and all-natural products are trending.
* Take full advantage of promotional programs.
* Make sure merchandising is neat, efficient and well maintained.
* Use eye-catching signage, both inside the store and at the gas pumps.
* Listen to consumers, and respond to their product requests whenever feasible. With so much of retailers’ tobacco business already regulated and controlled by the government and tobacco companies, the key is often simply listening to customers and giving them what they demand.
* Consumers love flavored tobacco products, so – unless and until they are legislated off of store shelves – keep them in stock.
* Likewise, carry popular package sizes.
* Make sure staff members can talk in an informed manner about the various tobacco products to help customers make informed choices.
* Know the relevant laws and regulations, and follow them.
* Make sure the cashiers are scrupulous about checking ID’s to avoid selling tobacco products to underage customers and the accompanying penalties.
Convenience store retailers also should not make the mistake of underestimating the popularity of OTP products, including moist snuff, snus (or pouches), loose-leaf and plug chewing tobacco and roll-your-own or loose tobacco. Pending excise legislation aside, these are solid growth items.
Consider upscaling the store’s cigar offering with premium product to be merchandised in a humidor.
Finally, becoming an activist against government overreach is arguably the single best long-range method for defending a convenience store’s tobacco business. C-store owners and executives need to be involved at the grassroots level and through organizations like NACS, NATO, NAG and others.