The vaping market offers massive growth potential at this time as consumers try to give up smoking and the keys to unlocking that growth is staff knowledge and a strong core range.
The vaping category represents an enormous opportunity for convenience retailers. The reality is that only around 17% of the £1bn category is accounted for by ‘traditional retail’ channels. In other words, about 83% of sales go through specialist vapeshops or online.
“The vaping category is currently worth £177m in traditional retail in the UK and the future is bright, with 11.5% growth in the last year [Nielsen, Q3 2018]”, says Ross Hennessy, Head of Sales at JTI UK.
But to make sure that bright future shines on convenience retail, there is a fair bit of work to be done by the sector to ensure it gets its share.
- Public Health England has stated that vaping is around 95% less harmful than traditional tobacco
- E-cigarettes don’t contain tobacco and don’t produce tar
- E-cigarettes don’t use combustion to generate vapour
- Vapour particles are 73% water
- Not all vape products contain nicotine, vapers often reduce their nicotine levels – eventually down to zero – as part of reducing consumption
Education focus
Key to driving growth back into the category will be education and training, which is why JTI has established a team of ‘Logic Champions’ for its important range of Logic vaping products.
“The Logic range holds a 12.4% share of the UK Independent and Symbol vaping market and 10.9% share of the overall UK vaping market in traditional retail [Nielsen, Q3 2018]”, says Hennessy. “With the vaping category expected to continue growing, we remain focussed on working closely with retailers to support and grow their businesses alongside ours, for the long-term.
“Our passionate team of Logic Champions are dedicated to sharing their knowledge and advice with retailers to make sure they are as prepared as possible to compete with multiples in vaping sales.”
Imperial Tobacco’s blu brand also agrees that training and knowledge is vital to grow the sector. Chris Street, Head of Trade Marketing, says “With a dizzying number of devices and liquids, many consumers seeking to enter the category are unsurprisingly intimidated by the sheer breadth of the vape offering. These consumers need knowledgeable advice from retailers on what to buy along with reassurances on product quality and the benefits of switching. By taking the time to expand their 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, including the benefits of switching, retailers and their staff will be able to provide an exceptional level of service to customers that will encourage them to return again and again.
Nick Geens, Head of Reduced Risk Products at JTI UK, offers some great advice on growing your sales.
Knowledge
- Be aware of the latest trends in the category and stock products to meet consumer demand. Retailers can visit trade websites like JTI Advance for a wealth of information or speak to a JTI sales rep.
Communication
- Communicating with customers is an area where independent retailers have an advantage over nearby multiples and vape shops. Using frequent conversations with regular existing adult vapers customers to adapt their ranges will help retailers maximise sales.
Display
- Vaping products should be displayed prominently in store, in a clear and tidy vaping display to ensure customers are aware of the choice and range available.
- For smaller stores, or those looking to introduce vaping products for the first time, a countertop vaping display solution is a viable option to test consumer response to the introduction of the category.
- Once stores expand their vaping range however, it is best to move to a category solution where vaping and tobacco products are displayed in the same gantry to ensure quick service time and repeat custom.
Range matters
With a well-trained team in-store, the second main tool in unlocking growth in the vaping category is a strong range that caters for the tastes of modern vapers.
Nick Geens, Head of Reduced Risk Products at JTI, says: “The UK is the second largest e-cigarette market with over 3.2 million adult vapers [YouGov, 2018], and with the market expected to grow, the category presents an exciting opportunity for independent and convenience retailers. We are continually updating and releasing products to ensure we meet the needs of the ever-growing number of vaping consumers in the UK, and hope that we can help retailers maximise sales in this expanding category by responding with innovative NPD.”
The latest data suggests that capsule and refillable products are currently the fastest growing devices and are now used by most adult UK vapers. All of the biggest vaping brands now offer a range of capsule and refillable devices that cater for the majority of vapers’ needs.
JTI has recently relaunched its Logic LQD range of e-liquid bottles with a new design and competitive RSP of £3.99. Retailers can also sell the revamped LQD bottles as part of JTI’s 3-for-£10 promotion
Geens comments: “It’s also worth noting that lower strength e-liquids now account for over 29% of the segment [Nielsen, Q3 2018], so the extension of JTI’s successful Logic LQD e-liquids earlier this year with the launch of a lower strength (6mg) variant offers retailers a significant profit opportunity.”
One of the most prominent recent trends has been the growth of the fuss-free capsule market. From a retailer’s point of view, capsules promise a more straightforward route to growth in the category because the purchase mechanism is very similar to that of tobacco. Customers simply choose a starter kit then buy new capsules as they require them.
Logic PRO is currently the number one capsule vaping brand in the UK, according to Nielsen figures to the end of Q3 2018.
One area to keep an eye on is flavours as Brett Horth, CEO of Vapouriz Group, says: “Our main advice to maximise sales would be to stock a wide range of quality liquids – in a variety of nicotine strengths and flavours.”
This is particularly true at a time of year like this where many people may be looking to quit smoking, as Horth explains: “To build on seasonal opportunities, giving up smoking remains the number one new year’s resolution, so make sure you are stocked up on quit kits and liquids for the new January vapers.”
Horth also highlights the ‘Vapril’ and ‘Stoptober’ initiatives as dates to mark in the calendar for further down the line.
But what exactly are new vapers looking for? “We tend to find the those switching to vaping start on a reasonably high nicotine content and a tobacco or menthol liquid, such as Original Tobacco and Double Menthol before reducing their nicotine strength and exploring the wide range of different flavours available,” advises Horth.
- The are 3.2m vapers in the UK [ASH, 2018]
- Dualists represent 46% of vapers [Kantar, 2018]
- Around 8% of adults vape in the UK [Kantar, 2018]
- 40% of smokers have never tried vaping [Public Health England]
- 70% of vaping sales stem from online or vape shops [Ecigintelligence]
- Current category margins are between 25-50% [Fontem, 2017]
