The hotly anticipated boom in UK vape sales might not have materialised just yet – but vape can still deliver a hit for convenience retail.
By Gaelle Walker
It’s an unfortunate fact of life that now and again not everything lives up to our expectations.
For all the initial hype and hysteria, things occasionally fall just that little bit short of what was promised: That ‘cutting edge’ coffee machine that was supposed to froth up your footfall, the season finale of Game of Thrones, cronuts.
The same could be said for vaping, which at the start of 2020 was pumped and primed for a meteoric rise in sales following the demise of menthol cigarettes. The reality for many retailers however, has been rather less explosive – more hot flush than big bang.
However, given the impact of the Covid-19 crisis, that’s perhaps hardly surprising (specialist vape stores were closed for large parts of 2020, while many locked-down smokers parked plans to quit with the help of vape products – meaning fewer new entrants to the market.
But, with a current estimated value of around £1.2bn in the UK, that’s certainly not to say that vape doesn’t remain a crucial category for stores looking to boost sales and loyalty – and nor that it can’t achieve its long-promised glory.
In-fact for those convenience retailers who have invested in the category despite the recent challenging times, vape has been rather victorious.
According to data from Mintel’s Smoking Cessation and E-cigarettes UK 2021 report, vaping rates have increased since the start of the pandemic, “likely for the same reasons that smoking has increased e.g., boredom and stress”.
- Ensuring vaping products are displayed clearly and prominently in store is of key importance – especially now when many customers are still reluctant to touch or handle products and surfaces.
- If possible, Imperial recommends displaying vape products away from the main tobacco gantry, with clear information on pricing to enable customers to browse at their leisure – without the need to handle products.
- For smaller stores, or those looking to introduce vaping products for the first time, JTI says that a countertop display solution is also a viable option to test consumer response to the introduction of the category.
- Once stores expand their range, JTI says it’s best to move to a vape category solution, where products can be displayed in the same gantry to ensure quick service times and repeat custom.
- Imperial also recommends stocking at least one open and one closed system from a big brand such as blu. Pod-mod systems “should also be a focus as they have become increasingly popular thanks to their ease of use and flexibility”.
- Devices should also be supported with a strong portfolio of e-liquids, especially fruit and menthol flavours, in a variety of nicotine strengths, including nicsalts.
- Proactively engaging with shoppers at the till point is also key. Retailers and store staff can use these conversations to not just to advise customers on range and supporting promotions but also as an important intelligence-gathering tool to help them shape their future offers.
- As an incredibly fast-moving category, it’s also important for retailers to keep one eye on the emerging trends in next generation nicotine products and be prepared to adapt their range to incorporate any new products they think would work for their customer base.
- Imperial recommends making room for a small sample of new products on a regular basis to enables retailers to trial products and assess interest before investing.
- Keeping up to date with the latest news, information, promotions and opportunities is also key. Fortunately retailers now have a wealth of data available at their fingertips via apps such Imperial’s Ignite, as-well-as JTI’s trade website, JTIAdvance.co.uk plus of course their local sales representatives.
With more time at home to trial, existing vapers have also been busy experimenting with different nicotine levels and flavours, meaning that retailers offering a wide range of innovative products and choices have reaped rewards – especially those who also offer an online ordering and delivery service.
And while rates of innovation have slowed from the dizzy heights seen in 2019, again largely due to the Covid-19 uncertainty, that’s certainly not to say it’s dried up.
In-line with a growth in the disposables market, the start of the year saw vape brand Dinner Lady launch a new £3.99 disposable Vape Pen range in eight flavours, including the brand’s best-selling Lemon Tart and new-to-the-UK blends Banana Ice and Strawberry Ice.
Featuring nicotine salts, the slim-line pen has been designed to target new vapers transitioning from traditional cigarettes, as-well as established vapers looking to pack a pen as a back-up for when out and about.
Disposable vape brand Geek Bar also brought a number of new flavours to the market including Strawberry Ice Cream, Geek Berg and Pink Lemonade.
Great advice on developing your vape sales in-store:
- Establishing a customer’s level of vaping experience is probably the key starting point when taking about vape products and providing a customer with the right advice and products for their needs: are they entirely new to the category, have they dabbled with vape before, or are they old hands looking to trial some NPD?
- If they are entirely new to the category, it’s also important to ask about their smoking habits: are they, or were they, a heavy or light smoker?
- Do they have any flavour preferences, such as menthol, tobacco or fruity flavours?
- Have they tried certain devices before? If so, ask what they liked or disliked about the experience, nicotine hit, flavour, practicality?
- It’s important to note that many adult smokers who have dipped their toes into vaping before may have had unsatisfactory first experiences (especially in the category’s infancy when product performance was nothing like it is now).
- These negative early experiences could have clouded their judgement on the category as a whole meaning that providing these types of prospective customers with the correct advice and products for their needs is particularly key to win sales and those all-important repeat purchases.
- Based on these answers, store owners and staff can then tailor their advice on the devices, flavours and strengths that would be best suited. For example, if they’re a heavy smoker that’s completely new to the category, focusing on easy-to-use pod-mod devices and nicsalts would probably be the best starting point.
- Training staff via the use of product demonstrations and allowing staff to get to know the different components using demonstration models and sample liquids, will also go a long way towards helping really help them understand more about how they work.
- Using similar demonstration models can also be a great way to educate customers on the devices before they buy.
But while disposables have been basking in the glow of growing popularity in the past year (albeit with a side-serving of negative press which we’ll come on to later) it’s the closed tank and pod-mod devices which continue to drive the most sales for convenience stores, as JTI’s UK Head of Reduced Risk Products Gemma Bateson explains: “The vaping category remains a key category for retailers, with strong year-on-year growth.
“In particular, closed tank devices, or pod-mods (such as JTI’s Logic Compact) are currently the fastest growing vaping segment in the UK, as well as the biggest segment within the category for value sales.
“Vapers are looking for convenient and easy-to-use devices that they can experiment with in terms of flavours and strengths to find the right fit, making these devices an important must-stock.”
RELX agrees that convenience will continue to be the driving factor in next-gen nicotine selection – with consumers increasingly looking for quick in-store transactions and easy to operate vaping systems.
“At RELX we anticipate closed pod systems will continue to grow in popularity as these devices meet consumer demand for a simplistic system which is easy to charge and activate,” senior Trade Marketing Manager Micaela Sangiovanni says.
“Closed pod bundles which come complete with a pre-charged vape device, USB charging cable, long battery life and ready-to-use flavoured pods are perfect for smokers and vapers on the go and will continue to grow in popularity into 2022,” he adds.
Imperial Tobacco & blu UK Corporate Affairs Director Duncan Cunningham is also optimistic about the future of pod-mod systems such as its myblu device.
“Whilst open systems have traditionally dominated the vaping category (currently making up 76% of the market), the introduction of pod-mod devices in recent years has seen closed systems, such as myblu, continue to trend upwards, regaining its share of the category back towards 24%.,” he says.
“The myblu device combines the performance demanded by experienced vapers with the ease-of-use appreciated by new entrants to the category.
“The device’s hassle free Liquidpods allow vapers to switch between flavours in seconds via a simple one-step ‘click and go’ system.”
Away from vaping, growth in the heated tobacco category is also continuing to gather momentum as a growing number of existing adult smokers look for alternative but familiar tobacco experiences in the form of heated products.
The Heated Tobacco category is now worth nearly £2m a week in traditional retail, according to JTI, with independent stores in the UK experiencing heated tobacco sales of £21m in the last year and growth of 27.4% year on year.
The space, which up until the end of last year had been dominated by PMI’s IQOS device has been somewhat shaken up by the arrival of JTI’s Ploom brand in the UK, which launched following successful sales in Japan, Russia and Italy.
The device is sold alongside compatible EVO tobacco sticks, which are available in four different flavours.
JTI’s Bateson added: “Although Ploom is only available currently in a select few accredited retailers in London, and the EVO tobacco sticks for retailers within the M25, we have our sights set high and the ambition is to see Ploom become the number one heated tobacco device in the UK.
“We are looking to get this product into the hands of other retailers as we continue to grow, so for now, watch this space!”
Over the past year within traditional retail, nicotine salts (which result in nicotine being absorbed into the body faster than normal e-liquids) have grown to become the preferred liquid for pods.
In fact, Imperial’s best-selling variant in the myblu range is now the Menthol Intense Liquidpod, highlighting the continuing consumer shift towards nicsalts, Cunningham added.
And, as we barrel towards the end of 2021 and the dawn of the annual New Year’s quitting opportunity, a further boost to vape sales could be in the offing.
This January, the UK Vaping Industry Association (UKVIA) will join forces with the ‘Smoke Free’ stop-smoking app to encourage more smokers to completely give up their habit.
The new campaign, which will promote vaping as a successful quitting ally, will be the latest in a series of recent joint initiatives between the two organisations.
And that’s not all. Last month the Medicines and Healthcare products Regulatory Agency (MHRA) issued updated guidance encouraging vape manufacturers to license their products as medicines – a move which could pave the way for the potential prescribing of e-cigarettes by healthcare professionals.
The move, which could also potentially lead to the use of products with higher nicotine strengths than are currently allowed, has been broadly welcomed by the industry – including by brands such as VPZ which recently launched a clinic service across its retail network to help even greater numbers of people “quit smoking for good.”
Illicit fears
However, the impact of these potentially very positive moves could be seriously undermined if the growing illicit market is not brought soon and sharply to heel.
The Scottish press is brimming with horror headlines surrounding illicit vapes containing dangerously high levels of nicotine, large quantities of which are being bought online and via social selling sites.
Unfortunately, the past few weeks have also witnessed an apparent spike in seizures of non-compliant illicit disposable products from retail stores.
In October, North Lanarkshire Council published news of a wave of seizures of illicit disposable nicotine vapor products that its officers had made from local shops, while a recent UKVIA investigation identified “a significant amount” of non-compliant products entering the UK and being sold “by convenience shops and on major online marketplaces”.
The problem, the UKVIA says, “lies with some distributors who are flouting UK regulations and managing to get these products imported into the country and sell them onto traders and retailers, as well as a lack of proper scrutiny on major online marketplaces”.
Commenting on situation, the UKVIA recently called for “tough action” against resellers of non-compliant disposable vape products.
UKVIA Director General John Dunne said: “We are calling upon regulators and the online marketplaces to robustly enforce current regulations and do much more in order to ‘clean up’ the disposable vapes market.
“The disposable vape sector has enjoyed a significant revival in the last couple of years, appealing as an entry point for adult smokers looking to quit conventional cigarettes. However, an investigation by the UKVIA has identified that illegal products are re-entering the UK market.
“Robust enforcement of the current regulations is the only answer and it’s needed now. We can provide support to the regulators and educate the industry on how to distinguish between what’s a compliant product or not; and we are in the process of doing this.
“However, we are not in a position to come down heavy on those breaking the law, that lies with the regulators.
“The vaping sector’s reputation, that the industry has taken years to build up, and which has made it one of the most successful business markets in the 21st century to date, is being threatened by a minority intent on making a quick buck out of a popular product and we will not stand back and just watch it happen.
“Disposables have a major role to play in the vape market, but like all products they need to adhere to the legislation.”
Legitimate manufacturers, including Geek Bar, have also stepped up their efforts to stifle the problem.
China-based Geek Bar is now working closely with UK vaping and retail trade associations, including the UKVIA, as well as regulators, in a bid to check and seize counterfeit Geek Bar products in the UK.
It is also helping authorities in China to crack down on counterfeit factories – a move which has already resulted in four closures this year.
Pouch perfect
The nicotine pouch market is also continuing to develop, especially in UK convenience where, according to JTI, almost 50% of nicotine pouch sales take place.
JTI recently added an Extra Strong Mint variant to its Nordic Spirit range in an answer to growing demand for more menthol flavours, while BAT added three new flavours to its newly launched VELO brand including: London Pride, Ruby Berry and a limited-edition Summer Vibes flavour with a taste of Pina Colada.
