Increased margins and loyal consumers make vaping a crucial category to invest in. Uldduz Sohrabi Larki explains how you can get started.
What’s the opportunity?
The vaping market is worth more than £1bn and is expected to keep growing. While some retailers are reaping the rewards, there is still a lot more potential for you to capitalise on the market.
“There’s huge headroom for growth, so Imperial is keen to educate and support any independent retailers interested in getting involved,” says Sophie Hogg, head of next generation products at Imperial Tobacco.
Stephane Berset, JTI head of marketing, says: “With nearly two million vapers in the UK, there is a significant profit opportunity for retailers who should strongly consider stocking vaping products to meet the demand.”
Bal Ghuman of Premier AK Convenience in Shrewsbury, Shropshire says he has found the vaping and e-cigarettes category to be very profitable as it has a far bigger margin than traditional cigarettes. For example, some products from Imperial offer margins of more than 40% when sold at RRP.
Make your range unmissable
In order to maximise growth in the vaping market, it is crucial to make your range visible. Imperial Tobacco’s Sophie Hogg says: “Countertop units are a great way to drive visibility in store or, if space is limited, an impactful back wall display will do wonders in helping you to showcase your range.”
It is important to stock up on many different flavours. E-liquids are the biggest driver of sales in the vaping category and are very important for retailers to get right, says Hogg. JTI’s Stephane Berset says: “The three most popular vaping flavours are fruit, menthol and tobacco.”
As well as having variety, making sure that products are always available is the best way to ensure that you do not lose customers. Hogg says a good way to do this is to stock at least one open system and one closed system.
Having e-liquids and capsules in different varieties and nicotine strengths can help you become a trusted vape destination.
Suppliers advise retailers to offer clearomisers, a part of the vape which should be replaced after every two bottles of e-liquid or with every change of flavour. This is a simple and effective way to upsell and drive additional sales.
Become an expert
While some retailers like David Worsfold of Farrants in Surrey have been selling e-cigarettes for a longer period of time, they have seen a big change in the market in recent years.
“I have been selling e-cigarettes since 1998, but the technology was clumsy at that time,” Worsfold says.
Suppliers and retailers agree that the quality of e-cigarettes and vaping products have improved significantly. One of the products which has been referred to as the ‘next generation’ e-cigarette is Philip Morris’s Iqos.
The product does not combust the tobacco in the product. Instead, it heats the tobacco just enough to release the flavour, while being less harmful. This is an advantage to the market as the lack of tobacco combustion allows the product to remain untaxed as a regular tobacco product.
According to retailers who have joined the vaping market, it is very important to know the products well. Natalie Lightfoot of Londis Solo Convenience in Glasgow, says that the market is becoming more standardised and consistent.
She explains that it was more challenging to introduce the concept to customers a few years ago, but the dialogue has changed drastically in her shop.
“Customers now know what they want. There are now fewer questions about the concept of the product, and more questions on which products are in stock,” says Lightfoot.
While the dialogue has moved from ‘what’ to ‘which’, Worsfold stresses the importance of providing expertise to customers and also supporting the transition of traditional smokers to become vapers.
Find out more tips on how to increase your vaping sales.