Lighting the Way to Profitability

http://www.csdecisions.com/2011/06/15/lighting-the-way-to-profitability-2/
Lighting the Way to Profitability
Erin Rigik | Jun 15, 2011 | 0 Comments
A wide array of tobacco accessories to complement
cigarettes and cigars shows customers you’re serious
about tobacco and incites impulse sales.
By Erin Rigik, Associate Editor.
Many retailers recognize that it’s beneficial to step out from behind the counter to
teach customers about smokeless alternatives and educate them on e-cigarettes,
but taking the same approach with accessories—showing customers how to work
new products as well as upselling lighters with cigarettes, cartridges with ecigarettes and butane with refillable lighters—can not only increase revenue, but
also secure repeated visits.
Light Up Lighters are perhaps the most widely sold tobacco accessory at cstores, as they’re not only useful to smokers but also to nonsmokers for use with
candles or lighting charcoal grills during the summer season. For the 52 weeks
ended Dec. 26, 2011, lighters brought in $484,491,400, up 9.75% compared to
the previous year, according to SymphonyIRI data. Unit sales totaled 359, 101,
500, up 7.35%. The average price per unit was $1.35, up $0.03 from the previous
year. The top selling lighters for the period included Bic, Bic Limited Edition, Bic
Pro Series, The American Match and Ed Hardy Lighters, SymphonyIRI reported.
Discount Smoke Shops is no stranger to driving lighter sales. It offers a complete
array of lighters from inexpensive disposable varieties, such as those by Bic and
Djeep, to upper and mid-grade lighters like Firebird, which is part of Colibri, and
Zippo.
“We rotate the styles and graphics throughout the year, so we don’t stay
stagnant,” said Ray Calderon, director of marketing and merchandising for
Discount Smoke Shops, which operates 50 stores in Illinois, Missouri and South
Dakota. “We try to rotate all those items especially in the Zippo and Firebird line.”
Disposable lighters, such as those by Bic, are by far the biggest mover in total
volume among lighters at Discount Smoke Shops, but the company also does a
strong business with its Zippo line. “They’re a little more expensive, but we’ll turn
over our complete Zippo line in a range of about 30-50 lighters per store in 30-45
days, so we sell a lot of Zippos,” Calderon said. He credits his chain’s strong
lighter sales to the suggestive selling clerks do when making any tobacco sale.
“When selling any smoking product we let customers know we offer lighters.”
Mark Tucci, president of 7 Valleys Custom Blends, a six-store chain with units in
Pennsylvania and Virginia, agreed that communicating with shoppers about
tobacco accessories is key to creating repeat business. Specialty decorative
lighters have been getting increased attention from customers at his stores,
especially Ed Hardy lighters. Tucci takes advantage of every sale of a refillable
lighter, using it as a chance to teach customers how to refill the lighters with
butane.
“You can hand a lighter to someone over the counter and tell them how cool it is
and that it’s refillable. But if you actually come out from behind the counter, pick
up a bottle of butane and show where the flint goes and how to fill up the lighter,
what you’ll end up with a lot of times is a sale of the lighter, a can of butane and a
pack of flints,” Tucci said. “And if the customer ever runs out of butane, they’re
going to come back to you for butane. If they ever have a problem with that
lighter, just give them another lighter and then sell them another can of butane.”
Tucci noted that retailers should train clerks to view sales as an opportunity to
sell a whole line of supporting items and create a bond with the customer, so they
return for a refill or other products. “The key to merchandising right now is having
a wide variety of complementary, low-cost products that show customers that
you’re looking to help them save money,” he said.
RYO Accessories Aside from lighters, Tucci said all sizes and styles of Pure
Hemp rolling papers have been flying off the shelves. “We’re seeing people
heading toward the natural papers. People ask for Pure Hemp by name,” he said.
Meanwhile, at Discount Smoke Shops, rolling papers are holding their own. “We
still do a good job with mainstays in the rolling papers, Top and JOB and Zigzag,”
Calderon said.
Tucci has seen more customers gravitating toward rolling machines. “Smokers
now realize they can make their own cigarette at home, and they’re starting to
look at the machines as an investment,” he said.
This is proving to be a boon for retailers because customers aren’t opting for
cheap hand-powered models. “We’re seeing strong sales of the Powermatic II
electric rolling machine, which is a top of the line model for home use. We retail
them for $99, and it is amazing how well those machines are doing right now,”
Tucci said. “We’re also seeing great movement from the Supermatic and the
Supermatic II machines, which also have a strong ring.”
Tucci cautioned retailers to stay away from in-store cigarette manufacturing
machines. “I wouldn’t touch those machines with a 10-foot pole. They are
absolutely illegal, and you don’t build a solid business in the U.S. by slipping
through a loophole,” he warned.
E-Cig Education As e-cigarettes increase in popularity among customers they
also create an opportunity to introduce customers to various cartridges and show
them how to work the product. With e-cigarettes come a whole new range of
accessories to offer, from chargers to cases.
Discount Smoke Shops began offering two different lines of electronic cigarettes
about a year and a half ago, and also sells a myriad of accessories to
complement the e-cigs, such as car chargers, home chargers and a complete
array of cartridges in non-nicotine varieties all the way up to full-flavored options.
Calderon noted that customer response to e-cigarettes is getting better every day
as more regulations affecting where people can smoke regular cigarettes pop up.
Sales of e-cig products, however, have not detracted from regular cigarette or
RYO sales. “It’s more of an addition for when people are in a bar or their office,
but during their normal day-to-day routine they’re still smoking their regular
cigarettes,” Calderon said. “So e-cigarettes are doing extremely well—both the
full line and the disposable—and customers keep coming back for the
cartridges.”
Popular products Discount Smoke Shops has also seen its hooka products
and accessories soar in popularity, driven by the 19-23-year-old customer.
“Young adults seem to be getting into these products more,” Calderon said. “I
think there’s a lot of advertising out there keying into hooka lines and flavors.”
One of the best selling tobacco accessories at Discount Smoke Shops is
surprisingly as popular with non-smokers as it is with smokers: Smokers Outlet
Candles. Sales of the candles continue to grow, with many customers returning
specifically to buy them. The chain has been selling the candles for about five
years. They come in an array of scents that change with the season.
“We carry 20 different varieties throughout the year, as well as sprays (to mask
the smell of smoke). But we get a lot of consumers who say those candles last
twice as long as something they buy at the special merchandise stores like
Target or Wal-Mart,” Calderon said.
So as regulations eat away at tobacco sales, smoke shops are building customer
loyalty with non-smoking customers. This is just another sign that tobacco
accessories is a category with endless possibilities.