As full-service shops, tobacco outlet retailers don’t have to take on poor cigarette/tobacco margins alone. Many tobacco accessories already come equipped with impulse and display marketing tactics to counteract that—if only tobacco owners would more fully join forces with them. Want to supplement minuscule cigarette profit? Consider this ancillary advice from four accessory strategists:
Completing the Cigar Experience
Jim Drobnick, Retail Sales Specialist
Otter Products, LLC, Fort Collins, CO
Our two lines of product that are the most “impulsive” items include the Cigar Caddy line and the Zippo Cargo case. The Cigar Caddy line is targeted for the daily cigar smoker who would like to carry two, five, 10, or 15 sticks with them, while also keeping them fresh. The five, 10, and 15 stick cases all have the humidification device inside to allow the cigars to stay fresh. The Zippo Cargo Case is designed to store any smoker’s Zippo, and is DOT (Department of Transportation) approved, so they can take the unit on an airplane with them.
We target our product towards the avid cigar smoker who travels, but cannot carry their expensive home humidor with them. The Cigar Caddy is great for customers who partake in outdoor activities, such as fishing, golfing, skiing, water sports, or a weekend in Las Vegas.
In order to sell any product, it needs to be highly visible to the consumer and also needs to draw their attention. To help our retailers, we have Cigar Caddy Racks that are used to merchandise and market the product. If the customer does not carry enough products to fill up the rack, we will offer many marketing ideas to target their specific market of consumers. For example, if the retailer has a glass case, we might recommend putting a five-stick Cigar Caddy in it with the lid open and some cigars in it.
The Cigar Caddy travel humidors are very rugged cases that have a waterproof and crush- proof design, so any user can travel in any type of condition without worrying about ruining their cigars. Another great feature to this product is the rubber seal, creating an airtight box, which also allows the unit to float if submersed in water. The Cigar Caddy line is also very tasteful, with a dark flat black color and sleek design. The packaging of the product needs to be minimal, attractive, and sophisticated in order to contribute to the cigar smoker’s experience.
Cigar smoking is not just about cigars, it is also about lifestyle, emotion, and perception. For this reason, having add-on-accessories available for customers is important for completing the cigar experience.
One good merchandising tip is to sell a package; put five cigars in the five-stick Cigar Caddy, along with a cigar cutter, and sell it as a package. This makes an easy gift for any type of cigar smoker. If there are a lot of golfers in the area, put a Cigar Caddy on display with some cigars, a golf ball, and some tees. This will not only grab the golfer’s attention, but the attention of all customers walking through the door. Retailers with a high number of fishing enthusiasts who come through could do something similar to them. We also recommend increasing proactive customer marketing. This could be as simple as opening the smoker’s mind and suggesting other products to accommodate their needs.
Selling accessories alone is a huge mistake. Retailers could make customers happier and have more profit by selling customers the complete cigar experience. This involves more one-on-one customer interaction to find out who the customer is and what types of accessories will benefit their needs.
The outlook for the cigar industry is good, as it is a tight, interdependent family. Better communication between manufacturers and retailers will only benefit us both and grow the customer base for us all.
Holding a Candle to Margins
Paul Hoge, Product Developer
Tobacco Outlet Products, Charlotte, NC
Tobacco Outlet Products offers an odor exterminator solution in the form of candles and sprays. Sometimes they act as a “relationship-improvement” product for customers because one person in the household or office does not smoke. We keep our products impulsive by frequently changing our fragrances—sweet, florals, spicy, etc., as well as by adding to the line. Our most impulsive item is our brand-new “Candle for the Car”—it’s not actually a candle, however, it is made with the same special enzyme formulations and fragrances as our very popular Odor Exterminator candles and sprays.
Display is very important to our product mix. We offer a complete smoke odor exterminator solution and when merchandised on one of our countertop or floor displays, it pulls the whole concept together and offers the consumer an easy way to see all the formulations/fragrances available. For the retailer, it offers the upsell when the consumer can see all the products together. Sales per square foot are greatly enhanced when the displays are used.
There is a great benefit to stocking and promoting our products aggressively. The line offers a gross profit margin averaging between 40 percent and 50 percent, depending on the freight charges and the retail price point.
We design our entire product line to fit into people’s homes and lifestyles through the use of color, the variety of fragrances, and the overall look. That’s why the full-product presentation will have the best results in sales. The biggest mistake a retailer can make is to focus on items they like and not what the consumer wants. Retailers should also talk to the customer about trying the product and burn a candy or use the spray in the store at all times. For retailers that are sitting on the fence, I would suggest starting with our small counter-top display assortment. They also should draw the connection on how the consumer can use this product every single day in many ways.
A Manly Statement
Leslie B. Mann, Executive Vice President
The Colibri Group, Providence, RI
Impulsive items in the form of accessories give retailers the ability to make additional sales to their customers. Tobacco retailers should always be thinking about how they can add additional sales to each customer that walks into their store. This is done in the clothing industry, for instance, when you purchase a business suit, the retailer also shows you a shirt, tie, cuff links, socks, etc.
Colibri is definitely a male brand—one that gives the man a sense of style, fashion, and expression. Colibri offers a wide variety of displays, including those for lighters and for cigar cutters. Our latest tower offers not only lighters and cigar accessories but also includes men's fashion accessories to compliment their wardrobe and lifestyle. We have made very impressive inroads on accessorizing the tobacconist to think outside of just our lighter product offerings and are happy to report very successful sell-through of this initiative, with margins (GMU) in the 55 percent range.
We are very proud of our design and product development team that is always raising the bar on innovation and traveling outside of the United States—mostly to Europe and Asia—to capture the latest design trends and fashion, and incorporate them into our product offering.
The biggest mistake tobacco retailers can make is to not recognize the profit potential and additional sales volume that these categories can create. Other tips I would offer—make sure that the merchandise is always polished; make sure the display is in a high traffic location in the store, and make sure you utilize all merchandising tools provided by us.
Pocketing Profit
Shelly Fong, Vice President of Marketing
Calico Brands, Inc., Ontario, CA
Our pocket lighters are targeted toward men between the ages of 25-59. However, we create designs that appeal to both men and women across all demographics. We research lifestyle trends, fashion trends and general current events when designing products. We see a consistent trend in sports-related interests, outdoor recreational activities and other lifestyle interests such as cars and poker.
A variety of different brands, themes and designs are needed to appeal to a wide consumer group. Our designs are directly influenced by lifestyle trends and interests. Colors are important as they relate to the design but generally do not follow any trends. More and more retailers are requesting environmentally friendly packaging such as bio-degradable or recycled paper and plastic materials.
Merchandising displays are very important in our category. We offer counter displays that are perfect for the register area. Counter units are especially effective if they have attractive graphics that draw the consumers’ attention.
Impulse items and accessories are important as they provide incremental sales and good profit margins for the retailer. Convenience is an added benefit for the consumer as they can purchase everything in one store. •
