Cigars have potential
THE rise of vaping has, if nothing else, proved that consumers are willing to experiment when it comes to their nicotine products.
And, according to Scandinavian Tobacco Group UK (STG UK), e-cigarettes aren’t the only category that adult smokers are open to purchasing from, with cigars also offering an opportunity to generate extra sales.
Jens Christiansen, head of marketing and public affairs at STG UK, said that the firm’s research showed 59% of male smokers who don’t normally smoke cigars would be willing to buy them — with cigars having double the profit margin of cigarettes.
C-store retailers are in a strong position to try and encourage consumers to switch to cigars (and benefit from the extra profits), with STG’s research showing that 79% of smokers who regularly visit a convenience store would try an alternative tobacco product like cigars if recommended by store staff.
Christiansen said: “To make the most of this opportunity, retailers should invest in upskilling both themselves and their staff to grow their understanding on the different cigars available in each segment, and what type of consumer they are most suited for.
“By taking time to talk to customers about their preferences and being able to offer advice on what cigars would fit their individual smoking tastes, retailers can push up their cigars sales and benefit from increased margins and higher profits.”
As well as highlighting that smokers are fairly open to trying cigars, the STG research also emphasised that consumers continue to look for value within their nicotine products.
Christiansen said: “Results show that price, in terms of out of pocket spend, was shown to have the greatest influence on consumer tobacco purchasing decisions, coming out top of the poll (61%), with perceived value for money a close second (47%).”
But rather than taking this as advice to stock up on the cheapest brand, Christiansen stressed that value for money meant “different things to different people,” and it was important to be able to advise consumers on which cigars best suited to their needs.
“Retailers should invest time into going through the gantry with the staff,” he said “and talking to them about the different segments and products within the category.”
He suggested opting for a basic cigar portfolio that covers the Miniatures, Panatellas, Premium and VFM segments, stocking up on Signature Original and Signature Blue (previously called Café Crème), Moments Blue for Miniatures and Hamlet 5’s and Moments Panatella.
Christiansen also pointed out that cigars are exempt from the packaging restrictions which apply to many other tobacco products, so will naturally stand out on the shelf when gantry doors are opened.
“To make the most of the opportunity this presents, don’t hide cigars away at the bottom or the top where they can’t be seen,” he said.