46
TOBACCO BUSINESS INTERNATIONAL
MAY/JUNE 2014
electric
ALLEY
The 65/35 Split
The survey also found that the e-vapor
retail sales mix is evolving to be 65 percent
weighted toward traditional e-cigs versus
35 percent toward vapors/tanks; however,
vapors and tanks are overwhelmingly
taking e-cig share, according to 90
percent of respondents who revealed that
the transition to vapors is the “natural
progression” after e-cigs.
One retail respondent commented, “We
have seen our rechargeable cig-alike sales
get cannibalized, especially over the last 12
months. We ask every inactive customer
why they have discontinued the purchase of
cartridges, and 70 percent of those we asked
responded that they had switched to vapor/
tank systems.”
Another surveyed retailer mentioned
that vapors/tanks are less expensive, much
more customizable, and most are not in a
form that resembles a traditional tobacco
product, “causing less confusion and
consternation about where and when they
can be used.”
consumers More Committed
Vapor/tank consumers were found
to be much more committed than
their e-cig consumer counterparts,
according to 84 percent of the Tobacco
Talk respondents. Many opined that
despite the higher initial investment
and somewhat steep learning curve,
consumers tend to stick to vaping
because of the various advantages over
e-cigarettes, namely the sophistication
of product offerings, the enhanced flavor
profiles, the more diverse uses of the
products, the “coolness” quotient, and
the lower cost of vaping.
Plainly put, “Passionate vapers don’t
use cig-alikes—[it’s as] simple as that,”
stated one respondent.
Stated another, “Most consumers start
with e-cigs and move to tanks. It’s more
work, but the commitment is greater.”
Another participant commented
that as consumers follow the “logical
path from disposables to vaping, they
become more personally satisfied with
the change and the results.”
So what does this mean for retailers,
both from the tobacco sector and the
c-store channel, who truly want to move
forward in the e-vapor arena? For one
thing, those who only sell traditional
e-cigs are already becoming dinosaurs,
according to the latest research.
“Retailers really have to rethink this
category,” offers Herzog, who praises
c-stores like The Pantry, which is already
selling tanks.“They have to be more flexible
than the old days; they have to adapt.”
She advises forward-thinking retailers
to invest more time into educating their
employees so they know “how to talk to
the vaping consumer.They need to think
about it like a wine shop; that is what
this is evolving into.”
To give an example,Herzog references
vape shops, which are growing rapidly
and seem to have a handle on how to
approach ‘hobbyist’ consumers. “This is
the challenge and the opportunity,” she
says.
TBI
e-Vapor Retail Sales Mix Evolving
65% Weighted Towards E-cigarettes vs. VapoRS/Tanks
70%
60%
50%
40%
30%
20%
10%
0%
E-Cigs and Accessories
Vaporizers and Accessories
Other
65%
33%
2%
Source: Wells Fargo Securities, LLC
