It’s every business person’s goal: bringing in more money at better margins. Drawing on a study co-sponsored by Tobacco Business and Convenience Store News, Balvor LLC’s David Bishop sought to offer tips on doing just that at TPE 2017. “Winning at retail is about doing a lot of things well, across marketing merchandising, operations and the supply chain,” he acknowledged. “But while there’s no single thing that will be a panacea, there are actions we can take as retailers and manufacturers.”
1. Educate and Empower Your People. Skilled, well-informed employees are a boon to any business, but they’re even more crucial in tobacco retail, where a business can be devastated by a single age-verification transgression. While most retailers cover the basic age verification training, only 37 percent report assessing employees on their competency selling age-restricted products. “That should raise a red flag, because operating that way exposes your business to unnecessary risk and liability,” says Bishop.
2. Evolve with the Times. “Retailers who adapt to and evolve around their surroundings are the most likely to survive,” noted Bishop, who pointed out that manufacturers are moving toward alternatives to combustible cigarettes—and retailers need to do the same. “New products are a retailer’s lifeblood, but the way we look at new products has to change because deeming regulations are drawing a line in the sand.” If manufacturers are unable to bring new tobacco products to market, retailers will need to find existing products new to their stores to introduce. “Forty percent of our survey respondents reported expanding into handmade cigars,” said Bishop. “If you don’t carry premium cigars in your stores, that may be one to consider.”
3. Explore Alternatives. The marijuana tide has turned—today, 59 percent of Americans are in favor of legalizing marijuana as compared to 33 percent in 2001. “That’s an amazing evolution of public opinion,” said Bishop, who suggested that the number will continue to increase as younger Americans reach voting age. “Thirteen percent of U.S. citizens currently use marijuana; 15 percent currently use cigarettes,” he added. “I’m not necessarily suggesting selling the actual product, which is difficult for traditional retailers. Instead, explore selling accessories that support it.”
4. Engage in Shaping Future Threats and Opportunities. “Advocacy gives you more control over the outcomes in areas of uncertainty,” noted Bishop, who urged retailers and manufacturers to monitor legislation and regulation and talk to legislators about their perspectives. “Whether it’s about increasing the purchase age to 21 or weighing a flavor ban, make your voice heard.”
This story first appeared in the March/April 2017 issue of Tobacco Business magazine. Members of the tobacco industry are eligible for a complimentary subscription to our magazine. Click here for details.