96 TOBACCO BUSINESS | JULY / AUGUST | 22 his clientele and business and is therefore specific on the cigars that are offered in his stores. “We ask our customers certain questions during the sales process, and we track certain travel data, which we use to develop our training, and it also helps us create a great product selection,” says Torres. “We know that many of our customers are not regular cigar smokers. A lot of them will enjoy a cigar because they’re in Vegas ‘and it’s a Vegas thing to do.’ Many of them are not aware of even the major brands, which gives us a unique opportunity to create brand awareness for our brand partners. With the volume of customers we see every week, we create a unique brand exposure opportunity. We rarely see our customers more than once or twice in their lifetime, so our business is not made up of returning customers. We are unlike most other cigar businesses that are neighborhood-based and build up their regular clientele to create that repeat business. That’s just not something we can do.” Where Luxe’s business finds commonality with the typical tobacconist is in enticing customers to stop and come into the store. The Las Vegas airport serves over 50 million passengers a year. Even with that amount of traffic, Torres has found that if those customers aren’t specifically looking to buy a cigar or something Luxe has to offer, they will typically keep walking. This behavior is the same experience within a large retail setting, like a mall. “We don’t do much advertising because the nature of the airport retail business is convenience and impulse buy,” Torres explains. “We focus a lot of what we do on-site within probably 1,000 to 2,000 feet of our store because that’s where the greatest opportunity is for us.” Premium cigars are the main product sold at Luxe, but they aren’t the only type of tobacco product the store carries. As Torres mentioned, surveying customers and staying on top of what they’re looking for and asking about has been key to Luxe’s business growth. Luxe carries all the standard tobacco products, including smokeless tobacco and small machinemade flavored cigars. Vapor products are another significant part of Luxe’s business. Airport retailers are limited in what they can carry, which gives Luxe an advantage because it’s the primary retailer within the airport that offers tobacco and vapor products. While there’s little crossover between cigar smokers and customers that vape, the two product categories coexist within Luxe without taking away sales from one another. “We started carrying [vapor products] during the Juul explosion years ago because our international passengers were requesting it every day and we couldn’t keep it in stock. Even with the crackdown on the vape industry a couple of years ago, the category is still growing and is definitely a big part of our business at both stores,” says Torres. “When sales start climbing in a new product category and it doesn’t eat away at an existing category, that is totally organic growth. That is adding to your bottom line. It’s important to analyze sales data that way and understand its impact on your operation. Business is constantly evolving, and we need to adjust to it. The increase in vape sales was a welcome surprise to us.” Torres continues, “Again, being at the airport is a very unique opportunity because with travelers, it’s usually all about convenience. Very, very few people come to us as a destination, although we’ve had some people more recently find comments about us on forums, and they’re like, ‘Hey, we have to check out this shop at the airport because they have some really unique items.’ That happens more often now than in the past. For the most part, it’s all about convenience. People are walking by, they see that we’re there, or they look us up on Google—which plays an important role in how people find us at the airport—and they’re happy to see that we carry top-quality products and something they need right there at that moment. They pick it up, they’re done and gone.” TheServiceBusiness Maintaining good margins is far more challenging than one may think, but Torres explains that it’s a little easier to accomplish with the help of a good point-of-sale (POS) system. “We have a solid POS system that helps us manage our inventory,” he says. “I can pull 40 different reports and look at what’s selling, what’s not selling, price point and obviously margin,” he says. “Wemonitor that regularly tomake sure that we’ve got the right product mix and proper inventory levels, and that we’re making what we need to make on everything we sell, and that we’re buying in the smartest way possible.” Torres’ goal is a simple one: He wants anything the store brings in to move quickly. Turnover is key, so qualifying every product that lines his stores’ shelves is important. Torres sums up this part of his business by stating, “If you don’t measure it, you can’t manage it.” Some of the things Torres measures include sales by SKU and by shelves, and if a certain shelf isn’t performing at the same level as others, he has his staff change things up. Merchandising is also driven by POS data. Torresmonitors how long it takes for certain products to sell, and those that take longer to move he decides not to carry. With some of his other airportbased businesses, he’s even gone so far as to have staff remerchandise key areas of a store at different times of day based on the customers that would be traveling through the airport at those times in order to optimize sales. The biggest lesson he’s learned? “Measure what you sell and understand just how critical merchandising is to your retail business’s success,” he says. “All successful tobacconists use technology to manage their business. They apply best practices, and they run a real business. That’s critical. And you have to listen to your customers.” Business is never without challenges. Perhaps more than other industries, the travel sector was greatly impacted by the COVID-19 pandemic and subsequent shutdown. With no one flying during that time, most retail operations in airports closed down, including Interluxe. Both stores closed in mid March 2020 as the world locked down and people stayed home. Where other cigar and tobacco businesses could offer delivery or curbside service, Interluxe could not. Luxe finally reopened in June 2021 with limited hours, and Interluxe partially reopened in January 2022 as international travel resumed. Like many other operators, hiring qualified personnel is a big challenge. Maintaining a good team is more critical now than ever—and just like how Torres worked in the family business growing up, his daughter Brenda and wife Laura now also play a bigger role in the operation. A store’s employees are the key to its success. For his staff, Torres has developed a three-week on-the-job training program designed to educate employees on the fine art of sales and customer service. While most new employees may come in not knowing anything about cigars, they quickly develop an appreciation for the product and the key points about the product to create a memorable experience for their customers. If you measure what you sell and your store’s performance, strive to help and be of service to your customers, and remain flexible and open-minded, it’ll only be a matter of time before you’ll see your own retail business soar to new heights. TB Luxe Cigar Boutique carries brands that many cigar enthusiasts would be familiar with or would recognize from advertisements, such as Montecristo, Cohiba and Arturo Fuente, among others.
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