Tobacco Business

[ 18 ] TOBACCO BUSINESS [ MARCH / APRIL | 21 ] STARTUP / SALES A Pandemic Sales Plan Tips for how to deal with tough times and a pandemic that won’t go away. 2 2020 was a year like no other—and no one knows what the rest of 2021 will bring. But what we do know is this: There is plenty that we in the cigar industry can and should be doing to adapt to changing times. Lessons Learned While industry-wide cigar sales have increased in the past year, the COVID-19 pandemic has brought a number of challenges to the way we live and operate. With an unclear picture as to when the pandemic will end, we all need to focus on what we’ve learned from this difficult year and what we can do to improve business in the future. Adaptability and diversification are key. Creating online sites, offering curbside pickup services and delivering cigars directly to customers’ homes are three examples of how those within our industry have adjusted how they operate in order to serve the needs of our customers. By creating an online shopping site, retailers have an opportunity to increase their customer base. We’ve spoken to many online retailers in the industry these past several months, and most have said their online traffic and sales have increased dramatically. Many retailers who had to temporarily close during the pandemic wisely used that time as an opportunity to reconfigure their store’s layout and adjust their seating to adhere to social distancing guidelines. A number of retailers ramped up activities by offering virtual events when they were unable to have the in-store kind, which allowed adult consumers to still interact with manufacturers. Many found these virtual events helpful in increasing their customer base beyond the confines of brick-and-mortar retailers. In addition to selling product, many of these interactive virtual events focused on education and engagement. In fact, the payoff for many retailers taking actions to ensure patron safety—such as offering virtual events and increasing their online presence—was an increase in sales performance. Now, as we are a year into the pandemic, the industry is continuing to see periodic inventory shortages on some best-selling brands. Why is that? Because manufacturers were forced to close their factories for a short amount of time, and some continue to operate with smaller workforces due to social distancing guidelines. So what are some of the things we can do? • Be more strategic in your purchasing when manufacturers are not able to fulfill supply to meet demand. • Instead of buying inventory for just a month at a time, consider buying larger quantities when the product is available. • Buy more items when they are available for a deal. Not only will you save money and increase profit margins, but you’ll also improve your long-term ROI. • Remember that margin improvements are crucial if you’re seeing a decrease in sales, pandemic or not. • When you’re consistently having trouble getting a specific item due to inventory shortages, consider temporarily replacing that item on your shelf with something similar. • Consider using alternative sources, such as wholesalers for premium cigars, during shortages. If the manufacturer is out of stock of the products you need, seek out a viable alternative source, such as large wholesalers like Santa Clara who have large, proven inventory levels. As 2021 unfolds and 2020 is in the rear-view mirror, here’s something less tangible to consider—one’s attitude. Yes, we can be more agile and creative in our business practices, but we also must be ever-more resilient in our resolve to get through tough times. Adult cigar consumers can buy cigars anywhere, but they only become repeat customers when you provide great customer service. That’s why your biggest threat as a retailer isn’t the online catalog company or the store down the street—it’s yourself. Be resilient, be positive, and be proactive. When you are, you are more apt to succeed in providing a great customer experience even during challenging times. Do so during this pandemic or the next crisis, and you will be well prepared for a successful future. TB Contributed by David Joyce, director of wholesale operations, and Alan Rubin, busi- ness development, Santa Clara Inc.