36
TOBACCO OUTLET BUSINESS
SEPTEMBER/OCTOBER 2012
Premium Advice
from Outlet Operators
Well, it went through, and rather than
have my foot in my mouth and deal
with the taxes, I left and closed up
million-dollar locations. It was risky, but
it worked out really well.”
That’s because Garofalo adapted to
a situation and grew forward. Now he’s
successfully operating three (primarily
cigar) stores inNewHampshire off of the
threemajor highways that leave Boston.
“
Knock on wood, the business has had
27
straight years of growth,” he states.
He admits that “since 2007, we’ve been
squeaking by with growth—before that
it was double-digits,” but he’ll take the
single-digits as he can get them now.
Garofalo was fortunate in that he
learned a hard lesson early on in his
retail career—one that prepared him for
continually adapting to change.
For right now, the days of selling an
abundance of high-end cigars are over,
and while Garofalo hopes it swings
back eventually, he’s going with the
lower-priced flow. “Customers are
looking for value now, that’s the game
it is,” he states. “Someday, I hope
the real expensive cigars will make a
comeback, but for now, I make sure I
have something for everybody—my
cigars go as low as $1 now.”
Two Guys Smoke Shop has a social
media presence and it does in-store
events every week in its stores. It also
does promotions at golf tournaments
and other regional events. “It’s a
tougher battle now. The tobacco
industry has a lot of negativity against
it, but we have to keep the excitement
alive for cigars,” Garofalo says. “We
have to give people reasons to keep
coming in our stores.”
He recognizes that another problem
forbrick-and-mortarcigarbusinessesis
the discount mail order phenomenon.
“
We know that customers can buy that
popular cigar on their cell phone right
in their hand right now cheaper, so
why are they doing business with us?”
Garofalo asks rhetorically. His point is
that in addition to running continuous
events, cigar retailers that want to
grow must offer boutique and smaller
cigar brands that aren’t available
online. What’s more, those brands
have to be highlighted.
“
Like supermarkets, we use endcaps
and the right spaces for the stuff we
know our customers can’t get anywhere
else,” he explains. “It’s a big part of what
we do. Most store owners know the
best spots in their stores and reserve
those for the highest-margin, most
special cigars, rather than to promote
the well-known names customers can
buy anywhere else—those they should
have to look for, those are hidden away
in the corners; otherwise, they’ll think
we’re gauging them with price.”
TOB
Tobacco outlet retailers who offer sound advice on
cigar growth often relay it in simple terms. Here are
some basic tips from operators who recently reported
increases in stogie sales:
•
Constantly evaluate and bring in new products.
You have to stay ahead of the curve to get a jump on
what will be the next greatest sticks.
•
Pay particular attention to mid-range cigars and
lower-priced cigars from the major brands
.
There is
explosion there.
•
Be on top of boutique brands.
These are not just
for the exclusive cigar store anymore.
•
Get events, events, and more events going.
This
is the “wow” factor through which customers will
get attached to your store’s atmosphere and where
you will build a sense of community. Be creative in
your market: locations in Detroit can do car events,
locations in Northern California can do wine events.
Incorporate cigar-rolling events, sampling events, and
live radio-show events.
•
Be optimistic and involved.
To protect the future
of the business stay involved, fight for cigar rights
and most importantly, believe in your heart that the
industry will prevail.
•
Be willing to take continued risks.
This business
is not for the faint of heart.
