Today, there are many different types of tobacconists. While some have traditional brick-and-mortar stores, others have robust websites and e-commerce operations. Then there are those that have a mixed business model, with both a physical and digital presence. Even if you haven’t heard of Luxury Cigar Club, it’s likely some of your customers have, and if this year’s Tobacco Business Awards are any indication, their business could very well be a sign of things to come for tobacco retail.
Chris Doyle and Ben Rotem’s Red Beard Cigar Co. opened in 2018 with the purpose of providing premium cigars to the small town of Cottonwood, Arizona. In a short time, Doyle and Rotem’s business evolved beyond the walls of their physical store. Even though their brick-and-mortar had the only “smoke in” lounge in a 50-mile radius, the two tobacconists saw more business potential and became local wholesalers as well. Because of the small cigar community in their area, Doyle and Rotem decided to go outside of their geographic area and build a larger cigar community by taking their business online. That’s when the idea came about to start a cigar subscription service which, as the two found out, wasn’t a unique idea. In fact, there were already several other active cigar subscription services in the market when they sent out their first membership box in February 2019. Despite knowing they were coming in late to the game, the two decided to double down and launch Luxury Cigar Club.
“As a cigar of the month club, what makes us unique are a few things. First is our social network, bringing thousands of people from all over the world together, creating new relationships and unbreakable bonds. We also pride ourselves with the level of customer service and support we offer. Our team goes above and beyond for every member, whether it is dealing with a mail issue or a request to source hard-to-get cigars. Last but not least is the caliber of cigars we work diligently to provide to our members, from nearly unattainable cigars and exclusively made cigars to new releases, limited editions and, of course, aged cigars,” explains Rotem.
To ensure Luxury Cigar Club brought something different to the monthly cigar subscription category, Doyle and Rotem tried to identify gaps in the market and tried to figure out what they could offer that would be new and better than what was already being offered. 2020 was a challenging year for Luxury Cigar Club because of COVID-19, and the pandemic challenged the business in ways Rotem and Doyle couldn’t imagine. From supply issues to shipping issues, there were obstacles that had to be overcome at every turn, and survival meant these two tobacconists had to think outside of the box if they wanted to provide the same quality product and experience that the club’s members had come to expect.
“We do not compromise. The overall impact [of COVID-19] on the business was very positive. The demand for cigars, and for premium services in general, seemed to increase dramatically, and by being flexible, creative and diligent, we managed to grow our business,” Rotem shares.
Having a successful monthly cigar subscription service comes with its own challenges, but some of the lessons learned along the way can benefit all tobacconists, including those looking to make the move to e-commerce and those hoping to build a customer base outside of their store’s walls.
Best of the Best
Much like all tobacconists, the biggest challenge Luxury Cigar Club faces is getting all of the inventory it needs to sustain its business. A large amount of cigars is needed for the monthly boxes that are mailed out—and not just any type of cigar but those that are limited production, aged or exclusive cigars. These cigars are often made in small quantities, and it’s not been easy for Luxury Cigar Club to acquire enough for all of its members. This is related to another issue: growth.
Luxury Cigar Club has grown exponentially in a short amount of time, with more cigar smokers attracted to the idea of having cigars delivered to their doorsteps each month, especially during the pandemic. The growth of the club has forced Doyle and Rotem to both adapt very quickly in terms of manpower and in regard to financial resources. For their retail store, they have a very similar approach to product selection. They go after only what they consider to be the best of the best products and put every brand and facing they sell through the same extreme scrutiny they put their subscription box cigars through. The cigars that they sell are only those that they themselves enjoy.
“Our philosophy has been very simple: We offer only what we personally love. Our customers know that we work very hard to not cut corners in our search for great cigars. While not all the cigars we send might be for every palate, they are all of the best quality and give our customers an opportunity to try something they might otherwise not have.”