Tobacconist to the World: Retail Tips from Nat Sherman’s Michael Herklots

Retailers, it’s time to step up your game. Nat Sherman’s Michael Herklots tells you how tobacconists can rethink their businesses to create an unforgettable retail experience.


If hiring the right employees is an area you struggle with, approach the hiring process knowing you can teach an employee about a product, but you can’t teach things like passion, enthusiasm and work ethic. Look for employees with the right skills who also exhibit entrepreneurship because these individuals will deliver the right results for your business. Also, seek out diversity in your employees, a trait that’s essential to a healthy, connected business. Your customer base will be filled with different personalities, generations, languages, styles and backgrounds, so having a staff that reflects that diversity will help ensure that anyone who walks in the door feels welcome and comfortable.

Nat Sherman Townhouse, New York CityBusiness by the Numbers
Experience plays an important role in a store and, if done right, it can transform a business. Even though the premium tobacco industry has a long history in retail, it still takes a lot of work to generate enough interest in these products among new customers.

Thinking outside the box can bring a competitive edge to your retail game, and being authentic to who you are and bringing your personal interests into your business can set your retail operation apart from others. Herklots has done this many times, fusing the worlds of wine and fashion into different promotions he has created to bring new customers into the premium cigar category. Whether you’re into sports or craft beer, align your marketing efforts with what you’re interested in and you may see a big return as a result.

As you collaborate with other businesses and brands that align with your interests and hobbies, remember to focus on the experience, especially when hosting an event. Standard promotions are still popular, but unique promotions, prizes, educational seminars, curated tastings and fundraisers for local charities can all be big drivers for your retail and wholesale businesses. You also need to speak with manufacturers about their businesses and specific needs to figure out how a better partnership can be formed.

A retailer will have difficulties creating a positive experience without managing inventory and figuring out what customers are buying in stores. Herklots places a great emphasis on point-of-sale (POS) systems and how they transform a business. Nat Sherman depends on a POS system for every facet of its business, using the numbers and information it provides for a more informed view of its business and products.

“In general, numbers don’t lie. The more sophisticated the system, the more detailed the information. Today, retailers with point-of-sale systems are undoubtedly more informed about their business and operate accordingly,” Herklots explains.

As a board member of the Tobacconists’ Association of America (TAA), Herklots has seen firsthand the value POS systems bring to retailers who are interested in being world-class retailers. New members of the TAA aren’t even considered unless they have a POS system, says Herklots, who notes that a POS system is an absolute must for any retailer doing business in 2018. Use these sophisticated systems to keep track of what your customers are buying, when they bought it, and what products are selling at what rate and to whom. Use it to spot trends in your business with regard to flavors, prices and sizes. This type of data will allow you to make more informed purchasing decisions and will help you tailor your business to your specific customer base.

Nat Sherman Townhouse, New York City

Plan for the Future
Every business and every market is different, and every retailer must work hard to figure out what works best for them. Despite its long history in cigar retail, Nat Sherman still works hard every day to improve its approach to giving customers a top-notch experience and grow its business year after year. The company accomplishes this by attracting adult cigar enthusiasts to its business, getting them to purchase its branded premium tobacco products and working hard to keep those customers coming back for more. Any retailer who strives for these things will not only continue to be in business for years to come but also be on the path to becoming a tobacconist to the world—just as Nat Sherman has been since its launch in 1930.

This story first appeared in the July/August 2018 issue of Tobacco Businessmagazine. Members of the tobacco industry are eligible for a complimentary subscription to our magazine. Click here for details.

– Story by Antoine Reid, an editor and digital content director for Tobacco Business Magazine. You can follow him on Instagram @editor.reid.