It’s been almost 10 years since electronic cigarettes were first introduced to the world. However, the past two years have been the most significant, as the revolutionary device has generated the most attention and curiosity among smokers and non-smokers alike. While smokers view e-cigarettes as a means of kicking their tobacco habits, the rest of the world is divided on how safe these products are to use. In its early days, anyone looking to purchase e-cigs had to do it online, because physical stores didn’t carry them. The performance of these tobacco-free devices in the convenience store sector has been quite uneven since they were finally introduced, but it does look like sales are finally picking up some steam. Just a few months back we reported owners were reorganizing their tobacco shelf space to make room for e-cigs, and the move seems to be paying off.
In September 2012, UBS-CSP Daily News conducted a poll highlighting how e-cigarettes are viewed by retailers. Results clearly showed that over 75% of the operators believed in a tremendous growth potential for electronic cigarettes. One retailer responded, “Our society in general may not be so offended by nicotine as much as the smoke tobacco cigarettes create. Consumers like energy drinks and anything caffeinated, so why not nicotine? I do think the category will grow considerably.” More than 80% of the retailers who responded to the survey said that they did carry at least two to three brands. This is certainly good news for the vaping industry.
The survey also revealed that some e-cigarette brands are emerging as frontrunners in the convenience store segment. 32% of the operators were found to be carrying NJOY, closely followed by Cig2o, Logic and Krave (Vapor). Ten other brands were found to be capturing the rest of the market share. That said, retailers are still believed to be sampling what the industry has to offer. According to UBS tobacco analyst Nik Modi, the winning brands will be defined by capital, a lot of which is required to gain brand equity and withstand FDA scrutiny. It’s worth noting that none of the brands mentioned by the survey has a serious online presence, at least not compared to established companies like Blu or V2 Cigs.
As far as sales are concerned, the survey results were also surprisingly positive. Again, more than three-quarters of the retailers said that they had experienced growth in sales. Only 3% claimed a decline in sales and a few reported no change at all. One retailer presented a mixed view, “Our overall sales have decreased as we were the first to market, and other retailers are catching up. But our per-store/per-day average sales are still growing.” The refill varieties are reported to be selling better than the disposables. While disposable e-cigs have their advantages, the refillable version is much cheaper, making the preferred choice.
It’s true that e-cigarettes are doing much better in sales online, when compared with the convenience sector. There are more varieties available on the Internet, and buyers get to interact with other vapers, read e-cig reviews and make a more informed choice. Since consumers are still testing the ground with several e-cigarette brands, it is a matter of time before some brands emerge as clear winners, become household names, and take up market share in the convenience store sector. As one retailer rightly pointed out, “With cigarette smoking becoming socially and lawfully unacceptable in public facilities, e-cigs offer an alternative.” “Customers are getting more familiar with them and are more willing to try them,” said another.
It’s great to see electronic cigarettes gaining ground in convenience stores, as this makes them visible to a much wider audience. Hopefully, this will help a lot more people kick the smoking habit, but I can’t help but be concerned about the quality of e-cigs sold in these establishments. As I’ve mentioned before, a negative initial vaping experience could make a smoker go back to analogs,