Lighters were once a ways toa mean—to light up a cigarette,ignite a candle or fire up a birthday cake—but they’ve evolved into a form of self-expression. David Dill,vice president of sales and marketing forJacksonville, Fla.-based Gate Petroleum,has seen this for himself. While visitinga store, he witnessed a young womanwalk in and carefully eyeball the lighterselection. After about 10 minutes, she hadchosen six BIC lighters with particulardesigns and color schemes.
“Style is an important part of this category,” said Dill. “Price point driveslighter sales for certain demographics,so you must have lower-priced lightersto appeal to value-conscious consumers.Others want more style and flare, so variety becomes important, too. It’s all aboutstyle meeting demand.”
And devoting time and attention tothe category can yield big profits. Withretails ranging from 99 cents to $1.50 fordisposables or $5 to $8 for premiums, andmargins ranging from the mid-30 to 50%,lighters provide the highest return out ofthe store on a per square foot basis, according to Dill.
Kent Raphael, vice president of merchandising for Village Pantry LLC, alsoacknowledges the abundant profits lighters can offer.
“Lighters may represent a small percentage of inside sales, but the margins areimpressive when compared to cigarettes,”said Raphael. “Lighters nearly doublewhat retailers get out of cigarettes.”
On top of impressive margins andwide consumer appeal, lighters have onlya finite life. All lighters run out eventually,and even butane lighters need fuel refillsto keep going. Customers will returnwhere they know they can get what theywant—be it another disposable or fluid fora more expensive lighter—giving lighters the potential to repeat theirprofits.
The days of retailers strictlyselling the traditional sparkwheel lighters have passed.While the number of spark wheellighters still dominates the category, according to IRI numbers,strides in electronic lighters havemade them easier-to-use and asaffordable as traditional models.
“The category doesn’t havea lot of new products, but lighters have seen quite a revolution,”said Raphael. “There are a number of spark wheel lighters still out there, but the electronic lighter is thefuture. You can get a disposable electronic lighter as inexpensive as a sparkwheel and it’s easier to use. Then there areupscale selections from Novelty Inc. featuring refillable butane lighters.”
Village Pantry runs lighter promotionseach quarter featuring both disposableand premium Novelty Inc. products.Everyday display racks are complementedby incremental displays for bundle dealsand tie-ins.
“We sell thousands of lighters everyweek. It’s amazing business that doesn’tstop,” said Raphael. “They’re items thatrespond well to promotions and we havesomething going on most of the year.”
Based in Indianapolis, Ind., VillagePantry also experiences great successwith sports-themed lighters, like whenthe Colts won the Super Bowl. It’s also ahot basketball town with its Pacers and,of course, the Indianapolis 500. The company will do special promotions focusedon sporting events that have immenselyenhanced lighter sales.
“We’re in a strong market for thosetypes of products,” he added.
The Pick of the “Lighter”
As the girth of tobacco accessory products continues to expand, it becomes moreimportant for retailers to decide what tocarry. A number of retailers mentioned thatthey would not carry any items that couldbe associated with drug paraphernalia, beit rolling papers or pipes. Unfortunately,retailers have finite amounts of space todedicate to these high-margin sales.
“First, you decide on a product based oncustomer demand and then you figure thebest way to merchandise it,” said Raphael.”Look at functionality, price, demand andfigure the best way you can sell it.”
Both Raphael and Dill have been loyalBIC customers for some time, and bothwere given the opportunity to enhancetheir lighter categories with a new BICPowerhouse display, which provides apremium and contemporary platformthat efficiently utilizes space and organizes lighters to provide a clear, simpleway for consumers to shop for productsthat reflect their needs and lifestyles,according the Sheila Fox, brand managerfor lighter marketing for BIC ConsumerProducts USA.
Prior to introducing the Powerhousedisplay about two months ago, Dill wasselling more than 20,000 BIC units permonth. Today, he’s seen that numbergrow thanks to the thoughtful and pleasing display.
The same store where the girl hadperused the lighter selection to find just the right styles of BIC lighters, Dill hadreturned shortly after the display wasput in place to find that the store had soldalmost an entire tray of higher-pricedlighters.
“I was intrigued by the effect the newdisplay had on our category,” Dill said.”Higher-end lighters, like the Grip lighters that retail between $3.79 and $4.69,are selling well because of this new rack.We’ve had it about a month and a half andthe enhanced presentation and variety hasmade a real difference.”
Raphael has also seen a difference inhis stores since introducing the racks.
“The display is the first major change in merchandising [BIC] has done in a longtime,” said Raphael. “Before, we were limited by the space the fixtures afforded us.Now the fixture gets six bricks of lighterson the three-tier display. It really organizesthe category and provides a better varietyof products while maximizing space.” =
The Name of the Game
Lil’ Cricket Food Stores also enjoysimpressive lighter sales, carefully keeping variety wide with partnerships with BICas well as several other lighter suppliers.But the bulk of the company’s lighter salescome from lower price points. Customersbecome the company’s best promotionalforce by carrying lighters that bear itsname.
“We sell about 15,000 to 20,000 lighters with our logo on them each month,”said John Zuber, vice president of marketing for the Spartanburg, S.C. chain. The company orders the lighters direct from a company called SMI that deliversthem to the Lil’ Cricketwarehouse and are then delivered directly throughself-distribution to stores. “We typically make 40 to 50% margins on lighters. Buying direct helps increase margins a bit while stillkeeping the price down.”
BIC USA Inc. Brand Manager Lighter Marketing Sheila Fox: "BICLighter Cases are designed for fashion, fit and function. The BIC GripperCase with Lighter was redesigned for 2007 for a sleeker look and a betterergonomic fit. With three major sports licenses (NFL, NASCAR and MLB),BIC is a leader in sports and non-sports licenses."
Halpern Imports President Jay Halpern: "We try to come up with concepts that resonate with contemporaryAmerica—younger and hipper designs.Our tattoo designs and hip-hop designsare an expression of what’s going on insociety today. Our in-house designerscome up with concepts that resonate
with the convenience shopper, but they also communicate with artists indifferent countries, which is where our beautiful Asian designs are borrowedfrom. It’s about finding what your customers will respond to. We see a greatopportunity in this country for micro-sized lighters, too. In certain countries,80% of lighter sales come from micro lighters, unlike the U.S. where 80% of our lighter sales are from regular-sized lighters. We’r
Novelty Inc. President Todd Green: "Our hot trends are from licensing,but car and beer themes have always been popular. We have Dodge licenses on lighters for people who drive Dodge trucks, and beer lighters that also function as bottle openers. Corona is always one of our top sellers. People buy things like this for the ‘wow factor.’ If retailers keep the category fresh by introducing different products every week, customers will buy them."
Adam Wilson, president of Largo, Fla.-based A.J. Convenience, receiveda visit from Barproducts.com about two years ago introducing the LighterLeash. He was one of the first convenience retailers to carry the product.
"There’s a certain market for the Lighter Leash and they sell very well for us," said Wilson. "Customers complain about people walkingoff with their lighters. They see the Lighter Leash and will buythree or four at a time. We go through about a bucket amonth, which is about 24 to 30 units."
Barproducts.com offers 30-ct. and 60-ct. displays thatlook great next to lighter racks at the checkout counter. Thecompany also has a 100% money-back guarantee if theproduct won’t sell. But according to Hastings, if it’s merchandised correctly, there’s nothing but sales to be gained.
"I’m convinced that as long as BIC Lighter sales are good, Lighter Leashwill also do well. Lighter consumers like to keep their lighters handy," hesaid. "Display the Lighter Leash with a BIC lighter in it and it’s literally likeputting bait out and waiting for a fish."