The Good, The Bad and The Ugly

Convenience store operators must take the time to observe how their competitors are marketing tobacco.

In most of the presentations I have given over the past few years, I challenge my participants to take the time to understand how their business is doing, but to also make sure to check on the competition. After all, the competition is a part of the market reality. It validates the truths of the marketplace and these observations help make a retailer better.

From my perspective, retailing tobacco is very simple and straightforward. Yes, it has some challenges, but those retailers that are growing their overall tobacco category are benefiting from growing profits because they take time to scrutinize their expectations as well as knowing how these expectations will translate into market share and higher levels of performance.

Those that believe they have a handle on the tobacco and tobacco-related businesses are well aware of the explosion taking place in the moist smokeless category. They most likely found out some time ago that the pouch business was a significant portion of the growth in this category, and they gave it space. The good marketers are most likely looking at ways to make their business better than it was yesterday.

The good marketers are seeing this pouch growth spilling over into the product offering called snus. Leading marketers are aware that it takes time for these new offerings to take hold, but are willing to work with the manufacturers and distributors to achieve success. They are looking for ways to offer their consumers satisfaction.

Close Category Management
Effective tobacco category managers are willing to change with the times. These managers don’t give up space, but realign it to the changes that are taking place. They look closely and see that the cigar category, in spite of all the turmoil caused by increased excise taxes, is on the rebound. They have chosen to give the category more space and are reaping the rewards. To be successful, category managers don’t need to read about the positive growth in the moist, snus and cigar categories because they know they are the ones causing the growth. The good just get better.

The good category managers are also willing to take a close look at the issues. I believe they see that consumers are looking for value. They see the recent trend that is reforming the price value segment of the cigarette offer as more consumers are looking at price than they ever have before. They are embracing an opportunity to capture consumers driven by the value proposition. They see the tiers that have actually developed within the premium cigarette brands. In a fast-changing world, consumers are driven by economic necessities. The good marketers are ahead of the curve.

There is so much that one can learn by observing the industry when on the road. It’s not hard to pick out the good marketers. I enjoy seeing the work of the retailer that gives attention to the little things. It pays great dividends. Often when I am with a buyer on a market ride, I will get on my proverbial soapbox about the importance of the details. The good marketers develop a plan that focuses on the details. But, for every good retailer out there with an attention to detail, there are also the bad and the ugly, not only limiting consumers’ choices and options, but providing an ugly experience. Typically that experience begins with a filthy dispenser, signs clouding the front windows and a filthy restroom.

From my experience and my travels, it’s always clear—the good retailer meets the challenges of the marketplace and always exceeds his consumers’ expectations. As you look forward to the New Year, make it your goal to be one of those that is classified by your consumer as one of the good retailers that strives to meet their needs.

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