Vaping products and production processes continue to develop, spurring a category full of potential for convenience stores.
As the category continues to evolve with new technology, retailers can expect a big push from many smaller manufacturers to the closed systems, as the majors take over the traditional e-cigarette category. The open systems continue to experience steady growth as more retailers and manufacturers enter the market.
“I think the vaping products and the electronics are really exciting,” said Kathy Gunlock, tobacco category manager for Buchanan Energy Co. in Omaha, Neb., which operates Bucky’s Convenience Stores in the cities of Omaha and Council Bluffs, as well as in the Chicago and St. Louis areas. “With the innovations and all the things we see down the pike that’s really one of the most exciting lines, in my opinion.”
“The trend of the e-cigs was a great entry into that world,” said Joel Goldstein, president of Mr. Checkout Distributors, a national network of independent retail distributors, jobbers and wholesalers. “However, the people who have adopted that technology have surpassed it. They have wanted larger containers for the e-liquid and longer battery life, and that’s what vaping brings.”
What retailers need to know is that vaping isn’t only about the vaporizer, Goldstein said. “It’s about the bevy of accessories that come along with that.” Goldstein said. “It is on the customizing options that they can make money. It’s also from the recurring revenue from the e-liquids that they can make money.”
PRICE CONSIDERATION
Price sensitivity at retail will increase before long, which means the time for c–stores to rack up maximum sales may be right now.
“Nobody is competing on price because it’s so new still. Just like with e-cigs: when everybody got into the game, the prices on disposable e-cigs kind of dropped,” Goldstein said. “They started at $12 or $15, but now you can them for $2. I think that we’re going to see that a year or two down the line.”
Bucky’s stores currently carry just a single brand of tank product, but will soon add the NJOY line. While her chain will eventually expand its offerings to more than two brands, the additions will need to bring something new to the table, Gunlock said.
“It’s really where the most growth is,” Gunlock said. “There are so many manufacturers out there that are competing. We see, of course, the big tobacco companies in the segment, as well. So I think the innovation is what makes it exciting. I think there are improved technologies as far as the mods and vaping devices, as well as the heat-not-burn (cigarettes that heat tobacco to produce an inhalable aerosol).”
Over time, as vape products evolve, more offerings will be developed to engage consumers.
“As we continue to see it evolve and grow, we need something that differentiates the lines,” Gunlock said. “I don’t want to just simply have multiple lines that are the same stuff. We need to see something that distinguishes itself, which has something unique to offer the customer, so we continue to watch. There are so many of them out there now, and we have to proceed cautiously because so many of them won’t be around six months from now.”