STG UK RESEARCH REVEALS OVER 50% OF RETAILERS ARE MISSING OUT ON TOBACCO SALES
Brand new research from Scandinavian Tobacco Group UK Limited (STG UK) today reveals that over half (51%) of convenience store retailers aren’t offering customers the all-important guidance they need on which tobacco products to purchase, presenting a huge missed opportunity. The findings have been released to coincide with the launch of STG UK’s exclusive ‘Lock, Stock and Sell’ campaign which aims to educate retailers on the opportunities and trends in the Cigar category.
The research of 1,000 consumers, conducted by Censuswide UK, indicates that while nearly half (46%)[i] of retailers are offering customers advice on what products to purchase, less than 2% of these shoppers feel that their recommendation would ultimately influence their tobacco purchasing decision. This presents an opportunity for retailers to further educate themselves on the category to provide informed advice to their customers.
Jens Christiansen, Head of Marketing & Public Affairs at STG UK, comments: “Since the arrival of the display ban and standardised packaging, shoppers are increasingly looking to retailers for advice on what to buy, especially if their favourite brand is out of stock. By taking time to really understand the category and different products on offer, retailers will be able to recommend a suitable alternative, and even a different segment within Tobacco, to avoid missing out on sales and giving them the opportunity to capitalise on the high profit margins that Cigars offer.”
The findings highlight that price in terms of out of pocket spend has the greatest influence on consumer tobacco purchasing decisions, coming out top of the poll (61%), with perceived value for money a close second (47%). Stocking cigars allow retailers to directly respond to both of these findings, with well-known brands like Café Crème offering reassurance of quality, as well as smaller pack sizes and even individually wrapped cigars offering low out of pocket spend.
Interestingly, the figures also reveal that of those smokers who haven’t tried cigars before, a quarter (24%) would be encouraged to buy them because of taste and a fifth (19%) would buy them if they thought they were cheaper, further reinforcing the consumer demand for value within the tobacco category.
Christiansen continues: “Value has been a major consumer trend for many years now but as our research shows, it can mean different things to different people. The restrictions on pack sizes within the tobacco category has come with a higher price for many shoppers, however given their exemption from these restrictions, cigars are often the cheapest option for shoppers. That’s why we always encourage retailers to stock a range of top-sellers and big-name brands from each cigar segment, like the No.1 cigar brand in the UK, Café Crème Blue which accounts for 22% of cigar sales single-handedly, Henri Wintermans Half Corona which leads the Medium/Large segment or Moments Blue, which priced at just £3.83 for a pack of 10 is dominating the Value for Money Miniatures segment.
“It’s great to see so many retailers communicating with their customers but it seems like there is still some work to be done to ensure they are offering the right support to deliver strong sales. That is why we’ve launched our Lock, Stock and Sell campaign, aimed at educating retailers on the current trends in the market, and equipping them with the tools they need to succeed with cigars. Through our campaign, we are encouraging retailers to lock in the insights revealed through our research, stock the right products for their customer base, and finally sell to those customers by offering them exactly the advice they’re looking for.”
As part of its Lock, Stock and Sell campaign, STG UK will be offering retailers advice and tools to help them make the most of the cigars opportunity through a trade press advertising campaign and in store PoS.
[i] 3% of respondents responded with ‘N/A – I never buy tobacco products from my local convenience store’