What Retailers NEED to know about electronic cigarettes
Consumer Education on Electronic Cigarettes
Once in a blue moon, a product comes along that is different and exciting to consumers and retailers alike, thanks to its innovation and ability to fill a need. The timing has to be perfect and the stage has to be set, but once it happens, a whole new category of products can emerge where there once was nothing.
Currently, the market is being flooded with hundreds of brands of electronic cigarettes, all of which are claiming to be the best. Retailers are bombarded with presentations and samples of every brand out there. So how can they find the one that will be the best choice for their company and market?
Every retailer has a personality, a reputation they have developed and want to maintain. So it is important that they partner with the right brand – no matter the category. We have had many meetings with most of the major retailers in the US and have learned first-hand the key factors they consider during their brand selection process. Each one may be more or less important to different retailers but the basic factors are consistent: quality, brand awareness, and marketing support – and of course, low risk with high profit.
90% of e-cigarette brands are exact replicas of each other – made in China, and rebranded by different importers. The liquid inhalant is made in mass quantities with no regulations or consistency from batch to batch. These companies are not concerned with consumer safety; they see only the money-making potential in this time of import freedom and little to no restrictions on the category. Thankfully, these 90% will disappear in the coming months. In the meantime, they are setting unrealistic expectations for retailers and consumers; offering products at lower price points which they’re able to do because of lower quality.
Remember a few years ago the energy drink explosion? Consumers were seeing a flurry of energy drinks with catchy names and funny “tongue in cheek” slogans all vying for a piece of the pie. Now what do you see? At most there are 5 brands that have made the cut. What we are seeing right now is a façade of what the electronic cigarette category actually is. Electronic Cigarettes are affordable, but if produced correctly, with consumers in mind they are not “cheap”. Testing, certifications, safety innovative features and branding cost money, and only a handful of brands out there have long term potential. And even some of those few have many changes to make if they plan to survive the regulations.
So my best advice is “buyer beware”. Do your research, test the products yourself, find the one that is right for you. Understand why one may cost more, and another may look better but still taste the same as a third. Decide if your goals long term or short term, and choose accordingly. The industry will run its course, money will be made, money will be lost, companies will disappear and sometimes the retailer will be the one throwing away the leftover inventory and taking the loss. But it will be a heck of a ride, so enjoy the show.
