Do This; Don’t Do That

Category management can be a marathon. So run a mile in these retailers’ shoes. What has worked for them? And what hasn’t?
do this; don't do that

Mass Exodus

When it comes to the world of vaping, know your limits

The metaphor isn't lost on Sam Odeh, CEO of Elmhurst, Ill.-based Power Mart Corp. Since October 2015, "we have completely reset our e-cig and vaping category—bringing it down to three players and pretty much conducting a fire sale on all juices and pens," Odeh says.

The e-cig and vaping downsizing in Power Marts comes down to this: Mastering this category is best left to the c-store retailers who can field the expertise to fully commit to it, he says.

“Why does someone buy quality sunglasses at a sunglasses store? Because they want to go to the experts, and it makes them feel good. The vaping customers don’t want a cashier making $9 an hour to say, ‘Here’s our deal,’ ” says Odeh, who now offers modestly priced vaping devices (SRP of under $10) from Logic Technology Development, JUUL/PAX Labs and Crown 7’s Gladiator kits.

E-cig brands at this point have been almost completely downsized. “If we turn that (inventory) over once a month, we are ecstatic,” he says.

In vape kits, JUUL has enabled him to offer one starter kit and four pods of flavors, he says. “I like the fact that the three brands we carry have not played games,” he says. “They have kept the same packaging and the same integrity we expect.”

The lesson is simple, Odeh says: “This is a very involved category—it’s the reason people go to cigar bars or vape shops, or buy those designer sunglasses. With vaping, it’s a very nostalgic feeling, a premium feeling that’s exuded. When you go to a vape shop, you are able to engage with the mixer and talk about the products.”

So if you can’t beat ’em, join ’em. That’s why Odeh is entering into a joint venture—probably to be fiinalized by late spring—with an Arizona company to open three vape shops. One will be located in Arizona, one in Chicago and another in California. Power Mart will “function as the real estate and bricks-and-mortar connection, while the other partners will handle sales and marketing,” says Odeh, who could not reveal other details about the venture.

At the c-store level, he says, “We will never ever get to the vaping expertise that these guys do as we lack the resources and know-how.”

Several years ago, it would have been prudent for the manufacturers to “pick certain stores, certain demographics and create mini-displays where a customer could walk up to a mixer (to conduct on-store sampling),” Odeh says. “Manufacturers didn’t come forward with the attractive promotions needed to sustain and grow the category. It was never done right, at least in our stores.”

Stay tuned for more info on Odeh becoming a player in the vape-shop segment.

Do's and Don'ts

Do: If you have the means, hire a specialist to run that niche category. Or if you really have the means, branch out into a different industry altogether.

Don’t: Know your limits; don’t carry more than you can sell. When Odeh had too much product to move, he narrowed down his inventory. His motto: Focus on the big players and leave the multiple shelves of choices to the specialty shops.

Continued: 'Game Management'