Most Retail Consumers Have No Idea What Brand of E-cig They Are Buying and Using
Recently, I sat in a restaurant across a table from an excited acquaintance. He was showing me his e-cigarette- a small device, no bigger than a “real” cigarette and clearly intended to resemble a traditional tobacco product.
“It’s great,” he said. “I can use it anywhere where I can’t smoke.”
And, then to prove it, he inhaled deeply, held the vapor briefly in his mouth and then opened his mouth to show me that a minimal amount of vapor escaped.
“See,” he said, “I can be really discrete with this. It’s great!”
Because I know quite a bit about this product, the technology and the ways in which it can be used, I acknowledged the demonstration and the practicality of it.
“Yes,” I affirmed, “It’s a pretty cool product and it’s a potential game-changer when it comes to tobacco.”
But then I conducted an experiment. I reached across the table and took the e-cigarette from him, completely enclosing my hand over it.
“Can you tell me the brand of this particular e-cigarette?” I asked.
“Brand?” he asked.
“Yes. Is this an NJOY, a Blu Cig, a Metro, a Mistic, or a LOGIC? What brand did you buy?”
He couldn’t answer the question. He couldn’t tell me the brand, the density of the nicotine or how many “puffs” he was promised he would get. He was able to tell me that it was menthol flavored and he was able to tell me where he got it and what he paid for it.
“It was on the counter of the C-store where I usually buy gas and cigarettes. I’ve bought them there before,” he informed me.
To further illustrate my point, a recent survey, conducted by a Minneapolis-based e-cigarette consultant, revealed that 68% of e-cigarette buyers could not name the brand of the last two disposable e-cigarettes they bought at a traditional retail store.
And, there in a nutshell, is one of the great challenges of the nascent e-cigarette industry. With literally hundreds of brands and hundreds of companies fighting for space in traditional tobacco outlets and C-stores, the retail consumer of this product has demonstrated little, if any brand loyalty. (On the other hand, internet consumers of this product have a great deal of brand loyalty- but, eventually, that’s destined to be a smaller piece of a larger pie and that business model is in serious jeopardy as the FDA, FTC and various states gear up to regulate this product.)
Retailers have been quick to realize this lack of brand loyalty. A store manager of a well-known Midwestern chain recently told me, “I have had six different brands on my counter in the last nine months as the companies and the distributors have come and gone and our terms and pricing have gotten progressively better. Every time we make a switch we require that these new guys provide us one or two rounds of free fill and ‘kick-ass’ POS.”
“Consumers don’t ask for e-cigarettes by brand,” he continued. “They ask if we have e-cigs and they ask what flavors we have.”
So, let me state the obvious. The claims of a number of large e-cigarette companies about the market share that they have achieved have come at considerable cost and with limited return on investment. Most consumers don’t know what they are buying and they don’t care.
So, why don’t they care? They don’t care because there’s not a whole lot of differentiation between any of these brands: they look alike, they work alike, they taste alike and they all fail in similar ways: bad batteries, messy leaks and inconsistent flavoring. Consumers buy them and use them for two reasons- as an alternative where and when they can’t smoke and as a method to try to quit smoking altogether.
And, I can’t blame them. Because, despite all of the activity and excitement in the market- projected sales of $1 billion in 2013, according to the January 21, 2103 issue of TIME magazine- there really is very little to distinguish one brand of e-cigarette from another.
So, until the FDA decides how and when they want to regulate this product and product category- or even if they can, for that matter- there will be significant barriers to establishing brand acceptance and brand loyalty. While the acceptance of the product is likely to grow from the roughly 6% of the smoking population who now claim to use them on a regular basis, brand building will take a lot longer and that will take a major commitment from manufacturers, distributors and retailers- a commitment few free compelled to make at this juncture.
Time will tell.