By Norm Bour
The vaping industry is not for wimps. A few years ago you might have been able to succeed with a half-baked plan, but those days are gone. Shops are closing and everyone has excuses, but what are the real reasons?
“Stores are closing, not due to saturation, but because of bad business practices,” Jim Root, president of The Vapor Association, said. Root has been visiting vape shops across the country, gathering information about the regional differences between retailers and gaining a better understanding of the issues facing brick and mortar shops.
“If we look at any other industry, we are in line with most,” Root said. “But since we’ve seen explosive growth, the ones that close are noticeable.”
The number of vape shops has escalated from an estimated 1,000 to 2,000 shops in 2013 to between 6,000 and 8,000 shops, according to various trade directories.
But, this growth is slowing down and there actually could be a drop this year.
“I see huge consolidation and a drop in the number of stores over the next few years,” Michael Guasch, CEO of Molecule Labs, said. Guasch predicts that the consolidation will affect the oversaturated e-liquid market, as well as brick and mortar stores.
“It’s easy to blame competition,” Root said, “But we don’t hear Pepsi complaining about competition from Coke, do we?”
Successful Shops Across the Country
Since November 2014, Root has met with more than 600 shops in 37 states. He’s now nearing the end of his cross-country tour. We asked him to share some noteworthy shops that are doing well and the reason for their success. In each case, they carved out a unique niche:
RU Vaping, near Rutgers University in New Brunswick, N.J., is a great example of customer service enhanced by technology. Using an ultrasound machine (for about $100), they clean every mod and RDA they work on. “For the cost of the machine, they’re stepping up well beyond normal customer service,” Root said.
Smoke Alternative is a shop just for beginners. No mods, no high-end devices. Just starter kits and e-liquids, and lots of them. Their goal is to help cigarette smokers make the switch, and they’re crushing it in Pittsburgh, Penn. At the other extreme is the Charlotte, N.C.- based The Art of Vape, which only carries high-end mods and high quality e-liquids. No starter kits, no beginners, just aficionados in this shop. They are also doing extremely well in their 2,000-square-foot shop that converts to a lounge on weekends.
Some pockets of the country have a particularly high density of vape shops. It’s no surprise that Southern California, Ground Zero of the vaping movement, is home to hundreds of vape shops.
But Oklahoma City, Okla. is home to a staggering 300-plus shops, despite the fact that there’s only about a million people in the entire metro area. Back in October 2013, when I talked with the owners of Vapor Hub, they complained there were about 70 to 80 shops. So there’s been four-fold increase in 18 months. Just as in any other city, some will excel and some will fail.
It All Starts with Good Customer Service
Successful vape shops do several things right. Here’s a list of three areas that must be done right for a vape shop to succeed:
Customer Service: Customer acquisition, service and retention are paramount in the vaping industry, since we’re helping people switch from an insidious habit and teaching them how to use these new devices. Customer service starts when you walk into the shop to the way you’re treated during the sales process. Many shops forget all about customer follow-up, but it should be the first step in your customer retention strategy.
Adequate Inventory: Shops actually will close due to lack of inventory or improper product selection. Starting with the list of products that will sell the best, VapeMentors also can make recommendations on which distributors to work with that can easily fix this problem. If money is an issue, we can even help you secure financing.
Proper Branding & Positioning: In the eyes of the public, every vape shop is the same. But the unique vape shop examples listed above disproves that assumption. Every shop should develop their competitive position and then brand and market it strategically.
In this issue of VAPE, be sure to read about the latest Vape Shop of the Month, Waldo Vapes, in Waldo, Mo. They excel in all of these areas.
The vape space is generous to vapreneurs willing to listen and learn, but unforgiving of novices. This may well be the year when we’ll see a huge shakeout and a drop in the number of vape space businesses. Those left standing will be the ones that get it right.
Norm Bour is the founder of VapeMentors, which offers online educational programs, services and resources for anyone in the vape space, including vape shops, online stores and e-liquid brands. He’s also host of Vape Radio, a podcast series that interviews the masters of vape and thought leaders in the vape space. Contact him at norm@VapeMentors.com.