Where Are Vape Shops Headed in 2018: Crisis or Opportunity?

 　　When it comes to sales channels for e-cigarettes, two are most familiar: online stores and physical stores. However, how are these two main sales channels for e-cigarettes developing in the current environment?

  　　1. Physical Stores   　　The situation of physical stores goes without saying. Although e-cigarette physical stores play a very important role in the popularization of e-cigarette culture, the high costs, site selection, procurement, decoration, and a series of complex processes, along with unstable revenue, deter potential operators and leave current operators struggling.

  　　2. Online Stores   　　The costs of e-commerce are rising, and operational pressure is increasing year by year. Taking a Tmall online store as an example: labor costs 11%, Tmall commission 5.5%, promotion costs 15%, delivery 12%, after-sales 2%, financial costs 2%, utilities and rent 2%, plus taxes; without a gross margin of over 50%, e-commerce cannot sustain operations.

  　　Whenever everything is quiet, there must be a powerful new life being nurtured, which will lead the next round of revival. Will Jack Ma's proposed "new retail" completely change the existing landscape of the e-cigarette market?

  　　Interactive New Experience   　　Integration of Online and Offline   　　In 2017, the phrase "online and offline" frequently appeared in people's views. So what does online and offline mean? How can e-cigarette sales channels achieve online and offline integration?

  　　Since last year, Alibaba has successively partnered with Sanjiang Shopping, Bailian Group, Intime Commercial, and Yonghui Supermarket to explore "new retail" experiments; Tencent has teamed up with Yonghui Supermarket to start "new retail" trials; JD.com has partnered with Yonghui and Walmart to open retail experience stores; Suning has launched the "Suning Fresh" boutique supermarket. Some of these involve online platforms opening offline experience stores, while others reference these cases, ultimately upgrading consumer channels.

  　　The data analysis of new retail's online and offline integration makes it easier for merchants to "guess" customer preferences.

  　　At the Intime Department Store's Hangzhou Xiasha factory store, "Taobao brand" products are priced the same as those on Tmall, with each product carrying a QR code for online payment via scanning. The spending in-store can be tracked, eliminating the need for store managers to calculate inventory monthly to gauge popular product categories and trends. For customers, the innovative business model and precise service of new retail allow them to say goodbye to the "one-size-fits-all" shopping experience.

  　　If you own an e-cigarette store and open online channels, you can analyze customer preferences for e-cigarette devices, brand manufacturers, and e-liquid flavors by collecting various data, thus determining product stocking quantities and display locations; the opening of online channels also provides consumers with more choices, allowing those who want to shop without leaving home to enjoy "one-click purchase, delivery to home".

  　　The integration of online and offline new retail is the way out for traditional retail and also a choice for e-cigarettes. A "new" e-cigarette store that allows online ordering from home, delivery to the workplace, and in-store experience is an upgraded shopping experience that consumers are eager to choose.

  　　New Upgrade in Consumption   　　People-oriented Sales   　　As the structure of the e-cigarette market continues to upgrade, e-cigarettes have long become a buyer's market. Therefore, to achieve good sales results, it is essential to be people-oriented. Especially since the competitors in the e-cigarette market are consumers born in the 80s and 90s, this group has never lacked material or products; what they need is a sense of "care," which requires face-to-face communication and tactile interaction to manifest.

  　　The core advantage of e-cigarette commerce is shifting from "price" to "service," but how can "pure e-commerce" compete with "physical stores" in terms of service? If traditional physical stores do not upgrade their services, how can they stand out in the competition?

  　　More activities and better consumer experiences will help merchants retain more customers.

  　　At Dangdang Bookstore, a salon activity area of about 200 square meters has been set up to host folk music concerts, oil painting auctions, hands-on experiences, book sharing, and old book exchanges, providing readers with a diverse cultural experience space; at Hema Fresh, one can select live seafood one moment and enjoy cooked seafood delicacies the next, with the option to take home prepared ingredients or order for free delivery within 30 minutes, making shopping more flexible.

  　　In the face of such a rapidly evolving market, e-cigarette stores serve as product display spaces and platforms, with cultural attributes behind them. Teaching consumers about vaping techniques, offering benefits through regular activities, and organizing various online or offline events can attract traffic and form a stable consumer base.

  　　Many physical stores are still hesitating because they have not awakened. They continue to compete on price and storefront advantages. In the future, those homogeneous products will become increasingly uncompetitive, and only those physical stores that can provide unique experiences for users will stand out.

  　　The retail industry has transitioned from an era of transactions to an era of relationships, allowing merchants to make significant changes in physical stores to create unparalleled consumption scenarios; e-commerce can also use physical stores to expand channels and cultivate a stable consumer base to seek new growth. E-cigarettes + new retail allow merchants' culture, innovation, experience, and sentiment to find their place!