As the Government contemplates the introduction of plain packaging for cigarettes and 724,000 people work towards a quit date with NHS Stop Smoking Services this year, the rise of the electronic cigarette provides a powerful case study of how product manufacturers can create let along grow a whole new retail category.
Category, customer management and shopper marketing specialist Bridgethorne says the e-cigarette category, which is projected to be worth nearly £350m by 2015, demonstrates the importance of manufacturers of being aware of changing consumer habits and sharing and working with retailers to exploit those insights. An estimated 1.3m people in the UK have now switched to electronic cigarettes, which contain a battery and a heating device to vaporise a nicotine solution contained in a disposable cartridge. This gives the ‘smoker’ a nicotine hit without the harmful tar and carbon monoxide produced when tobacco is burned.
“The rise of the e-cigarette is the perfect example of how consumer and society trends have been monitored and used to inform new product development,” said John Nevens, co-founder of Bridgethorne. “By identifying and drawing on the key triggers that influence smokers who want to quit, a whole new lucrative category has been created for the benefit of both the manufacturer and the retailer.”
Effective category vision and strategy should always focus on the major drivers and tactics that increase value and volume. It should be underpinned by consumer and shopper research, and data-driven insights that allow the retailer to take advantage of the manufacturer’s expertise in category development in order to drive incremental sales.
In such circumstances, Nevens adds, relevant insights must inform the creation of a category vision and strategy, which can be shared internally within the supplier organisation but also by the supplier with potential retail trade partners. These insights can be deployed in planning to influence everything from, packaging, point of sale, position, marketing and in-store activation.
“The kind of in-depth category understanding which the leading brands in this sector will have been able to share with retailers will have cemented their position as a trusted partner capable of helping deliver increased shared revenue. It is incumbent on supplier across all product sectors to adopt the same approach to their category development activities,” adds Nevens.
Bridgethorne deploys practising professionals to introduce manufacturers to tools and processes already proven in real world situations. This includes addressing data, reporting, performance analysis and category insight. This process can improve the effectiveness and efficiency of demand and supply chain management, increase sales figures, margin value and provide retailers and consumers with ranges and categories to meet their changing needs.