All eyes on Japan

With Philip Morris International having made in the US a Premarket Tobacco Product Application for its iQOS heated-tobacco product, US tobacco retailers are being told to look to Japan to gauge how the market might develop, according to a story by Melissa Kress for Convenience Store News.

David Bishop, managing partner of sales and marketing firm Balvor LLC, reportedly has pointed to Japan as an area retailers should be watching.

For one thing, Japan Tobacco International and Philip Morris International are both opening standalone stores in Japan through which they are introducing their new heat-not-burn products.

Additionally, according to Bishop, research in Japan indicates that iQOS is creating a drag, or headwind, for traditional mass-made cigarettes.

“As that product enters the United States – as people expect it to in 2018 – what will happen if and when they open up a similar type of store in the US?,” Bishop said.

“Convenience retailers could be faced with some very stiff headwinds if similar trends develop in the US as in Japan.”

Kress writes that there are many reasons why PMI, JTI and other tobacco companies would pursue standalone outlets. One of the lessons learned from electronic cigarettes is that convenience stores aren’t necessarily the best place to introduce new innovation that requires educating the consumer.

“Speed of service is paramount; the c-store staff isn’t necessarily trained to be as knowledgeable as a vape shop or tobacconist,” Bishop said. “So, anything new that requires any degree of explanation or education is better handled in other classes of trade.”