“Because age and identity verification can be proven via an app, it enables more effective marketing directly to the consumer,” said Brian Lind, vice president of product strategy and partnerships for Alpharetta, Ga.-based PDI Technologies, a loyalty-based digital solutions provider. He explained that technology and digital marketing together are impacting how to reach age-restricted consumers these days. “We’re seeing the big tobacco players roll out programs working directly with retailers to offer personalization based on purchase history and individual offers for individual consumers,” Lind told Convenience Store News.
His colleague Bryan Bresnahan, senior director of strategic accounts for PDI, echoed that the industry is witnessing increased capabilities from tobacco manufacturers. “Using data, they’re working to meet the consumer at the point of purchase with the right product, the right offer and the right value at the right time,” Bresnahan said.
He also pointed to recent innovations, such as age and identity verification integrated with offers in a retailer’s loyalty app, which are helping the market reach consumers with promotions before they get to the counter, creating one-to-one connections in a responsible way.
“Today, we know that ‘Joe’ is an adult discount consumer who buys tobacco on Friday when he gets paid, so we’re going to send a push to him on Thursday night to buy a product with a dollar off — this is how we get personal,” Lind added.
An Enduring Goal
Many think this type of promotional intimacy is here to stay.
“Personalized value for consumers is not going to stop. It will continue to be the goal,” Bresnahan maintained. “As tobacco evolves with different data integrations, like those offered from PDI, it makes the connection to the consumer a bit easier every time. Tobacco consumers are fiercely loyal so for the ones that won’t switch, they still need to be reminded by the brand that they’re valuable — through offers. This creates an opportunity for growth through a retailer touchpoint to connect to the 21-plus tobacco consumer.”
Cheyenne International, awarded the 2024 CSNews Category Captain award for Cigars, is focused on driving foot traffic to c-stores that carry its products through digital marketing programs, according to Jessica Fratarcangelo, marketing director.
“Digital marketing solutions are very important marketing tools in communicating with the c-store shopper, specifically nicotine consumers,” she said. “With a breadth of online information, personalized messages trump a one-size-fits-all approach every time and help create increased customer loyalty and experience.”
As retailers, including small operators, move forward with digital solutions, Fratarcangelo encourages them to lean on suppliers and manufacturers for expertise and guidance. “Just like we see on the consumer side, personalized value is important at the retail level, too,” she said.
Swisher, awarded the 2024 CSNews Category Captain award for Other Tobacco Products, is also a proponent of app-based promotions and digital merchandising in the category, both now and in the future. “They work especially well in c-stores, providing timely, relevant messages, enhancing the customer experience while driving awareness, trial and sales,” relayed Greg Schmidt, vice president of business analytics. “This seamless integration benefits both retailers and brands, creating more meaningful connections with consumers.”
He explained that Swisher recently implemented a promotional strategy using all the unique digital touchpoints provided by one of its c-store chain partners. “As a result, we observed an approximate 30% increase in initial coupon redemption and a 10% increase in repeat purchases when the loyalty promotion was run independently,” he noted.
Schmidt believes that in-store digital displays also are evolving as a dynamic way to promote new products, highlight limited-time offers and educate shoppers about products — all in real time. “These digital screens can be easily updated, allowing c-stores to quickly adapt promotions based on inventory or changing consumer trends,” he said.
The Next Frontier
While personalization will continue, it is quickly expanding into newer cutting-edge technologies such as the metaverse, NFTs and advergaming, according to Lillian Ortega, regulatory and compliance consultant for Chemular Inc., a tobacco consultancy.
For those that need definitions, she described the metaverse as virtual reality platforms/headsets, where companies are doing more product advertising. NFTs are nonfungible tokens, used to create a digital asset that can be exchanged with other NFTs in place of money or as part of a special event for a brand. Advergaming, meanwhile, promotes products by placing ads within digital games.
“These platforms provide interactive and personalized experiences for young adults that are tech-savvy consumers, allowing brands to target specific audiences based on their purchasing history and preferences,” Ortega said. “E-commerce channels and mobile apps have taken off, making it easier for companies to build direct relationships with consumers.”
She agrees that brand loyalty in the tobacco industry remains strong, but believes the approach to maintaining this connection has started to shift.
“Social media influencers and digital platforms play a significant role in this strategy, as tobacco and nicotine companies use them to foster a sense of community and exclusivity,” she said. “Nicotine pouch brands, for example, have successfully cultivated loyal customer bases by linking their products to specific lifestyles through targeted campaigns.”
Responsibly Challenged
Navigating the digital marketing landscape naturally comes with challenges, particularly the need for responsible marketing in largely unregulated online spaces.
“While platforms like social media, video games and virtual reality offer innovative engagement opportunities, they also pose the risk of inadvertently reaching underage audiences,” Ortega cautioned. “To mitigate this, companies must be proactive in self-regulation, ensuring that their marketing strategies avoid targeting minors and comply with ethical standards, even in areas where formal regulation may not yet exist.”
If the past is any indication of the future, Cheyenne International’s Fratarcangelo said she expects to see continued efforts by local, state and federal governments to push for more regulatory oversight on nicotine category promotions and marketing.
“This is nothing new and while the industry has strong associations and advocates pushing against more regulation, it’s more important than ever for retailers to be involved and fight for the fair regulation of nicotine products,” she advised.