Marketing Practices of Vapor Store Owners

Abstract

Objectives. We examined the marketing strategies for local vapor stores in a large metropolitan area in Oklahoma.

Methods. Vapor store owners or managers (n = 33) participated in individual interviews regarding marketing practices in 2014. We asked owners about their marketing strategies and the groups they targeted. We transcribed the interviews and analyzed them for themes.

Results. Store owners used a variety of marketing strategies to bring new customers to their stores and keep current customers coming back. These marketing strategies showed many parallels to tobacco industry strategies. Most owners engaged in some form of traditional marketing practices (e.g., print media), but only a few used radio or television advertising because of budget constraints. Owners used social media and other forms of electronic communication, pricing discounts and specials, and loyalty programs. Owners also had booths at local events, sponsored community events, and hosted them in their stores. Owners attempted to target different groups of users, such as college students and long-term smokers.

Conclusions. Local vapor store marketing practices closely resemble current and former tobacco industry marketing strategies. Surveillance of marketing practices should include local and Web-based strategies.

Electronic cigarettes and vaporizers are battery-powered nicotine delivery systems. “Vaping” is gaining public attention and popularity ahead of product regulation and information on long-term health outcomes.^1–4 Electronic cigarettes (e-cigarettes or “cigalikes” resembling cigarettes in appearance) and vaporizers (vapors or mechanical “tank” units)⁵ are most often used by current and former adult smokers to help them reduce or quit smoking, but they have also been increasingly used by college students, adolescents, smokeless users, and nonsmokers.^6–10 Whether vaping is a harm reduction or health-risk behavior has yet to be determined.^1,7,11–13 Vaping may extend nicotine addiction in smokers trying to quit or provide a mechanism for nonsmokers to develop a nicotine addiction, thus re-establishing a social norm of smoking.^4,13,14 It is also not known if vaping promotes cigarette use, particularly in adolescents and young adults.^7,15

Awareness and use of e-cigarettes and vaporizers have increased dramatically since 2010,^16–19 likely because of increased marketing and the introduction of new products.²⁰ Awareness of e-cigarettes among US adults is more than 80%, but current smokers were more aware of where e-cigarettes were advertised than those who never smoked.^18,19,21 Marketing practices may affect which groups use e-cigarettes and influence vaping social norms or diminish attitudes toward nicotine.^12,13,22,23 The Internet is the major channel for e-cigarette marketing and the focus of e-cigarette marketing research.^22,24 Content analysis of commercial messaging on Web sites and Twitter revealed cessation and health benefits were the most frequent messages to consumers,^22,25 but Web sites, social media, and blogs also promoted messages of environmental responsibility or use where cigarettes were not permitted.^22,26

Electronic cigarettes are available through a variety of outlets, including online, convenience stores, mall kiosks, stores that sell tobacco, and pharmacies.^9,27 Geographic locations vary in opportunities to purchase vaporizers in a vapor store. Little is known about how this differs from Web-based sales. Oklahoma, which is approximately 1% of the US population, is home to 6% of vapor stores.²⁸ Local vapor store owners are in a unique position to change social norms and opinions about vaping through their promotion of vaping products.²³ Our objectives were to describe local marketing practices used by vapor stores and to examine parallels with established tobacco industry marketing practices.

METHODS

We developed interview questions based on previous observations in vapor stores and through conversations with vapor store staff and current e-cigarette users.

We identified vapor stores in and immediately surrounding a large Oklahoma city through electronic searches, including Google, Vaporsearchusa.com, and advertisements in the local media. Of the 64 vapor stores we identified (stores with multiple locations were counted once), 15 were out of business, and 5 were participating in another research study. Thirty-three of the remaining 44 stores agreed to participate (75%), with 11 (25%) declining participation.

We initially contacted owners by telephone, then 1 to 2 members of the research team visited the store. The owner was asked to participate in a face-to-face interview, which took place in the store. If the owner did not have extensive contact with customers, the general manager of the store was interviewed. Owners were asked about their marketing practices, including messaging content, strategies, and channels. We conducted the interviews from May to July 2014. Participants received a $50 store gift card.

We audio recorded and transcribed the interviews, which lasted approximately 1 hour. We used NVivo (version 10; QSR International, Doncaster, Victoria, Australia) to code the transcripts. We developed the codebook, coded 2 transcripts together, then made revisions to the codebook. The remaining transcripts were coded independently with high agreement between coders. We analyzed the coded interviews for themes in marketing practices, and then we reviewed the transcripts again for additional supporting and disconfirming evidence of themes.^29,30

There were very few differences in responses from vapor store owners or managers, so they are referred to collectively as “owners.”

RESULTS

Table 1 shows approximately one half of the interviewees were within the city, and the other half were from outlying areas. One in 5 stores was part of a multistore ownership. Stores were distributed between low, mid, and high socioeconomic status neighborhoods, and most (79%) were located in commercial areas. Half had been open a year or more.

TABLE 1—

Characteristics of Participating Vapor Stores (n = 33): Oklahoma, 2014

Characteristic	No. (%)
Location
Urban	17 (52)
Smaller cities located around large city	16 (48)
Ownership
Single store	26 (79)
Multiple locations	7 (21)
Neighborhood characteristics
Low SES	9 (27)
Middle SES	18 (55)
High SES	6 (18)
Commercial	26 (79)
Residential	7 (21)
Within 5 miles of college or university
No	19 (58)
Yes	14 (42)
Length of time open
< 1 y	14 (42)
≥ 1 y	19 (58)
Shop appearance
Shop	23 (70)
Lounge/bar	10 (30)

Note. SES = socioeconomic status.

Table 2 shows the previous or current occupation of owners. Two thirds of the interviewees were men (70%). Most were small business owners who saw vaping as an emerging market.

TABLE 2—

Characteristics of Vapor Store Owners (n = 33): Oklahoma, 2014

Person Interviewed	No. (%)
Owner	22 (67)
Manager	11 (33)
Gender
Male	23 (70)
Female	10 (30)
Previous occupation of vapor store ownersa
Small business ownerb	13 (39)
Retail	5 (15)
Truck driver	2 (6)
Military	2 (6)
Apartment/hotel manager	3 (9)
Health professional	2 (6)
Other professional services	3 (9)
Other	2 (6)
Not given	1 (3)

^aCategories collapsed as necessary to protect identity of participants.

^bIncluding house cleaning, tanning salon, candy store, construction, wholesaler.

Table 3 summarizes the parallels in the major marketing channels used for tobacco marketing compared with local vapor store channels.

TABLE 3—

Types of Advertising, Promotion, and Sponsorship Used by Local Vapor Stores Compared With Current and Former Tobacco Industry Strategies: Oklahoma, 2014

Strategies Used by the Tobacco Industry to Market Tobacco (and any current restrictions on tobacco marketing)31,32	Examples of Local Vapor Store Marketing Strategies
Television/radio (complete ban)	Television advertisement (2 stores) radio advertisements
Magazine/newspaper/print (partial ban)	Advertisements in local newspaper, other print such as programs, fliers, calendars, restaurant menus, grocery receipts, and pharmacy bags
Outdoor (billboard/transit) (partial ban)	Signage, flags/banners outside store, cars wrapped in store advertisement, signage at sporting events
Direct mail	Coupons in direct mail, Groupon
Point of sale	Limited product ads on/in display cases, displays of vapor products
Branded merchandise (complete ban)	Branded merchandise such as pens, t-shirts, cups
Free distribution of tobacco (partial ban)	Free samples of e-liquid
Promotional discounts	Specials, loyalty programs, happy hour, coupons, employee and college student discounts
Sponsored events (partial ban)	Concerts, social events, cloud-blowing contests, booths at State fair, biker rallies, bars and clubs
Social media and other electronic media	Facebook, Instagram, Pinterest, smartphone app, Web site, texting

Owners reported that their choice of marketing strategies was primarily determined by the funds they had to advertise. Most commented that they had a very small budget for marketing, so they looked for alternative strategies to radio and television to bring people to their store.

Traditional Marketing Channels

Approximately one fourth of owners advertised on the radio, and 2 owners advertised on television. Most owners said that radio and television were too expensive. One owner mentioned that he was contacted by media sources to advertise on their stations: “I can’t tell you how many, the calls have been endless for people to want me to be on the radio, a commercial you know, but I can’t do that right now” (Owner 19).

Few owners invested in newspaper advertising. Several owners reported advertising on the back of grocery and pharmacy store receipts, or placing fliers on cars at local businesses or malls, apartment complexes, and on or near college campuses. Two owners wrapped their vehicles in a store advertisement. Two other stores used giveaways (cups, pens, koozies, or t-shirts).

Multiple owners remarked that the best marketing strategy for their store was to increase the size of their signage. Customers often stopped in on impulse, so signs helped more than radio, newspapers, or other channels that required a planned visit to the store.

I had to get this big long banner up top here and then people really started noticing me, and I couldn’t believe the difference, and it was like a double finance effect that next month. —Owner 19

Others saw word of mouth as one of their best marketing tools and focused on customer service: “Old school word of mouth. I mean 1 smoker is going to have like 10 smoker friends” (Owner 9).

Point of Sale and Social Media

Vapor stores displayed vapor products in clear cases around the store, but interviewers noted few other advertisements at the point of sale. Although owners described their e-liquid as high quality and promoted flavors unique to their location, e-liquid across locations was displayed in plainly labeled bottles. The “menu” of flavors was usually listed on a board or laminated paper so that they could be easily modified as flavors were added or rotated off.

Most owners used some form of social media or electronic communication, but owners varied widely in how often they utilized social media or how well it was integrated into other marketing strategies. Facebook was the primary method owners used to communicate with customers. It was an easy way for them to quickly post specials, feature new e-liquid “juice” flavors, and post pictures of newly arrived products:

We typically do weekly specials and then we’ll throw in those specials with them just a way for if people, if they keep up with our Facebook, they are rewarded for it basically. —Owner 26.

However, owners were careful what they posted on Facebook so that they did not appear to be linked to tobacco use:

Certain things I won’t put on there just because I, how do I say it, there is a boundary on Facebook that we don’t want to cross. Just because they are still naive about this, and they still do consider this a tobacco product, and there are so many kids on Facebook and all of these social media sites, that we don’t want to promote the wrong thing and have our Facebook banned. —Owner 28

You can’t advertise via Facebook, the corporations don’t accept advertisements for vaping-related products, so you can’t promote that way. —Owner 4

Instagram was used less frequently by store owners, but those who did use it commented on the ease of showing new products:

Oh yea, especially the Instagram, just because we can show the product of immediately, and. . . especially having it linked to the Facebook. . . and it will auto post in there, and as we get new devices in and such, we will make a little post about it and people want it. . . there is some devices that are 200 plus dollars that people want, because of whatever settings it might have or whatever size it may be. . . or how long the battery life will last. . . things like that it’s really nice it gets it out there and shows the product off, and we will get questions about what the product is and so we can explain it that way as well. —Owner 10

Only a few owners had active store Web sites. Most owners did not have the skills to create one on their own and did not have the money to pay someone to develop and continually update the site. Some owners mentioned Web sales as a future goal for the business. Owners discussed other limitations to Internet sales because PayPal has restricted them from receiving payments for vaping products:

As a vaping website you can’t accept (payments) using PayPal, and it goes back to the tobacco sales, but they are expanding it to include vaping, and so there has been a lot of obstacles put in place for the industry where they are really cracking down hard. —Owner 4

Owners had easily registered their stores on vaporsearchusa.com and Google Maps to increase their Internet visibility and to drive customers to their social media sites.

Vapor stores used texting to send out periodic notices of specials. Fewer store owners used this communication channel probably because it required customers to provide their phone number to the vapor store:

We’ve got about a 1000 people in text messaging. . . we send out something every 2 weeks. . . I do it for a 2 week special. . . . I don’t want half my clienteles that don’t get text messages coming in here and paying full price for it, when every other day I mean somebody else with a text message come get 2 for 1. —Owner 32

Specials and Loyalty Programs

Coupons, happy hours, and loyalty programs were the most common strategies discussed. Most stores used more than 1 type of discount program.

Owners wanted users to come into the store and spend time trying new e-liquid flavors. Owners regularly hosted happy hours with discounted products:

Happy hour you get buy 1 get 1 free, you buy a juice, you get a 10-ml bottle for free. . . it’s pretty impressive depending on your juice prices. . . ours are incredibly low. You know just another way to drive business and you know realistically your highest markup is on your juice. —Owner 11

Owners often furnished their stores to resemble bars or lounges with couches or bars and stools where customers could sit and sample juice flavors, increasing the length of time they spent in the store.

Other discounting strategies included specials, coupons, and Groupon (Groupon Inc., Chicago, IL):

We got the only place in town that got a dollar menu. Ain’t nobody else have that. . . we’ve had it since we opened all this. So you know everybody, we got consistent customers come in for that. —Owner 32

Usually Groupon gets a lot of older middle-aged female type of customers. . . I just setup a Groupon. I mean it’s horrible for the businesses, but it’s good advertisement, but anything you sell on there you are basically only going to make 25% of your money, which is basically your cost, but you know they do like $20 for 10 people, bring that $20 certificate in here and they spend more than $20 every time, and plus it’s another customer that might not have ever been in our store that we can win over. —Owner 17

The most common loyalty program was using punch cards for e-liquid and merchandise purchases:

I give ’em a little extra incentive. I sign their card, when they get 6 of my signatures on it I give them a free 10 mill bottle of juice with their next purchase. —Owner 21

We have a loyalty program that’s in the works right now that gives back to all of our customers. So it can stack on top of a discount. Say you’re a college kid that was in the military, and you have a loyalty card you got 25% discount on anything you buy…we try to shoot for a good price and we try to get people in the door for sure. College obviously, we got 18 000 people next door. —Owner 20

One store utilized an existing smartphone app:

We can send out specials that it operates on Bluetooth, so they download the app they come in and it’s a loyalty program. Once every couple of weeks we will send out a notification to them and say 10% off, bring it in and they show us this. It’s got a user card thing on there that when you make a purchase, there is a little bar code thing up there; you basically scan it and it keeps track of it and once you get 10 you get a free bottle of juice. —Owner 15

College Students

Most vapor stores provided discounts to students and faculty of local universities, particularly those located close by a school. Owners described advertising on campus, purchasing advertisements for digital signage at the stadium for football games, placing ads in the school-sponsored smartphone app, and targeting the shopping and restaurant or bar areas next to colleges or universities on the weekends by putting fliers on cars. “Well, I use Facebook a lot. . . it’s like. . . school’s almost back in, come in and get your starter kits” (Owner 18).

Vapor store owners were also being pursued by college students:

I had a sales person come visit me. It actually was a student at (name of university). . . So he was coming around and selling advertisement to different stores and stuff, so yeah we bought into it, because I’m like heck, yeah, I want those students to come over here. . . So yeah we bought the campus special. There was one other too. . . . I can’t remember what it’s called, but it goes in their planners. You know, like the first couple pages of the planners. —Owner 1

Somewhat surprisingly, 1 store was sponsoring the local high school football team; “We are actually going to be having our banners up at like the (name of high school) football games, we’ve become a sponsor of them” (Owner 6).

Targeting Different Kinds of Customers

Some owners put out general discounts to attract new customers:

Well, we don’t, we don’t like specifically shoot for men or women. We don’t even really technically just shoot for college kids. We just give them the incentive to come here. —Owner 20

Others attempted to identify groups who would find vaping attractive and created special messages for them:

We offer employee discounts to like the hospital workers, and. . . state employees, and since you’re not allowed to smoke on state property. . . I offer them discounts. . . . Basically, I just try to pin point like what each group is really interested in, I guess, and offer discounts to each of those groups too if they come in and incentives if they come. —Owner 18

And honestly the vape world hasn’t really targeted females in my opinion real well. —Owner 32 (female)

We do specific advertising on (military base). . . it is the only 1 we offer special discounts for. . . military in general. —Owner 11

Owners were also approached to advertise for these groups: “[Name] Air Force Base, they called me and asked if I would be one to purchase a certain amount of space on their site, which I could not do at the time” (Owner 18).

Targeting Local Community Through Events Hosted by the Vapor Store

Some vapor stores tried to bring the community into their stores to increase their customer base, but also to establish their store as a community gathering place. Several hosted small vaping events and cloud blowing contests.

Yea, we did it (blowing contest) in the store. We got on social media and brought people in. Bring your own mods and stand back to back. We filmed it and put it back out there. —Owner 16

Owners discussed hosting events, including a cookout, a book launch, and a jewelry show. Several displayed artwork of local artists both to help local artists and to create a specific atmosphere for their store beyond vaping products. One vapor store had a pool table, and several recreated a bar or lounge atmosphere. One store regularly hosted concerts in the store after normal hours, whereas another store hosted comedy shows:

That’s one of the nice things, a lot of the people that come to the shows say they quit going to shows like this because of the smokers and so that’s, that’s kind of a nice thing to come in, and even if some people are vaping, it’s not distracting, it doesn’t smell, we’re having people that just gave up going to concerts and shows, especially smaller venues that like it; they like the smoke-free atmosphere. —Owner 27

Vapor store owners developed creative ways to bring customers to their store and generate a sense of community among customers:

We also do Play for Juice which is our own original thing. You come in, and you can bring your own instrument or we have guitars here. Play harmonica, whatever you want to do. Come in and play, and you get a free bottle of juice. So it gets a lot of people, there’s even people that they don’t play or anything, but they bring someone that does. —Owner 27

Presence at Community Events

Vapor store owners also actively looked for opportunities to have a presence at community events, such as outdoor concerts, setting up a booth at the State Fair, and at motorcycle rallies. Several owners were allowed to set up in bars, particularly on Friday and Saturday nights. Another used PlayMyAd in local bars:

All of the bars, you know, a lot of them have went on nonsmoking, but the ones that have went nonsmoking they allow vape, and they have actually gave us permission to like set up booths or sell them in there or bars or. . . whatever we wanted because they are not selling cigarettes in the bar anymore because they went nonsmoking and I mean everybody that and a lot of people do it and some people come by and buy a little if they are going out drinking with friends and stuff sometimes it’s maybe just something to do or whenever you don’t have a drink in your hand or you are not talking. —Owner 17

Others advertised on restaurant menus and wall menus. One store recently began advertising in large hotels in close proximity to the vapor store.

DISCUSSION

Limited marketing budgets have prompted vapor store owners to reach customers through a variety of marketing strategies. Vapor store advertising has moved into channels where tobacco advertising is limited or no longer permitted, as well as current tobacco marketing channels through bars and clubs, community events, and social media.^31,32

Vapor stores used local forms of print advertising. In contrast to the larger marketing budgets and national focus of the tobacco industry, vapor stores used print in local communities, such as grocery stores, pharmacies, and newspapers. Although the tobacco industry is restricted in where they are allowed to place advertisements to limit youth exposure to tobacco advertisements, vapor store owners appeared to place print media in channels more likely to reach older smokers.

Outdoor tobacco advertising on billboards near schools and parks is currently banned.³² Vapor store owners used outdoor advertising, but had a more limited budget. Owners signaled their location to current and potential customers through smaller outdoor signs and flags. Vapor store examples of wrapping cars as a mobile outdoor advertisement was reminiscent of tobacco sponsorships of race car drivers. Vapor stores went beyond where tobacco is now allowed by advertising at college outdoor athletic events, with 1 store sponsoring a high school team. Taken together, these examples of outdoor advertising might create a more nicotine-friendly environment in communities.

For both print and outdoor advertisements, it is important to note that vapor stores were also approached by community members, including college students and local military base staff, to advertise in their publications. The relatively high density of vapor stores in this region could promote changing attitudes toward vaping and vapor stores.³¹ To the extent that vapor stores represented local small businesses in the minds of community members could indicate a normalizing of vaping in the community.

Owners occasionally mentioned direct mail strategies, but typically used an electronic version rather than print through items such as apps, text messages, or Groupon. Like the tobacco companies’ direct mail strategies, vapor stores that used texting or smartphone apps to communicate with customers collected personal data, which could prolong the relationship owners had with customers.

Vapor stores relied heavily on Internet and social media, preferring the more interactive and immediate format of social media to target current and potential users. Frequent posts about products, new flavors, events, and specials could reach hundreds or thousands of customers instantly through their smartphones and social media. Tobacco companies have also increasingly marketed their products online.³²

In response to restrictions, the tobacco industry has focused more of its marketing efforts on point of sale advertising.³² Unlike the tobacco industry, vapor store owners discussed spending most of their marketing efforts outside of the store rather than at the point of sale. This might differ from e-cigarette marketing through convenience stores, which are experiencing increases in types of products and interior and exterior advertisements.²⁷

Like the tobacco companies, owners heavily promoted specials and loyalty programs to keep customers coming back to their store to engage with staff and try new store products. Happy hours, 2-for-1 sales, and “dollar menu” specials likely encouraged increased consumption of e-liquid or the variety of products used. Owners reported giving free samples of their e-liquid at the store, at community events, and at bars or clubs. Free samples and promotional discounts made it harder to reduce or quit using tobacco,³¹ and likely had the same impact on vapor use.

Similar to past and current tobacco industry marketing strategies, vapor store owners sponsored a range of events. By participating in large community events, and bringing the community into the vapor store, many owners intentionally created an atmosphere where people could spend time with others and be entertained. These strategies likely created associations between vaping and entertainment, and built community support for vaping. Changing social environments around vaping might result in increasing acceptability of nicotine products¹³ and increase opportunities for nonusers to try vaping at 1 of these events when they might not have entered a vapor store otherwise.

In April 2014, the Food and Drug Administration expressed its intention to deem or take authority over e-cigarettes as tobacco products, but presently e-cigarettes remain unregulated by a federal agency.^4,5,33 Vapor store marketing practices, like the ones described here, could potentially be significantly affected if they came under closer inspection by the Food and Drug Administration and were required to follow restrictions similar to tobacco.³³ Vapor stores might then follow a similar pattern to tobacco companies and could invest more heavily in community events, pricing strategies, point of sale promotion, and social media. It is not clear how any restrictions to marketing practices would apply to social media.

Limitations

Our study had several limitations. Marketing practices were based on vapor store owner self-reports. The study was also limited to 1 geographical region and to storefront operations, which might limit generalizability to other geographic areas. A quarter of owners also declined to participate. Their responses might differ from those who agreed to participate.

Conclusions

In sum, local vapor stores are using marketing strategies similar to restricted or current tobacco industry strategies. How these strategies will impact some groups of users more than others, such as dual users, young adults, never smokers, or the less-educated population has not been determined. This is an important area for future public health research to explore as vaping and e-cigarettes continue to grow in popularity.