Economic downturns can be disastrous for any company—including retailers, distributors, and manufacturers of smoking accessories. But there are a number of steps you can take to keep your business on track without losing momentum and, in some cases, maybe even pick up some much-needed steam in the process.
Economic downturns can be disastrous for any company—including retailers, distributors, and manufacturers of smoking accessories. But there are a number of steps you can take to keep your business on track without losing momentum and, in some cases, maybe even pick up some much-needed steam in the process.
Protect Your Current Revenue Streams
The last thing you want in the midst of a financial drought is to jeopardize your current revenue streams. When faced with poor customer retention and a lower regional market share, Smokers Choice, a popular chain of tobacco stores and head shops throughout Pennsylvania and New York, took swift action. Their goal? To protect their current revenue streams as much as possible.
Firstly, Smokers Choice needed to create a customer loyalty program. They integrated their program with a customized point-of-sale (POS) solution to automatically apply manufacturer discounts to some of their best-selling products. Next, they utilized a loyalty app, Loyal-n-Save, to provide mobile connectivity to better cater to an increasingly younger demographic.
Smokers Choice began seeing the benefits of their loyalty program almost immediately. They experienced 184% market share growth within the first six months alone, and they soon saw a revenue increase of 448% across their entire chain. Not only did they protect the revenue of their most popular products, but they also built a loyal and dedicated base of customers—many of which still provide repeat business to this day.
Cut Unnecessary Expenses
You’ve probably already heard the most common suggestions for reducing business expenses. Tips like cutting your production costs and eliminating low-value activities can be helpful, but in some cases, you really need to think outside the box.
According to the Energy Information Administration (EIA), retailers in the U.S. pay an average electric bill of $1.50 per square foot of space. But this amount can be reduced by replacing old appliances and fixtures, minimizing daily usage of televisions, radios, and computers in your store, and turning off the lights in unused rooms and areas.
Businesses can also cut expenses by re-negotiating with suppliers and distributors. Buying in bulk can help reduce costs over a long-term basis while reorganizing and optimizing inventory levels helps identify the best-selling products that keep customers coming back for more.
Consider re-evaluating your current leasing situation, too. If you’re currently in a large building, you might be able to downsize and relocate to a new area. While you might lose a few customers during the move, you’ll likely gain some new ones after you’re all settled in.
Embrace Your Creative Side
Our industry is known for embracing creativity of all kinds, so try to tap into your creative side as much as possible. Not only will it help you stand out from the crowd, but it might even help your company survive during those lean times.
Foggy Gorilla Vape Shop, based in Canada, had to get creative in order to maintain their competitiveness in an oversaturated market. They took a multi-pronged approach that included a complete website redesign, a highly targeted SEO campaign, and social media marketing. Once their plans were in action, they tied everything together with consistent brand imagery in their stores and online.
The results speak for themselves. On a monthly basis, Foggy Gorilla Vape Shop now sees approximately 6,000 website visitors, more than 100,000 pageviews, and 3,000 unique customer actions. They’ve also increased the online followings of their location-specific Facebook profiles, which, in turn, brings even more foot traffic into their brick-and-mortar stores.
. . . cutting your production costs and eliminating low-value activities can be helpful, but in some cases, you really need to think outside the box.
Appreciate Your Employees
While it’s important to recognize your staff when times are good, it’s equally important to recognize them when times are tough. This is especially true for any employees who are putting in overtime or taking on additional responsibilities to help the business stay afloat.
Consider training your best employees in multiple roles or responsibilities. This lets you move the focus away from part-time and seasonal employees while rewarding your full-time staff with more hours and greater responsibility. When done correctly, it’s an effective way to slash your business expenses without destroying your team’s morale in the process.
Use your social media presence to give shout-outs, praise, and recognition to the top performers on your team. Establish an Employee of the Month program and offer non-monetary rewards, such as extra breaks, handwritten notes, or flexible scheduling, to incentivize their performance.
Remember, you don’t have to run a costly employee recognition program or provide budget-breaking bonuses to your most valuable teammates. In many cases, simply acknowledging their contributions is enough to keep them satisfied.
Reinforce Your Company Culture
Never lose sight of your company culture. It’s all too easy to let it fall by the wayside when you’re in the middle of an economic downturn, but now is a great time to reinforce your local roots and further strengthen bonds with staff members and the community as a whole.
Take Third Eye Shoppe for example: a popular head shop in Portland, OR, that was originally owned by Jack Herer. While they ultimately closed their doors in 2017, The Third Eye, as it came to be known, was every bit as iconic as its owner.
Jack’s dedication to both company and community could be seen before entering the shop itself; he collaborated with local artists to paint bright, colorful murals across the building’s exterior. Once inside, customers were greeted with a thorough collection of pipes, bongs, smoking accessories, and other counterculture merchandise.
But Jack connected with his employees—and the community—in other ways, too. His shop also served as a hub for cannabis activism. Oregon Ballot Measure 67, which ultimately made medical cannabis legal in the state, was drafted on the second floor of The Third Eye.
With an overarching mission of advocating for responsible cannabis use, promoting local art, and providing smokers with quality glass, Jack managed to forge a direct connection between his company culture and the needs of the local community.
