After working at Love’s Travel Stops & Country Stores Inc. for over 17 years in various roles, Victoria Sheppard knows a thing or two about the convenience store industry. She currently manages tobacco and CBD for over 540 Oklahoma City-based Love’s stores. And while Sheppard says tobacco isn’t a glamorous industry, she knows it connects the whole store and drives traffic. That’s why she always keeps an eye on consumer opinions and thinks about how she can improve the rear bar. “If you know what else your customers are buying in their cart, it can guide you to more lucrative in-store promotions placed around items they’re already buying in higher volume,” she says.
What do you like in your category?
How difficult and competitive it is. We operate in 41 states and must track all legal aspects of the industry down to the county/city level. Our customers are primarily in the trucking industry or an occasional on-the-go customer both of whom travel to another destination. If we sell specific items to them and they travel with those products, they may face interstate legal issues, which is something we need to look out for when we want to bring in new items.
How has the pandemic changed your category?
The pandemic has been interesting for tobacco. Some areas will see double-digit growth as usage opportunities increase as more customers work remotely, and you may see the numbers swing as offices reopen as mandates ease. Pantry loading was something we noticed strongly, reducing the number of transactions but increasing the overall basket. I had never seen boxes of cigars purchased in our stores before the pandemic and now it is the new normal. This, coupled with inventory allocations and stockouts, has made retailers more nimble in their product lineup.
What are your goals for 2022?
One of my department’s goals is to be the most innovative experience on the highway, and one of my goals plays into that by improving the rear bar experience. Every customer who buys something in our stores sees the tobacco space – they may not be buying a product there – but it is behind our cashiers and sets the mood of the space. I want to make this space stand out to help the overall look of the store.
What are the biggest challenges?
Legal issues and restrictions within categories have always been a challenge. We see monthly flavor bans down to the county level and we need to have the plans in place in case they pass. The Pre-Market Tobacco Application (PMTA) statuses are not complete, so we need to decide what new products we want to bring in and whether the reward is worth the potential risk. Federal and state excise tax increases or adjustments, and state minimums that must be maintained [are another challenge]. One of the additional challenges with my categories and Love’s is making sure we align with our company values and culture, [and asking]”Does this product correspond to who we are and to the image we want to give to our customers?”
What are you most looking forward to in 2022?
To continue to watch the growth of Love’s and the people I work with. We all have great strategies we’re working on in my department, and I love seeing them come to life. [I look forward to] watching the development and successes of my peers and pursuing my own personal development. People are the key to the success of any business. To be able to see everyone grow professionally and personally is a wonderful experience.
What do you like the most in the tobacco/nicotine category?
There is always change, from regulation and taxation to manufacturer price increases to innovative new products. The category is full of opportunities to make change and make a difference.
Describe your category management philosophy.
Make the category buyable. It should be easy for our customers to find out what we have to offer and what our prices are, which ultimately drives sales.
How has the pandemic changed the category?
Shopping habits seem to have changed with more customers buying rolls and cartons than before. With more people working from home, the possibilities of use have increased, which has led to an increase in consumption. If the work-from-home movement persists, there could be less of a decline than in pre-pandemic years. Production issues have really hurt some segments like cigars, but at some point they will overcome their problems.
What are your category goals for 2021?
Continue to make our stores more attractive to our customers through new layout initiatives, SKU rationalization, space optimization and executing our marketing and promotional plans with impact.
What are the most promising new products?
Zyn, let’s go! and Rogue nicotine pouches continue to grow, and manufacturers’ promotional spend makes the battle between these products fun to watch.
What are your biggest challenges today?
Order and inventory management. Convenience store turnover has always been an issue, but COVID-19 has presented additional challenges. One of them is ensuring that we have additional staff in stores who are trained to handle ordering responsibilities.
How did you collaborate with your category captains?
Communication on important issues, including product availability, has increased.
What excites you the most in this category?
Helping our customers find products that will transition the category to a smoke-free future. It is important for everyone’s well-being that we achieve this, but it must be done in a responsible way so that people switch from smoking to less harmful forms of tobacco/nicotine use over time. Legislating only on our path to a smoke-free future would have a huge negative impact on our business.