Phillip Morris, the tobacco company, is reinventing itself: the secret behind the Iqos stores. The introduction of the new innovative product, Iqos, pushed to change also the marketing approach and launched temporary stores in key locations. We spoke with Thorsten Scheib, Director of Marketing and Member of the Board of Management of Philip Morris GmbH in Munich, and examined the secret behind the IQOS stores more closely.
Thorsten, why is Phillip Morris counting on stationary and temporary stores for the launch of the new IQOS brand?
IQOS is a tobacco product that requires a lot of explanation. We, therefore, need sufficient time with the adult smoker to explain and show our product undisturbed on site. We rely on both, stationary and temporary sales areas. Our stationary boutiques are located in so-called “high-street” locations, where a corresponding number of consumers are passing by. With the temporary stores, it is possible to react flexibly. This approach makes sense above all because we launched IQOS Germany-wide in May 2017 and quickly made our product available to a large number of adult smokers.
“Our stationary boutiques are located in so-called “high-street” areas, where a corresponding number of consumers are passing by and with the temporary stores it is possible to react flexibly on that.”
What concept is behind the IQOS stores?
As I said before, IQOS needs a lot of explanation. In addition, such a product did not exist at all before in the market. We, therefore, have many challenges in introducing such a new product. Our boutiques make a significant contribution to the branding of IQOS. Adult smokers can experience our tobacco heating system IQOS and the associated HEETS with all their senses. The design of our IQOS boutiques is very minimal, modern and focused on the product. At the same time, we want to create an inviting and warm atmosphere for our visitors, which places great emphasis on natural materials. An example: we use a lot of high-quality wood, ash and walnut in the interior. At IQOS, real tobacco is heated: in our design with natural elements, we build the bridge to tobacco, which is also a natural product. Like many major brand owners, we use so-called signature elements in our retail design, i.e. components with a high recognition value, which can be found in all our retail areas throughout Germany.
What role does the store space play for the customer experience?
The retail space plays a very important role, which is also the secret behind the Iqos stores. Many adult smokers want to get to know, touch and try this innovative IQOS. In addition to taste, the consumption of tobacco products has a lot to do with touch and ritual – the interest is correspondingly high – and accordingly, we need a lot of space in our boutiques. The time customers spend in our boutiques and pop-up stores is very long.
How do you decide on a location for an IQOS store?
We are initially looking for high-frequency locations in 1-A downtown locations with the right retail environment for us. Ultimately, a good location has a combination of many factors, including availability, price, neighbourhood, consumer frequency, and more. Also important is the division of the premises. In our boutiques, interested parties can not only buy IQOS, but we create an extraordinary so-called “consumer experience”. In the boutique, adult smokers get to know IQOS and the heat-not-burn technology and its benefits, get in touch with our boutique staff and try IQOS and the related hays. Of course, we need a corresponding area in an exposed location.
Have the brand building measures been successful so far?
Yes, very successful. They are even above expectations. We will open more IQOS boutiques in major German cities in the coming months. Recently we are also in Düsseldorf in Flinger Strasse and in Cologne in Schildergasse.
“The retail trade is changing, and here too the trend is towards digitization. But I am convinced there will always be a need for offline locations.”
Were the IQOS stores supplemented or accompanied by further measures or campaigns?
The IQOS boutiques use various marketing measures, including out-of-home campaigns. And the boutiques themselves are an essential part of our marketing funnel. Here we personally engage with adult smokers after they have become aware of the IQOS brand and boutiques through out-of-home advertising or other channels.
What do you think is the future of retail and the customer?
The retail trade is changing, and here too the trend is towards digitization. But I am convinced there will always be a need for offline locations. For example, if you want to explain something as innovative to adult smokers as IQOS.
Thanks, Thorsten for the interview. #gopopup