| Retailer finds love and success in the tobacco world

| Regional profile of Rahim Budhwani

| Roger Walker Talks Loyalty

Tobacco Retailer, August 2006 | (View Scanned Article)
Tobacco retailer Darren Schwartz got into the business because he loves tobacco. He always has - as long as he can remember. "Its the allure of the packaging," he says. "It's exciting for me to be able to sell all these sexy products."

Though he's quick to point out tobacco's other side. "Tobacco has been used in spiritual ceremonies for many, many years," Schwartz says. "I love tobacco products."

He started in the business 17 years ago on the wholesale end. He's now been in retail for five years and has 22 Smoker's Choice stores, most of them in New York State.

On the wholesale end of the business, he held a number of positions and even sat on the American Wholesale Marketers Association Board of Directors. He was on the board to represent the AWMA's Leadership Development Division - for young executives - of which he was president. He appreciates his time spent on the wholesale arena.

"It's given me an advantage because I've had a relationship with the manufacturers...and the business is built on relationships." Schwartz says his mentor was David Bershof of Smoker Friendly International.

Now a member of the National Association of Tobacco Outlets, Schwartz has just launched franchising of Smokers Choice in the State of New York. He got his franchise approval from the state June 1.

"We're going to start with 25 and go from there," he says. "We're going to start in New York and then we're going to branch out."

"We're going to be the biggest chain in the U.S. when we're done," Schwartz says. "That's our goal. We usually accomplish our goals. We play to win." He notes his Matamoras, PA. store, on the New Your - Pennsylvania border, is the #1 tobacco store in terms of sales in the Northeast.

He expects the first 25 franchises to go quickly. "People have been calling us for years," he says, adding that a lot of people - wholesalers, manufacturers and other retailers - stop by to visit the stores to see what's new. "Because of it's new, Smokers Choice has it." Schwartz says.

Seeing the importance of the growing RYO market, he is now putting RYO centers into each of the Smokers Choice stores. "Consumers like that", he says.

There's a kiosk with a video playing showing people how to roll. There's a description of all the products available and advice on using them - "Why to buy this tube, not that tube", Schwartz says, "We have machines they can try. When you educate them, you win." He says, noting it's very difficult to do that when you may have just one or two people working in the store.

So far, they've built one prototype, which Schwartz says is going great, and now they are launching it into the other locations.

He acknowledges today's retail tobacco environment is a tough one.

"It's very challenging because of all these restrictions," he says, but he's coping just fine. "I think coming from a wholesale, I had a better understanding of all the restrictions and challenges."

One mistake he would advise a potential retailer to avoid is not recognizing the importance of a great deal.

"People think a buy one, get one is a deal," he says, "That's not a deal. Create deals, create value for the customer. Don't rely on the manufacturer to do it for you. Create your own deals."

To Schwartz, the path to success in the tobacco business is a simple one. "The freshest products, the largest selection, the lowest prices - delivered with a smile." he says, "That's it"



NAC Magazine August 2006 | (View Scanned Article Page 1 Page 2)
On the day I visited Rahim Budhwani, I saw his loyalty program in action when he helped a customer put air in their tire and even gave another a jump start. That's how you keep a customer for life!

Budhwani has a bachelor's degree in information technology and a diploma in hotel management and food technologies. His IT degree comes in handy - he builds and configures his company computer's and DVR systems. He leaned heavily on his food technologies education when developing a full service coffee shop concept. Budhwani is a member of the Alabama Merchants Association, a 140 store trade association.

Outcomes in the last 12 months... Divesting locations, launching of new business initiatives, upgrading newly acquired stores. Sales growth, margin increases, customer loyalty and community outreach are benefits. Budhwani is in his third year of a five year plan to own 15 diversified businesses.

Major Initiatives planned in 2006...Promote new coffee shop concept and loyalty program. Coffee shop concept includes a full service coffee offering complete with barista made drinks; Launching of private branded fuel; Promoting E15 and E85 fuel.

What the company is most proud of...Work ethic; Fun environment. Budhwani prides himself in providing the opportunity for his store manager to become "owners" and work toward ownership of their own stores in the future.


CSP News April 2006
As technological advances make the use of loyalty programs more prevalent in the industry, one of the questions that retailers are asking is just how big a chain has to be to take advantage of this trend? Ask Roger Walker of Marion, Ill., and he will tell you that you only need three.

 Walker is the vice president of K.R.W. Inc. of Marion, who operates three smoke shops, two of which offer fuel, all in Kentucky. He has had a loyalty program supplied by an application firm called ezCash, LLC., Madison, Ala., for more than a year now.

 "It’s like handcuffing customers to us,” Walker told CSP Daily News, referring to the virtually captive audience. He has a situation where two of his stores and a competitor’s location are within walking distance of each other. “We saw a lot of people who would share the business between the three of us, and because they’re now getting rewarded [by us], they’ve became [our] weekly customers instead of biweekly customers"

The program ties fuel and tobacco sales to a points program, where after a certain number of points, customers get so much off of fuel or a tobacco purchase. In some cases, customers receive a coupon worth discounts on fourth-tier cigarettes, Walker said. Customers use loyalty cards that identify them as participants and trigger point accumulation. From a technology standpoint, the program requires a special card reader, but processes the transactions via equipment already in the store, Walker said.

Single-store owners and c-store chains are realizing that it is important to offer more than just convenience to be successful in today’s retail market,” David Thomas of ezCash told CSP Daily News. “Loyalty programs offer the c-store owners a unique way to differentiate themselves from each other and from the ever-threatening super stores and grocery stores.

As technology evolves, programs are emerging that have no hidden costs or monthly fees, Thomas said, making loyalty more accessible to smaller retailers. This trend is important because, as Thomas pointed out, “Convenience stores are not just about gas and tobacco any longer."