As the online cigarette trade heats up, a big question is whether cigar shop chains will find themselves competing with the likes of Walgreens, Costco and even Target for the business.
According to Bloomberg, the National Cigar Federation, which represents the industry’s leading cigar retailers, has released a report that predicts cigar shop brands will continue to be the dominant players in the online retail market.
The NF report says that online retailers are set to continue to dominate the industry with Walgards, Costco, Target and even Wal-Mart all leading online cigar stores.
Cigar brands have a strong position with online retailers, said David F. Hartnett, president of the NF.
“They are the largest players and have the biggest distribution networks and they have the best customer service and they’ve always been there,” he said.
In fact, the NF predicts online retailers will continue their dominance even after the current wave of new entrants.
“We predict that the online cigar market will continue its dominance with the online retailers and the tobacco brands, as they will continue making their presence known and dominating the online marketplace,” Hartnets report said.
“It’s a dynamic we see continuing.”
Online retailers and online retailers may also compete in some of the same areas as traditional stores, like buying and selling cigarettes.
That is where the cigar shops’ biggest competition comes in.
Online retailers, like cigar shops, are set up to be online.
The NF reports that they are likely to be bigger online cigar retailers than traditional stores.
According to the report, online retailers have an opportunity to capture over a third of the online tobacco market by 2019.
“Online retailers are likely able to capture market share in the current online cigar marketplace as they have a proven track record of successfully growing their online sales,” Hartns report said, adding that online cigar retailing will likely continue to grow over the next few years.
The National Cigars Federation also expects online cigar shop sales to grow to over $2 billion by 2019 and to reach $2.5 billion by 2020.