BAT 'shakes things up' - adding haptics, tracking apps and more flagship stores to promote VUSE in Canada.

In the four years since vaping products were legalized for sale in Canada (May 2018), multinational tobacco companies have deployed a variety of tactics to persuade Canadians to purchase their pod-style vapes. Many of the ad campaigns which were described here earlier have largely disappeared, including television advertising, point of sale promotions, billboards and transit ads. Other tactics - like social media promotions, packaging and branding, free giveaways, and health reassurance campaigns-- remain, although some content has been changed after federal regulations on promotions came into effect in the summer of 2020.

This post looks at some of the new marketing elements BAT is engaging to encourage the use of its VUSE vaping, and how these relate to federal restrictions on vaping promotions.

1) The power of connectivity.

At the beginning of the month (May 1), BAT launched a brand new VUSE device, the VUSE ePod 2+. The novelty is not in the appearance of the device (it looks identical to the previous ePod 2) but in its engagement with the Internet of Things. 

This version of BAT's leading vaping device, the ePod is called the ePod 2+. Unlike the others, it includes Bluetooth technology to allow the device to be linked to the user's smart phone or computer. This is done using BAT's specially designed app, which allows the user to control the amount of cloud produced by the vaping device, as well as allowing the device to be tracked (electronically monitored) and remotely locked (electronically controlled). 

BAT/Imperial Tobacco's privacy policy identifies a number of ways in which this data will be collected by the company. In addition, for those using iPhones or other Apple products, the Vuse app can only be managed through another app - Nuviu, which acknowledges that usage data is collected, although not linked to identity. Another red flag about this development is that the company which manages the interface of vapers with the internet is as new as the vaping product it is monitoring: Nuviu Products Limited, was incorporated only a month ago (April 7, 2022).

2) Haptics: the science of touch

The new ePod 2+ has another novel feature -- it vibrates at certain moments to let the user know when the device has been turned on or locked/unlocked. The company encourages users to "Engage all the senses" -- adding touch to the look, smell, and taste of vaping. 

In this drug-delivery device, BAT is already using taste and smell (flavours), and sight (decorations and visual imagery) as reinforcers for the nicotine experience. Will music be next?

3) Branded storefronts and flagship stores 

Not quite two years ago (September 2020), BAT/Imperial Tobacco opened its first VUSE flagship store in Toronto. This March, the company informed the CCAA proceedings that three additional stores have been opened and that it plans to run 12 branded stores by the end of 2022. 

One of these stores opened in down town Ottawa this month (137 Rideau Street), with the same general interior layout as the Toronto store (shown below).  

These stores represent a major investment by the company (large enough to warrant disclosure to the insolvency court). Courts were told that the average lease deposit was $100,000 -- the retail value of 14,000 pods or 7,000 devices. With foot-traffic of only a handful of people an hour, the business case for these high-end stores is clearly not based on sales returns from those venues. 

4) Personalized decorations

Among the offerings at the Vuse store is the option to add personal decorations and engravings to the vaping device. Engravings can be designed by the consumer or executed by a VUSE representative. Those displayed in the stores demonstrate the impact of this personalized no-cost added-value. Other personalizations and decorations -- full colour 'skins' and ornamental rings are also available at a charge. 

VUSE X U  ​is the BAT trademark used to promote personalized design of devices "Make it truly yours in every way,"  consumers are encouraged by Instagram posts and other advertisements,  "with new personalization options from Vuse X U. Think colourful skins, adjustable rings and more engraving choices than ever before." 

5) Branded flavours

One of the ways in which BAT is responding to a potential curb on vaping flavours in Canada is by expanding its range of flavours that it expects will be permitted -- menthol-mint and tobacco. In two years the number of tobacco/mint/menthol flavours on offer by this company has grown from 2 to 13. 

In January 2020, BAT sold only one tobacco flavour in Canada for its ePod device (Tobacco Marvel), although a year later it had launched 3 more. All of these had the word "tobacco" in the flavour name. Today, the company offers  7 'tobacco' flavours, of which only two have tobacco in the flavour name. The flavours are:  Carmelina Mix, Morado Mix, Velvety Mix, Exotic Mix, Rich Mix, Golden Tobacco and Smooth Tobacco.

In January 2020, BAT sold only one mint flavour in Canada for its ePod device (Polar Mint), although a year later it had launched 2 more. Today, the company offers 6 mint flavours in Canada: Fresh Spearmint, River Mint, Forest Mint, Polar Mint, Smooth Mint, Cool Peppermint. 

Increasingly, these flavours are  'branded' with trademarked names that do not describe the flavour so much as provide it with an association that the company can market - 'river mint', 'forest mint', 'carmelina mix', 'morada mix', 'exotic mix'. 

The regulatory context

Although there is no public report of Health Canada raising concerns about these marketing efforts, it is not evident that they are all consistent with the federal Tobacco and Vaping Products Act or the Vaping Products Promotion Regulations. 

* The Flagship stores display a brand element (the VUSE trademark) in a way that they can be seen by young persons, although this is prohibited under section 2(1) of the regulations.

*  The designs and haptic features are likely to make the device appealing to young persons, although such features are prohibited by section  23.3 of the law.

In drafting the federal tobacco and vaping laws, the government chose a more permissive structure than for tobacco. All tobacco promotions in Canada are banned unless specifically permitted, but the same law permits all vaping promotions unless they are specifically prohibited.  This may have encouraged BAT to launch VUSE-branded stores, even though the federal government has previously required Philip Morris to remove the IQOS name from its Flagship stores for its heated tobacco product. 

Another challenge facing regulators is that vaping companies have more resources and fewer impediments to developing new marketing activities than governments have in responding to them. Ad campaigns can be launched within weeks, but it takes years for regulations to be developed. Many regulations do not survive the initial stages: Health Canada's plans to limit the way in which packaging and designs could be used to promote  vaping were made public in April last year, but were shelved last month.