Last summer, the Japanese tobacco industry imposed a rather large burden on itself by requiring the use of Taspo (tobacco passport), an RFID identification and payment card, for adults to purchase tobacco from vending machines. While the cards require photo registration my mail, the benefit is that they can also act as cash for purchases much like PASMO, Nanaco, and other e-money.
However, despite heaps of money spent on Taspo awareness through flyers, advertising, and hands-on a marketing campaigns, most Japanese smokers aren’t signing up for the card. As a result, vending machines are losing revenue, smokers are frustrated, and convenience stores are happily picking up the slack.
While Japan has tobacco vending machines just about anywhere, rendering all of them inoperable to most of the public has driven the market back to retail. Japan used to be littered with tiny tobacco shops that sold its wares out of a small window, but these storefronts dwindled and were eventually replaced by vending machines. Now the shops are coming back, and brands are making it their new business to focus on making the shops look as spiffy as possible.
The shop above (on the left) is in Harajuku, and surrounded by what used to be busy vending machines. Now it has a brand new interior and exterior, plus staff inside to sell their wares. For marketers, this is a new opportunity to connect with customers in a way that they couldn’t with vending machines. New campaigns, free gifts, and other benefits are simple with small retail spaces.
Of course, this will all be contingent on where the government and tobacco industry go from here: Whether driver’s licenses are eventually allowed to be used at the machines, they relax the rules (unlikely), or if they reinforce an already ridiculous policy by requiring Taspo at retail locations as well.
Michael is the Editor of JapanTrends.com and Director of the 
