3 Factors Affecting Retail Cannabis Success | Joe Caltabiano | Professional Overview
Cannabis retailers need to understand the industry thoroughly, focus on customers relentlessly and deliver results consistently.
It is no secret that retail cannabis is on the rise, and the hard data shows why. A recent report projects the U.S. cannabis industry could reach an estimated $47.6 billion by 2026. And because of steadily rising public approval of marijuana, today’s cannabis industry is growing at an incredible pace not seen in most other emergent industries. That’s been great for profit-making, of course, but it also means that retail competition is stronger than ever.
To succeed in the legal retail market in the days ahead, today’s cannabis retailers need to guide their businesses with a mindset that fully understands the unique fundamentals on the retail side of cannabis. They also need to focus on customers fully if they want to attract the growing numbers of medical and adult-use cannabis consumers coming aboard in the United States and abroad. And retailers also have to use this framework to deliver consistent results, unless they want to be left behind by other retailers who can pull this off.
Understanding the industry
Managing a cannabis retail brand isn’t like running any other type of consumer-focused business. Not only do you have to give your attention to inventory, expenses and sales, but you have to work with the challenges put in place by rigorous state, county and municipal laws, many of which are set up to prohibit the sale of cannabis, regardless if for medical or adult use. So while other new retail businesses might launch with a focus on advertising or retail decor, cannabis retailers need to shift to an entirely new set of priorities just to open their doors.
To start with, cannabis retailers have to have a firm grasp on the obvious: Cannabis retail is different from all other retail. And no issue illustrates this better than compliance.
Cannabis retailers simply have to understand that compliance is their №1 priority. Adherence to compliance rules is essential for fulfilling state governments’ requirements placed on the industry, and it’s the measure by which all stakeholders are judged if they want to open for business. And having a business mindset formed early and attuned to compliance mandates and their challenges is vital, because trying to change it later may prove to be overly complicated and potentially costly. Identifying the best strategy for compliance requires taking the time to understand state regulatory rules and predicting where industry compliance is headed in the future as the industry matures.
Focusing on your customers
If compliance matters are what determine if a cannabis retailer can open their doors for business, it’s the retailers’ best practices that will help keep those doors open. And a paramount consideration on this topic is how effectively your retail staff meets the needs of the consumers you want to serve.
Growing a talented team for your cannabis business can be an exciting process while simultaneously being one of the most stressful. It’s a multifaceted task, but training is at the top of what you have to do in this people-focused business. Cannabis retailers need to ensure all their employees are adequately trained from Day One to provide customers with a satisfying experience that gains their loyalty and makes them repeat customers.
Taking the time to educate your team on these matters is not only key to their longevity as your employees but also your potential for success. The more time you take to train staff, the more invested they’ll feel in your company and the industry. While this may require more effort early on, it makes for much happier consumers who eventually become loyal customers who know they can trust your company for reliable and scientifically accurate cannabis information. To spark ideas on making this happen, here’s a concise listing of some things to consider.
One other important way of meeting your customers’ needs is providing the technology base that will ease their retail journey, and that’s why e-commerce decisions need to be given a lot of thought before the launch of any cannabis retail site.
Cannabis e-commerce solutions provide your business with another sales avenue outside your physical location, and it’s gaining in consumer use thanks to the ongoing COVID pandemic. This resource opens the door for more customers and more sales, and it gives your loyal customers one more substantial reason to remain loyal to your brand. With the right e-commerce framework, cannabis customers can easily purchase items from your inventory at their convenience. When businesses take advantage of tech opportunities that enhance this, it increases consumers’ confidence in your retail business, and it also empowers them to explore different products and protocols, something that certainly will benefit the overall industry as it grows.
Beyond tech considerations, it’s also important for retailers to provide a superior customer experience by creating a comfortable, clean and inviting retail environment for consumers. This is reflected in the physical retail space but also in the way staff interacts with your customers. Remember: Cannabis is an industry serving an almost exponentially rising number of new consumers who have little experience with cannabis, but it also is one that has to meet the needs and desires of a large subset of consumers who have a longtime and profoundly personal experience with marijuana. (And you’ll quickly find out who these folks are once they start complaining about your cannabis products and prices compared to what your competitors offer.) A knowledgeable budtender or store manager can do a lot to satisfy both sets of consumers, and retailers would be ill-advised to make staff training a secondary concern.
Once cannabis retailers master these initial concerns, it’s important to remain committed to delivering a consistent retail experience for your customers. (And, frankly, you need to do the same for your partners and vendors, too.) Because today’s legal cannabis industry is growing so fast and offering a widening array of products that weren’t on the market a short time ago, it’s easy for newbie customers and old school stoners alike to sometimes be dismayed. And that’s not good for business, obviously. But a consistency in how you present your retail brand will go a long way toward your future success.
One could write a book on the different performance factors retailers can consider to ensure a consistent retail experience for everyone. Monitoring social media, soliciting customer feedback, maintaining a consistent inventory of products — all of these and more are important to make customers feel more comfortable when they walk through your doors or log onto your website. But the important thing to remember is that delivering a consistent retail experience relies on your ability to identify challenges and obstacles that could lead to inconsistent results.
Certainly, there are other factors affecting retail cannabis success. But the three broad areas above give retailers a streamlined set of areas on which to focus. Once retailers ensure their understanding of the industry, its customers and the wide array of governmental responsibilities, they will be better primed to make profits and make a difference as today’s cannabis industry rises higher.