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You are here: Home / Industry News / Advertising, Marketing, PR & Research / When Just One More Is Too Many

When Just One More Is Too Many

August 13, 2018 by Mike Luce Leave a Comment

Picture yourself standing in your local grocer’s pasta aisle:

Behind you, all manner of oils: vegetable, canola, grapeseed, sesame, and peanut. Row after row of olive oils, including extra virgin, cold-pressed, Greek and Italian. You flirted with the idea of picking up a fancy olive oil for tonight’s salad but chose to focus your attention on the trip’s target: a sauce for your homemade pasta. Now you must weigh your options. A bottled sauce may not fit with the vibe you’re trying to strike with tonight’s menu. A handmade sauce could be worth the added time. Tough call. Spotting a fancy bottled sauce on a high shelf, you reach out to pull down a jar. Admiring the hand drawn logo, you do a quick check of the ingredients, and done – into the basket. Next, the wine…

Rewind that sequence. Picture an entire aisle of shoppers queued up behind you. Imagine mulling over each decision knowing the line of shoppers grows more anxious with every passing moment.

You would grab the first thing you saw.

Think of packaged cannabis products – be it gummies, chocolates, cartridges, pens, and vaporizers – as the pasta aisle. The same principles that drive customer satisfaction at the nation’s top food stores can benefit the dispensary experience. One step up the chain, manufacturers can advise their customer-facing partners on key issues such as selecting and arranging products. (Set aside loose flower for the moment.) In our upcoming Smoking & Vaping August 2018 report we will delve into the idiosyncrasies of the bud shopper.)

While enhancing customer satisfaction and optimizing revenue don’t necessarily have a 1:1 linear relationship, aligning product offerings to customer needs broadly is a good start. The industry has begun to understand in more depth the needs of the customer, well beyond the preferences differentiating medical from recreational users. Yet there’s ample opportunity to bring new insights. The thought-starters below draw from our research on the cannabis customer. While not universally applicable, and more challenging to adopt in restrictive markets, ideas such as the following illustrate where deeper customer understanding can create opportunities.

Key In On Covert Convenience

High value customers visit dispensaries often, spend at high levels, and are quite familiar with cannabis products. Understanding their needs can enable assortment and layout choices this group will find appealing. For example, heavier (one or more times daily) and longer-term (six or more years) users who most prefer vaping overwhelmingly agree (~ 95%) that vaping is more convenient than smoking. Both align on discretion as well, with most (~ 70%) in both groups citing discretion as key to their preference for vaping. Position unobtrusive products specifically for these convenience-minded customers. Having selected a plug-and-play vape product, you’ll free up time for this customer to consider more product options or move on with her day, satisfied with an easy-in-easy-out experience. For most edible customers discretion is significant (33% agree) as well yet not a top driver. However heavier edibles users show the same degree of special interest: 45% find discretion important. Stocking edible products with subtle packaging can help sensitive customers easily find and purchase low-profile products.

Opt For A Shop-in-Shop

Refillable devices are costly for dispensary operators to service. As the expense and complexity of devices increases (think PAX, Arizer, Boundless, et al.), discussions over features and performance can demand substantial bandwidth from dispensary associates. Our research for the Smoking & Vaping report shows there is some truth to the gearhead stereotype: men who prefer vaping disproportionately look for features like temperature control and hybrid functionality whereas women weigh flavor and dosage count more heavily. For dispensary operators, ensure at least one member of the staff is intimately familiar with and will enjoy talking about vaporizers. If the relationship and support is right, bring in a company representative to staff a semi-permanent counter exclusive to a specific manufacturer. The cannabis equivalent of pop-up shops are fair game as well.

As an aside: nothing says vaporizers must reside alongside all other vaping products. Even the aficionados won’t be shopping for a $200 vaporizer more than a few times per year.

Create A Halo

The close association between cannabis and wellness leads to a customer with a keen interest in health-related product messaging. Without looking at any data, industry observers should expect edibles customers will seek out food and beverage products with “natural” claims. These claims don’t necessarily trump price, flavor, and form yet do create another opportunity to align with customer need. We found 40%+ of customers who most prefer edibles see attributes such as organic, natural, and artisan as important to their purchase decisions. Why not create a certainty in the customer’s mind that all edibles on hand meet a set of criteria? Whole Foods and other specialty food stores take this approach. If this sounds too drastic, consider a middle ground: fence off a portion of edibles inventory for products with attributes such as organic and gluten-free.

Too many dispensaries lump seemingly similar products together, inviting commoditization and price pressure. Worse yet, doing so can lead to confusion and paralysis for the customer. A case full of chocolate presents too many choices. Where regulations force product to remain behind glass, just reading the package can be a challenge. Rather than rely on customers squinting to make out the on-pack claims and ingredients, manufacturers and dispensaries can partner on signage and product selection. The net result will be a dedicated space containing a diverse group of products which all share the attributes this customer group values.

Above All, Track The Trends

In addition to specific tactics like the above, industry leaders should develop and invest in customer insights overall as a strategic priority.  While not directly customer-facing, manufacturers can bring on resources to identify and track customer needs. For example, manufacturers providing low-dose or micro-dosing solutions should be engaging customer-facing partners on how to position these products that are rapidly gaining attention. From their side, dispensaries can leverage direct access to the customer. By viewing each location as a laboratory, dispensaries can measure traffic drivers, how customers react to assortment and display changes, and message back to manufacturers what is working well and what needs work. Vertically integrated operations may have a smaller network of manufacturers and should thus treat customer understanding as a key criterion when evaluating potential manufacturers to bring on board.

As the cannabis market matures, leveraging customer insights will pay dividends. Adapting tools and strategies from outside the industry will open up opportunities as well. Now is the time to inform your business decisions with insights drawn from fine-grained customer understanding.

Filed Under: Advertising, Marketing, PR & Research Tagged With: Arizer, Boundless, Dispensaries, Edibles, High Yield Insights, PAX, Vaping products

About Mike Luce

Prior to co-founding High Yield Insights, Mike Luce led multi-million dollar insights engagements with Fortune 100 consumer goods companies. Mike has nearly 20 years experience developing market insights for some of the world’s leading consumer brands, including Procter & Gamble, PepsiCo and General Mills, and retailers, such as Wal-Mart and Kroger.

High Yield Insights applies best practices and capabilities drawn from that experience to the dynamic cannabis industry.

Mike can be reached directly at [email protected]

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