Cannabis Legalization 2.0 is fast approaching this October, and although cannabis edibles, beverages, extracts, and topicals won’t actually hit shelves until December, it’s time for cannabis retailers to seriously consider how it’s going to affect their businesses, and start preparing.
Up until now, with only cannabis flower, pre-rolls, capsules, and oils available, most retailers have found product storage, display, and fulfillment to be reasonably manageable. Most stores are stocking anywhere between 75 – 150 unique SKUs, which is a lot for a fulfillment-driven retail business but has been manageable for most stores.
What cannabis retailers need to be ready for is the influx of new products and categories. It’s widely expected that within the first year of Cannabis 2.0, cannabis product availability will double, making the shopping process and store operations more complex. What happens when cannabis products, such as beverages, have several flavour options for each of several potency options? This means that one “product” may have 10+ variations. Cannabis consumers are still not able to engage with the product physically, meaning that product displays will become crucial, and staff members will always have to fulfill each order on the customer’s behalf.
Here are some tips to consider when future-proofing your dispensary for Cannabis 2.0.
Have Educational Resources Ready
Perhaps the most significant role that retailers and their staff will play in Cannabis 2.0 is as the primary educator for consumers. Retailers are going to be relied on by both licensed producers and governing organizations to help consumers get up-to-speed on the new alternatives that are available, and how to consume them responsibly.
All staff members should receive training on all new products and categories. Educational resources for customers should be prepared well in advance, such as information on effect onset and proper dosage. Other resources can be developed in-house, such as graphical posters or handouts. Interactive education through tablets or touchscreens will help customers learn about new product categories while keeping operations running lean.
Be Ready for New Consumers
Cannabis 1.0 products primarily appealed to existing cannabis users or more “risk-taking” consumers, but Cannabis 2.0 products are predicted to bring in an entirely different crowd, the “cannabis-curious.” Deloitte coined this term in their recent “Nurturing new growth – Canada gets ready for Cannabis 2.0” report. They mention that this new group “will include novice consumers—an older group, often female, who had little interest in combustible cannabis products and preferred to wait for Cannabis 2.0 offerings.”
For cannabis retailers, this means that the influx of new customers needs to be catered to differently. They may have very different shopping habits and needs from the Cannabis 1.0 customers who may have been more cannabis-savvy. Some ideas include hosting education nights on new categories, creating takeaway pamphlets on new products, or offering various customer service options for customers who want hands-on assistance, or who would prefer to shop independently.
Merchandise Appropriately
Proper merchanding will be critical for retailers who hope to have customers adopt new product categories, and maximize customer purchases now and into the future. Making the customer experience simple and easy to understand will be critical, while also highlighting attractive alternatives to try either now or later.
Each category should ideally have its own “space” in the store, then be segmented to make the shopping process easy to understand. For example, for a beverage display, the main information customers will need to know will be price, potency, and flavour options. An effective beverage display might be segmented by pricepoint first, like a liquor store having “top shelf” products in one area, and lower-end products elsewhere. It can then broken down based on potency, “Strong,” “Mid,” then “Light,” then finally for all available flavours.
Adapting Fulfillment
The smoothest operating cannabis stores have a fulfillment process that operates like a fast-food restaurant, where a staff member(s) can build an entire order from one centralized location, regardless of the different categories being purchased.
What cannabis retailers need to avoid is spreading out the fulfillment process for different product categories around the store in various cabinets or displays. This spread-out fulfillment process requires a staff member to walk around with a customer from shelf to shelf or display to display, opening cases and grabbing products, then bringing everything back to the till to begin the fulfillment, where there could also be a customer lineup. This process also requires the largest number of staff, which reduces to bottom-line, while adding frustration to customers who want to check out quickly.
Pro-Tip: Add in some self-service or express checkout kiosks so that customers who already know what they want can order quickly, then browse around the store while their order is being prepared for them. Once the order is ready, they can be called over to the till to pay. Simply put, the fulfillment process should ideally be completed BEFORE the customer reaches the front of the line, not beginning when they reach the front of the line. An added benefit is that browsing often leads to additional purchases or upsell opportunities, which a customer who has to wait in the lineup wouldn’t have been exposed to.
Get Interactive
With customer options about to explode, what’s going to matter most is how easily customers can navigate their options to make the right purchase decision. Many existing shopping tools, such as paper menus and TV menu boards will have a tough time scaling to meet the needs of customers who are trying to choose the right 1 or 2 products out of over 250 options. Menu boards work for McDonald’s, but they’re not selling over 250 kinds of burgers.
Tablet-based menus allow customers to quickly narrow down their options to what they’re looking for, while also displaying the various options that they can try now or later. If a customer is looking for high-CBD edibles, they can quickly look at the edibles category with one click, and high-CBD with another click, then all matching products are available for review and immediate purchase if using express checkout.
Final thoughts
Cannabis 2.0 is a whole new opportunity for cannabis retailers, and stores that adapt best to introducing these products and helping customers find products they will enjoy will come out as the winners. Although it feels like things are just getting started, this substantial market change will require adaption, and it’s never too early to start.
How We Can Help:
Buddi’s full suite of cannabis retailer technologies include in-store interactive tablet menus, ordering kiosks, and education systems, in addition to online menu and click & collect services.
For more information regarding Buddi, reach out to me: ryan@clearleaf.co