Cannabis Growth, Profit and Competition
The number of medical marijuana customers in Canada has doubled in the past year to over 200,000, and it’s estimated that over 25% of Canadians already use cannabis on a regular basis for recreational or medical purposes. Unsurprisingly, experts estimate that this number will rise at a staggering rate, meaning that revenue for cannabis businesses will be through the roof. In fact, a recent Deloitte report found that Canada’s recreational cannabis retail market could be worth up to $8.7 billion annually.
The cannabis market’s strong growth serves as a double-edged sword for current retailers, however. In particular, it will create a host of new competitors that are armed with sleek branding, modern store spaces, and tech-savvy marketing capabilities. With legalization fast approaching, this means that any cannabis retailer looking to remain competitive needs to get their strategy in order—especially with regards to customer experience.
What Is Customer Experience?
Customer experience, or CX, is a well-known term that refers to the experiences customers have with a brand. This can range from online interactions to in-store and in-person interactions at brick and mortar locations. The quality and value of these experiences are quickly becoming the competitive differentiator in all industries, with Walker famously predicting that “by 2020 customer experience will overtake price and product as the key brand differentiator.”
How CX Applies to Cannabis Retailers
It’s not difficult to see why CX will give certain cannabis brands the competitive edge. Competitors that sell the same or similar products are now largely winning on service and experience. Customers, regardless of the industry, now expect companies to personalize their retail experience by providing customized suggestions, quick and intuitive (intelligent) services and the right product at the right time for optimal convenience and efficiency. In fact, that same Walker study found that 86 percent of consumers were prepared to pay more for better customer experience.
Experts Already See the Need for Cannabis Customer Experience Technology
Cannabis retailers will need customer experience technology to survive the coming slew of competition over the next few years—and many experts in the field know it. In a Forbes article last year, activist Brian Caldwell, owner of Triple-C: The Original Cannabis Club, discussed this topic in detail, saying that he had unsuccessfully approached many tech companies in a bid to find software that would help him design his floor. He wanted customers to use tablets to explore merchandise, while his retail associates or budtenders could prepare and complete the order in the back. At the time of that article, the technology didn’t exist, but only a year later, our team at Buddi has created a viable solution to this problem with our intelligent assisted-selling and customer intelligence platform.
How It Works
Buddi allows cannabis retail businesses to do exactly what Cadwell envisioned and more. For retailers, it allows customers to see accurate information about all cannabis strains and products and provides them with custom tailored suggestions based on their needs & preferences. These preferences are then saved to a database that aggregates this customer information into detailed analytics that can be used for a wealth of purposes, such as determining product popularity, efficacy, and marketability—for both retailers and producers.
So, for instance, if one cannabis strain is selling exceptionally well with customers of a certain age bracket, both the retailer and producer can create targeted marketing strategies to leverage the strain’s popularity. This can increase sales for one particular strain, and in the same way, let retailers and producers know which strains might not be worth keeping around.
The technology also ensures budtenders don’t have to explain the same product information over and over again (saving time), because repeat customers can easily login to their profile and get exactly what they’re looking for in seconds. All of these factors enable consistency for every interaction and generate invaluable opportunities to highlight the right products to the right people at the right time. You are essentially creating the ideal experience over and over again—a move that fosters loyalty.
Loyalty in Cannabis Retail Is Worth Millions
On average, existing customers spend 67% more than new customers, according to Bain. Do the math on how much your best customers spend, and then think about how much revenue you potentially gain by creating additional loyal customers, and you begin to see why CX in the cannabis industry is not only lucrative but necessary for growth and longevity. This raises the question: Are you willing to wait until your cannabis competition adopts CX, or do you want to get ahead of the game before legalization in 2018?
Want to learn more about how Buddi can help your cannabis retail business? Click here: https://buddi.io/retailer/