Retail 2021: This can carry Canadian hashish customers again to market

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“Cannabis is a passionate industry, so consumers are looking for ways to share that passion with others by exposing them to new products in-store and trying them out.”

Article author:

Liz stahura

Release date:

February 16, 2021 • • 1 day ago • • 3 minutes read The saleswoman Julie T'ioen poses with a jar of hemp flower inside The saleswoman Julie T’ioen poses with a glass of hemp flower in Paris on February 2, 2021. Photo by BERTRAND GUAY / AFP via Getty Images

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Given the unexpected circumstances of 2020, practically every company – in every industry – is in a state of flux. From overhauling the board of directors to re-evaluating the strategies that will be effective in the future, there is a lot for entrepreneurs to consider in 2021.

The cannabis industry was not exempt from the effects of the COVID-19 pandemic, and despite the development and diffusion of new vaccines, many still wonder what a recovery might look like.

In October last year, the BDSA projected that Canadian cannabis industry revenues would be $ 2.5 billion (CAD 3.3 billion) in 2020 and will reach $ 6.1 billion (CAD 8.1 billion) by 2025 which corresponds to an annual growth rate of 20 percent. Combined adult-use retailer sales in Alberta and British Columbia reached $ 888 million in 2020, with monthly sales peaking over $ 100 million in December.

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But as with anything in the cannabis industry, there is an additional layer of complexity to this sales data. First, we need to consider the changes in consumer behavior that the pandemic served as a catalyst.

According to BDSA data, roadside delivery and collection increased significantly in the early days of the pandemic, driven by regulations and consumer preference for contactless purchase options. While the temporary shifts are to be expected, it is more interesting to look at the long-term effects of the pandemic. Roadside pick-up has dropped back to just a few percentage points of the share of total transactions, but the delivery component has remained at a higher rate. This suggests a shift towards immediate online consumer behavior that was not triggered by the pandemic but was in full swing before the pandemic began.

What does this mean for the future of brick and mortar cannabis retailers?

As in other industries, cannabis customers turn to brick and mortar retailers to learn things that an online channel can’t: experience, education, and community engagement. Cannabis is a passionate industry, so consumers are looking for ways to share that passion with others by exposing them to new products in the store and trying them out.

Food is the perfect example of this. In fact, the two main buying drivers in this category are taste / aroma and brands that the consumer has previously used and which are practically synonymous for Canadian consumers. This indicates that there are potential barriers that retailers must overcome in order to get their customers to try new products, which is well suited for the store experience.

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In Canada, 14 percent of cannabis users said they base purchase decisions on recommendations from their budget tenders. This is a lower percentage than in the US, where 22 percent of consumers turn to budget tenders to make purchasing decisions. Understanding the occasions consumers want to satisfy with cannabis is important in understanding how and why they are buying cannabis. Then budtenders can use their brand awareness to describe the taste and effect of a product and overcome the barrier that some customers have when trying new products. The opportunity to have that one-on-one conversation with the cannabis experts who are busy in the business, to be able to see (and maybe not touch) the product, but at least get a little closer and more personal to the product and really get it viewing helps consumers feel a little more comfortable with these new purchases. This type of interaction simply cannot be replicated online.

Due to changing consumer demographics, there is no one-size-fits-all approach to meeting customer needs. As consumer demographics continue to evolve, retailers need an even more personal approach to their interactions. Consumer segmentation really is the heart and soul of any passionate industry. It distinguishes specialist dealers from the competition. By applying these segmentations based on consumer attitudes, beliefs, behaviors and needs, retailers can tailor their products and services to improve the customer experience in store. This experiential approach will be key to brick and mortar longevity.

As more people get their COVID-19 vaccines that promise the promise of a return to “normal” retail, brick and mortar retailers just need to leverage their strengths to ensure their customers return quickly, too.

Liz Stahura is the Co-Founder and President of BDSA, a leader in comprehensive, accurate, and actionable market research and consumer research for cannabis.

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