Five Ways A Cannabis Shop Can Stand Apart from The Competition – Forbes

Anyone who has visited an area with a booming cannabis industry – whether a medical or adult-use market – is likely familiar with the scene: some storefronts have lines around the block while others are somewhat empty. In states where cannabis licenses are plentiful, the competition can be fierce. So how does a shop differentiate itself in a neighborhood or city and increase its market share?

In my experience working with hundreds of cannabis businesses across the country, I have found that it boils down to five factors:

Legal Cannabis in Washington State

SEATTLE, WA – MARCH 14: Employees advise clients on the more than twenty strands available at A … [+] Greener Today, a popular cannabis store in Seattle, on March 14, 2014 in Seattle, Washington. Because federal laws still prohibit the sale of legal cannabis, stores don’t have access to the banking system and have to conduct all business in cash, which creates security issues. With legal medical cannabis allowed in over 20 states, and recreational use allowed in two (Colorado and Washington), the legal cannabis market is primed to expand dramatically. Privateer Holdings, a private equity firm that invests only in legal medical and recreational cannabis markets, has already raised over 50 millions dollars from investors, effectively bringing cannabis to Wall Street (Photo by Gilles Mingasson/Getty Images).

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1.    Merchandise: Like any other retailer, cannabis shops first and foremost must know their customers and offer products they want. Different demographics demand different products. What sells in a sleepy suburban community might flop in a downtown city strip. Cannabis businesses need to understand their customers’ preferences and lifestyles. For example, shops should know if their customers prefer cannabis in flower, edible, vape, or concentrate form. They should stock their shelves accordingly and always be testing new products to see how they perform. Frequently, retailers are surprised by what products end up flying off the shelves.

2.    Staff: A pillar of a successful cannabis business is knowledgeable, engaged staff. Budtenders, who play a central role in the in-store experience, should not only ring up purchases but serve as a wise resource to customers seeking a specific product. Every cannabis business seeks the best budtenders, making hiring competitive. Retailers can build and retain quality staff by recruiting and training well, offering a sampling program that makes staff think critically about the products, and compensating them competitively, whether through base pay or tips. Budtenders are the face of the shop. They should leave a positive impression, earn customer trust, and develop lasting relationships that keep people coming back.

3.    Loyalty Programs: One challenge of operating a cannabis business, especially in a saturated marketplace, is developing a base of repeat customers. Dispensaries and cannabis retailers not only need to bring people in the door but have them return. For this reason, loyalty programs are a huge part of the retail cannabis industry. By communicating with people directly, cannabis businesses can reward repeat customers, offer deals, increase traffic, and develop name recognition. Loyalty programs can take many forms, such as free or discounted products, store credit commensurate with purchase amounts, and other experiences, such as exclusive access to top-shelf or high-demand products or opportunities to meet cultivators.

4.    Brand Presence: While loyalty programs bring customers back to a store, brand presence pushes them through the door in the first place. In my experience, a strong social media strategy, particularly on Instagram, can go far toward creating a digital footprint, raising brand awareness, and allowing cannabis businesses to differentiate themselves. When shops promote on social media, highlighting their merchandise, staff, in-store experience, and deals, they attract new customers while retaining old customers. Furthermore, platforms like Instagram offer dispensaries and cannabis retailers an opportunity to define themselves in a crowded field. Image-based messages can convey values and messages in a unique format. Billboards have also proven useful in the cannabis industry, especially when raising awareness of new businesses to a general population. Ideally, billboards will direct customers to learn more on social media.

5.    Multiple Sales Channels: Finally, given the diversity of the industry and its customers, cannabis shops are wise to offer multiple channels for people to order products easily and efficiently. While many customers wish to consult a budtender, others know exactly what they want and only seek pick-up or delivery. People lead busy lives and are accustomed to being able to access products and services quickly and with little effort. Generally, stores should create as many ways to purchase as possible, whether via phone, text, email, or on their website. If it is not simple to buy from a shop, customers will lose patience in a minute and go elsewhere.

The cannabis industry is rapidly growing and evolving. In certain areas, stores already face high levels of competition. This will only grow in intensity as the industry expands and demand for cannabis products increases each year. By keeping the above factors in mind, dispensaries and cannabis retailers can stand out among a crowded field in 2020 — and be the shop everyone buzzes about.

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