This article by Alex Halperin was originally published on WeedWeek, and appears here with permission.
In cannabis, marketing is everything.
With hundreds of companies selling relatively undifferentiated products, the race to dominate the industry can be understood largely in terms of who develops the deepest brand loyalty and exploits it most effectively. For operators, this includes everything from how they package product and sync their brand with their customers values, to tracking buyer sentiment before, during and after purchases.
This week the Cannabis Marketing Association hosted a series of TED-style talks on the future of branding the plant. Here are a few key insights:
Michael Brooks, Senior Marketing Strategist, Blue Dream Social
Brooks says the industry needs to understand how Facebook and Google are changing how we shop, despite the internet giants’ unwillingness to work with cannabis companies.
- He called Google Maps a “super app” for the restaurant industry in that customers can use it for everything from “search and discovery” through reservations and payments. This is all the more remarkable since “six months ago we didn’t know restaurants were an e-commerce product.”
- Within three years, he said, smart devices power by Google will initiate discussions and purchases based on past behavior. Expect Google to say, “Hello Michael, happy taco Tuesday. Would you like me to make reservations at La Hacienda?” The same could apply to topping off your stash.
- Facebook’s strategy is about building “the shopping mall of the future,” essentially a way small businesses can sell to customers directly through Instagram. Facebook’s recent purchase of CRM system Kustomer will enable businesses to, for example, import commenters to the top of their sales funnel.
- Brooks recommends that companies “flood the zone with content.” But with big tech under unprecedented scrutiny, he said PotCos need to know and understand each platforms terms of service to avoid getting booted.
- He predicted big tech won’t work with cannabis until federal legalization and then Silicon Valley will pile in very quickly. (NB: It’s worth noting that not all legal products have full access to these platforms, just ask tobacco, alcohol, pharma and porn.)
Lilli Keinaenen, Packaging designer, Changemaker Creative
Keinaenen’s talk focused on the brand-value of sustainability, or, as she put it, how “green attracts green:”
- Two out of three consumers consider sustainability when making product choices, Keinaenen said, and they’re willing to pay more for it. How much more is hard to determine. She thought 50 cents would be a reasonable mark-up for a pre-roll.
- The question then becomes, “How do you measure sustainability?” Factors which can raise a product’s carbon footprint include the lighting used to grow it and how it’s packaged, shipped and stored.
- Further complicating matters, objective assessments of products’ carbon footprints haven’t really reached cannabis yet. But she said carbon labelling is coming as is a pollution tax which will force companies to rethink their waste streams.
- Sustainability is good for business, she added citing food and personal care where sustainable products account for 16% of the market but half of all growth.
- “I hope’s the industry doesn’t lose its activist soul,” she said. Can it be “anti-capitalist but still make money?”
Jason White, Chief Marketing Officer, Curaleaf
White, whose credits include Beats by Dre and LeBron James campaigns for Nike, laid out the multi-state operator’s view of the world. Curaleaf runs 96 stores and sells products in 1,400. It’s brands include Select vapes and Grassroots.
- White argued that by combining marketing and technology, cannabis has the opportunity to “leapfrog” other industries in terms of how they relate to consumers. (As an example, Derek Espinoza, creative director of Arizona edibles company Baked Bros said he’s looking forward to “virtual worlds” where a customer can scan a QR code on their package, put on a headset and have an experience with music and visuals tailored by the brand.)
- In an industry that “sits on a difficult past,” White said it’s important for brands to have a CSR point of view. He said the killing of George Floyd last year, catalyzed Curaleaf to start building a social equity program, one it will be rolling out soon. He worries that consolidation makes it harder for people of color to join the industry.
- Curaleaf is in talks with mainstream media brands that are increasingly open to accepting cannabis marketing dollars.
- Flower now accounts for less than 50% of Curaleaf sales, down from about 75% previously, White said, and he anticipates it will continue to fall to about 25%. Flower, he said, is the toughest product type to brand.
- He predicted a point where dispensaries will ask customers “What’s ailing you?” and provide scientifically proven products in response. “It will feel like you’re at a CVS but you’re at a Curaleaf.”
Read the original Article on WeedWeek.
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