Will the cannabis industry save retail?

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A new poll from Harris Research revealed consumers aren’t buying cannabis to get high, but rather to relieve pain (75 percent), relax (70 percent), sleep (60 percent) or manage anxiety (59 percent). That insight has profound implications on an industry increasingly faced with serving audiences searching for products for their health and wellness needs. The implications on retail–or the dispensary system in the cannabis industry–are poised to trigger a revolution in the consumer shopping experience within the industry and beyond.

The Harris Poll of 2,000 cannabis consumers or cannabis curious individuals in Colorado and California identified key areas where dispensaries are, or are positioned to, provide a new kind of customer experience in areas including education, one-on-one customer service, flexibility of customer journey and approach and store design. Ironically, it is the unique operating environment with all of its product complexity, regulatory structure and fast growth, that is driving innovation.

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For example, the Harris survey shows that half of visitors to cannabis dispensaries do no research in advance, suggesting they are relying on the retail experience for the information they need to inform their purchasing decisions. This places a higher burden on dispensaries to provide top-down education and establishes the sales associates – “budtenders” – as an essential conduit to creating a positive customer experience that navigates a complex product array as well as key features and benefits.

“The cannabis industry is faced with unique challenges when it comes to retail, including a legacy of behaviors and stigma, the regulatory environment and the fact that it is still a very young market,” said Peter Barsoom, CEO of edibles company 1906. “Many industry leaders are turning this challenge into an opportunity to reinvent the retail experience by reevaluating everything – from the educational component, the one-on-one interaction with sales associates, the flexibility of the customer journey and overall design of next generation facilities.”

Education, Budtenders, Customer Journey And Design

A recent research report from Frog Design emphasized the importance of product education among first-time visitors and in generating repeat visits and loyalty. According to Frog Research, “Education will facilitate consumer desire to repeat and refine their next experience.” The Harris poll confirmed this finding citing product information and dispensary staff as the two strongest drivers of choice.

The Harris survey showed mixed feelings among consumers about budtenders. While a large segment of repeat customers viewed budtenders as useful guides into the cannabis world, others – particularly new consumers – see budtenders as unrelatable or even untrustworthy. Nearly half of dispensary visitors (47%) felt that the budtenders expected them to know what they wanted and a quarter of visitors (26%) didn’t feel informed about what effects they should expect from the products they purchased. In some cases, particularly with Millennial audiences, customers don’t want to talk to any sales person – no matter how informed.

Perhaps more acutely than in traditional retail environments, the cannabis industry is faced with a wide range of consumers in terms of experience and understanding. Chris Znerold, Chief Marketing Officer at dispensary chain Native Roots, sees the need for flexibility within the customer journey. “Native Roots stores are reinventing the dispensary experience around a ‘choose your own adventure’ type approach. We offer delivery and pick-up for our most informed customers who don’t want to have a personal interaction, highly trained sales associates to guide those who come in and need help, and 30-minute educational sessions and consultations for those new to the process.”

As the cannabis industry expands across geographies and moves from medicinal to adult use, more and more industry leaders are carefully considering the retail experience. “Dispensaries still have a long way to go, but there are some promising signs,” said James Andrus, principal of the Andrus Group, an architecture firm working in the cannabis space. “A new generation of cannabis entrepreneurs are looking to rewrite the rules on retail and that creates some exciting opportunities for use of space, design and how form and function work together to enhance the customer experience.”

New Audiences Are The Key To The Future

The Harris poll found that more than 20% of self-declared cannabis users or cannabis curious have never been to a dispensary. More strikingly, nearly half of women responding to the survey say they are unlikely to go to a dispensary, as are a quarter of respondents 55 or older.

“There is a lot of work to be done to create a cannabis retail environment that meets the needs of consumers who currently are not or are unlikely to visit a dispensary,” said Peter Barsoom, CEO of 1906. “Given that three quarters of shoppers are looking for something other than getting stoned, we are uniquely focused on creating products and a retail experience that meets those needs, addresses new consumers in an inviting manner and reinvents the entire industry model. The very things that make the cannabis industry unique and challenging – from regulation to pace of growth to social stigma – has forced us to innovate, think beyond the traditional and lead the way for the rest of retail.”

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