3 Ways Dispensaries Can Maximize the Impact of Their Retail DataDispensaries that wish to become market leaders must learn to optimize cannabis retail data points to truly understand their target audiences
Today’s cannabis retail landscape is more competitive than ever. With the plant now legal in some capacity in almost 40 states, increased consumer adoption will likely drive U.S. sales to exceed $30 billion in 2022. In order to keep pace with demand, the number of retail licenses issued also increased by 29 percent in the past year, creating a saturated market for local dispensaries trying to attract loyal customers.
Dispensaries are embracing data-driven retail and marketing strategies to anticipate consumer preferences, but most businesses are still not harnessing the full power of their internal insights. As the industry becomes more sophisticated and attractive to mainstream consumers, dispensaries that wish to become market leaders must learn to optimize retail data points to truly understand their target audiences and meet the customer exactly where they are.
Level Setting Through Data Standardization
Reliable data is integral to a successful consumer marketing campaign. Before dispensaries begin leveraging their insights, they should have a standardized system for inputting product names and SKUs. Today, products are still manually logged by staff, giving retailers an inaccurate understanding of sales performance or consumer preferences.
For instance, a dispensary could be selling peanut butter-flavored edibles. Without a standardized template, sales associates could enter the product as “PB edibles,” “peanutbutter edibles,” “pbutter edibles,” or hundreds of other variations of the product name in the store’s POS system. When these inconsistent methods are applied to the dispensary’s entire inventory, the subsequent data points are essentially unusable.
In fact, lack of data standardization is one of the most common, and avoidable retail issues that lead to operational inefficiencies. To prevent additional challenges down the road, retailers should use automated data cleansing solutions to create readable data that can offer predictable analyses.
Invest in Advanced Reporting Techniques
Dispensaries that have amassed troves of clean, readable raw data have access to digital gold –but these insights are also ineffective if businesses do not understand how to measure and deploy them. Fortunately, many platforms have already automated this process by offering advanced reporting techniques tied to specific KPIs.
These reports allow dispensaries to maximize the value of their data and tailor retail and marketing campaigns to their target consumers. By gaining a granular understanding of consumer habits and the impacts of those habits, including preferred shopping times, shopping frequency, average items per transaction and favorite brands, dispensaries can increase campaign ROI by predicting exactly when and where a customer will most likely engage with marketing communications. These techniques are already used in mainstream retail apps like Starbucks, which uses machine learning to successfully predict what a customer may want to purchase at a certain time or location based on their purchase history.
Advanced reporting can even give dispensaries further insights into how customers prefer to be reached. Due to federal and local regulations, cannabis businesses are largely limited to marketing via email, SMS, and more recently, push notifications in native apps. Email and SMS engagement has historically been challenging for dispensaries to track, but recent advanced reporting tools have made this both possible and precise.
Instead of arbitrarily email or texting store promotions, retailers can use advanced reports to discern which platform has the highest click-thru or open rates for each customer and communicate directly with them. This approach is not only cost-effective but also yields more productive outcomes. springbig’s internal data reflects that dispensaries that take advantage of advanced reporting features experience higher average campaign click-thru rates than rates seen in mainstream retail.
While advanced reporting is an invaluable asset to any retailer’s growth strategy, it is critical to use a reporting interface that is both user-friendly and understandable. In this fast-paced environment, reports should be accessible to the average employee so they can make real-time decisions about inventory, staffing and product promotions to accommodate fluctuating consumer preferences.
Creating Lifetime Customers Through Feedback Data
Standardizing data and employing advanced reporting techniques may get more customers through the door, but how can dispensaries leverage data to keep them coming back? Mainstream market research indicates that customer experiences significantly impact retail growth, with 32% of consumers reporting they would stop shopping with a brand they love after one negative experience. In cannabis, soliciting customer feedback is an often-overlooked strategy that has become increasingly important to retain loyal customers.
More dispensaries now are utilizing check-in data to send automated retail surveys to the right customer at the right time after each visit. These tailored surveys often inquire about the customer’s satisfaction regarding customer service, checkout time or their general dispensary experience. By aggregating this feedback, dispensaries have the power to identify novel shopping patterns that are hyper-specific to their storefront. Making a concerted effort to garner customer feedback sends a clear message that their opinions are valuable and enables retailers to fine-tune their product selection, staff training and even store layout to meet their target demographic’s needs.
In this increasingly saturated space, dispensaries must be fully plugged into their customers’ distinct behaviors and preferences to stay competitive. While cannabis retail has evolved tremendously over the past five years, this new phase of industry growth will likely depend on dispensaries strategically leveraging internal insights to create modern retail experiences that rival or exceed mainstream offerings.
Navin Graduated Northern Illinois University with a masters in electrical engineering and a masters in technology and management.
Navin has over 15 years experience in software engineering including leading a team of 100 engineers at Verifone, one of the world’s largest multinational payment processing and POS solution providers. In his time at Verifone, Navin crafted solutions for blue-chip brands including McDonalds, YUM Brands, and Visa.
Navin is recognized as a data-driven leader and problem solver who is able to streamline the software engineering delivery and QA process through advanced systems automation and project management, reducing time to delivery and aligning various IT sub-departments into a common system that speak the same language.