Cannabis Retailers: Winning with Customer Experience
Its more than price and assortment
Its not an exaggeration to say that many legal cannabis market are saturated with retail stores struggling to sell undifferentiated products. Independents and small chains have particular challenges as they face increasing consolidation, high staff turnover and price wars. Blind faith consumerism is dead and many retailers are scrutinized in the digital court of public opinion.
Today, being a 'me-too', strategically unfocused retailer is a recipe for disaster.
One way to compete is through delivering a memorable customer experience (CX) that repeatedly delights the shopper. A CX is the sum total of feelings, activities and benefits a consumer receives from the moment they consider your store (or website) to the consumption of the product or service you have provided for them.
Many world class retailers such as Nordstrom, Apple and Starbucks generate industry-leading margins and sales per square feet using CX-based strategies. Among cannabis retailers, I would consider Planet 13 (US), Value Buds (Canada) and Superette (Canada) as leading CX-focused retailers.
How do you create a winning CX?
1. Understand your local shopper and community - No one knows them better than you. Who are they, when do they buy, what are their needs and how do they learn & purchase? This analytical effort should be a mix of quantitative analysis (eg examining sales data, local demographics) as well as observing and talking to them.
2. Personalize – After you understand your target consumer segment(s), design the merchandise mix, price bands, service & marketing strategy and store aesthetics that suit their needs and expectations. To be clear, a strong CX is more than good service or a deep product assortment. It is about building and experientially delivering a unique value proposition at each touchpoint.
3. Think omnichannel delivery – Fickle yet discerning cannabis customers flip between physical, phone and online channels to purchase product, get support and acquire product information. Alignment and integration are key. You must regularly communicate and deliver a consistent brand promise and message, across all channels, pre and post transaction.
4. Don’t neglect your staff – At the core, a winning CX is sustained through an empowered and educated staff. Foster a culture that emphasizes delivering positive experiences as opposed to transactions. Finally, pay your team competitively and look to minimize expensive involuntary turnover.
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