Pay Attention to Wellness Industry Trends, Cannabis Leaders
Many cannabis product developers and marketers don’t think beyond the recreational needs of high volume consumers. This is understandable given that they are the largest cohort and the easiest to address.
When you drill down, however, things get blurry. Many of these buyers also consider Adult Use cannabis a wellness (if not medical) product. This overlap matters for firms looking for growth.
According to McKinsey, the US wellness space is a US$480B market, growing at 5-10% annually. Interestingly, 82% of American consumers now consider wellness a top or important priority in their everyday lives. Buying intent skews higher to Gen Z and millennial consumers across every product category.
Wellness embraces a myriad of use cases, services, and products. Many products are legitimate while lots others are outright frauds.
Cannabis growth in mature markets will depend heavily on capturing ‘white space’ opportunities. In my analysis, 70% of medium-term growth will come from increased penetration into new consumer segments. Many of these buyers will see their wellness needs as a gateway into cannabis.
LPs and MSOs would be wise to align their product plans and desired customer experience with broader wellness developments.
New McKinsey research uncovered some of these trends. Two of them should be on the cannabis’ radar:
1. Doctor recommended
Doctor approvals are the 3rd highest-ranked source of influence on purchase decisions after instore visits and recommendations from friends & family.
2. Clinical over clean
Approximately half of US consumers reported clinical effectiveness as a top purchasing driver, while only ~20% reported the same for natural or clean ingredients.
I’ll add two more trends from my client work:
3. Choosing the right Influencer
Like recreational cannabis, working with authentic and credible wellness influencers will be critical in establishing brand awareness and trust - and avoiding deceptive marketing practices.
4. Being mobile-first
Mobile is the key battleground. Prioritize mobile-centred platforms like Tik Tok and Instagram; support mobile engagement and commerce and; ensure your future-state supports an omni-channel buyer experience.
Implications
Consider these trends, directional. Marketers need to undertake their own research to understand how existing & potential users align with these trends, and how any new offerings should be positioned and sold.
While things may be straightforward for existing buyers, finding product-market fit could be quite different for potential consumers – some of whom may stigmatize cannabis or think about wellness differently.
To wit, the track record of many firms selling CBD-based wellness products in areas like cosmetics and sexual health has not been good.
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