Why Customer Insights?

Retailers in any industry, especially cannabis, are finding it harder to retain customers and grow their business due to the highly competitive nature of consumer packaged goods coupled with slim margins. 

Consumers are inundated with choices, and most cannabis retailers likely carry similar inventory with similar discounting strategies. This makes it difficult for the consumer to choose where to spend their money. What if the consumer didn’t have to decide? What if they only thought of one or two go-to retailers that met all of their needs and more? 

Focusing on customer insights is where the opportunity lies for cannabis retailers to increase revenue and gain a competitive advantage. Analyzing what customers purchase and what customers say about their experience, then taking revenue generating decisions based on the analysis, can help cannabis retailers stand out. 

How To Get Started

When I was at Walmart eCommerce, I learned so much about the world of online and in-person retail from a Goliath in the industry. We tracked almost everything from average order value, units per dollar, and average selling price to paid web traffic, product page health, and more. 

Not all retailers have the luxury of nationwide warehouses / stores and the ability to maintain the long tail of products, let alone house a global data science team. So let’s cut out the noise and get started with a few key metrics that will help us identify customer groupings: 

• Cart size 
• Cart mix (what products are purchased together)
• Repeat orders
• Product type 

Groups of customers will begin to emerge such as: the customers who always purchase similar products every two weeks or the customers who only purchase one product type. You may notice certain products are purchased together more often than not across certain groups. Many pieces of information will come to the surface when paying closer attention to a few key metrics. 

What To Do Next

Now that there’s a better understanding of what purchasing habits your customer has, we can layer in additional pieces of information to fortify the analysis. Customer feedback data such as written reviews on the retailer or numeric ratings on products is a great source of information cannabis retailers can use to directly address customer needs and increase customer sentiment. 

If a cannabis retailer currently does not have access to customer feedback data, there are several feedback collection mechanisms that can be established such as email surveys, webpage pop-ups, and more.

Retailers should also review generalized data on lifestyle habits, cannabis education / comfort level, and communication preferences based on the customer groups identified. 

Revenue Generating Actions

After analyzing customer purchase habits and feedback, you’ll end up with a list of fruitful insights. It’s time to take revenue generating actions that can help your business grow. Here are a few next steps that will be informed by the analysis: 

• Optimize inventory 
• Provide tailored product suggestions 
• Modify marketing communications
• Create loyalty or subscription programs
• Host in-person or virtual customer experiences 

The examples above are decisions your business can take to increase customer sentiment and revenue, and position your business as the go-to cannabis retailer for consumers. 

The analysis and planning process can take anywhere from one month to three months. It’s very important to track the benefits received from any revenue generating actions implemented – to see if you should stay the course or pivot to another decision. Remember that data is the best asset to validate (or invalidate) decision making!

Conclusion

To conclude, cannabis retailers ought to focus on customer insights to increase revenue and gain a competitive advantage. Attending to what your customers need serves as a channel to build a strong relationship with your customers, who inadvertently will champion your products / services and help your business grow. Building lifelong customers is the goal, and that is very possible with the right attention to customer insights. 

If you’d like to brainstorm further on how to grow your cannabis retail business, feel free to schedule a complimentary 1hr consultation call with me via this sign-up form.