Driving Customer Engagement for Underperforming Products

For the average cannabis retailer, driving product engagement and increasing basket sizes are two of the main objectives for business growth. While products like flower and vapes have overwhelmingly dominated the market share in recent years, retailers are still trying to find creative ways to incentivize consumers to buy underperforming products like beverages, tinctures, capsules and topicals, which are only present in 1-2% of baskets. Edibles are also on the decline and their basket presence has dropped from 15% in 2014 to 9% in only five years.
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While the declining demand for edibles can be attributed to a larger variety of product offerings on the market, many of the other products are struggling primarily because of lack of consumer education and familiarity. Below are three strategies often used by mainstream retailers to drive product engagement in underperforming products.

Loyalty rewards

Reward programs are already used by a majority of dispensaries to encourage customer retention and loyalty, but these programs can also be used to prompt purchases for products that are not in high demand. For instance, if the store is using a points-based system, dispensaries can curate a specific marketplace of products that can earn double points. This double-points marketplace would be stocked with less purchased products like beverages, tinctures, capsules and topicals so that customers can feel they’re being “rewarded” to try these products. This strategy not only build the value of the customer loyalty program for the consumer, but it also allow customers to familiarize themselves with more products in the inventory. There’s a significantly higher chance that a customer will return to the dispensary to buy one of these lower performing products if they’ve already tried it.

Samples and bundles

Offering product samples is a tried and true retail tactic that has seen significant returns in mainstream industries. In the beauty industry, trial sizes allow customers who may be curious to try a product before shelling out top dollar for a full-sized product. Similarly, cannabis retailers can offer sample sizes of topicals and capsules, which can be easily packaged in smaller and discreet containers. Another successful retail tactic often used by the beauty industry is product bundling. For example, a beauty brand aiming to push a smaller product like SPF infused lip balm can create a “Fun in the Sun” set that includes their highly demanded body sunscreen, a branded hat, and their underperforming lip balm at a lower aggregate price compared to buying each item individually. The same concept can be applied to cannabis products. Flower and vape products are still trip drivers and account for 55% and 45% of single basket items. Beverages and capsules, on the other hand, are trip passengers and are found in 65% and 59% of multicategory baskets, making them an ideal add-on item. Retailers can offer product bundles over big holiday spending seasons with a mix of trip drivers and passengers that make customers feel like they are getting a variety of products at a great deal.

Product demos

Many products stay put on dispensary shelves because customers are simply unfamiliar with how to use them or what they taste like. Products like tinctures & sublinguals, capsules and topicals often have confusing usage instructions that deter customers from engaging with them. Training budtenders to provide product demonstrations at the dispensary during peak shopping hours on holidays and weekends could help to move these products. Demos give curious customers the chance to try these low-dosed products on the spot in a controlled environment and with an expert in the industry. Product demos can minimize feelings of risk and uncertainty among potential customers who have always wanted to try the product, but were uncertain about certain effects or dosages. Just like in mainstream retail settings, product demos should take place by the actual product. Budtenders presenting the dispensary’s latest beverage offering should be giving out samples nearby the actual shelf or cooler that holds the beverages.

The primary objective of these retail strategies is to help customers familiarize themselves with products in the dispensary’s inventory. Customers are often wary of pushy retailer tactics when it comes to promoting a product. These strategies put purchasing power back in the customers’ hands. When encouraging customers to engage with underperforming products, retailers should always be transparent, honest and see every question as an educational opportunity. Ultimately, a trusting relationship between consumers and retailers is the winning factor that drives sales.