Everything in cannabis retail is powered by one thing: the consumer's dollar. The money a customer spends at a cannabis store pays for most everything in the cannabis industry, including the distributers, producers, cultivators, and all the ancillary services in between. Cannabis store owners and managers need to make strategic business decisions every day in order to continue the flow of the consumer's dollar to the industry. These decisions cannot be made effectively without the help of cannabis data.
Retailer Pulse and Retailer Premium dashboards and tools allow retailers to use their store's data to learn more about their customers, their purchasing habits, understand product seasonality, increase revenue, measure the performance of employees, and more. Below, we take a look at how this data can play a part in your every day retail operations, saving you time and money while increasing profits.
How data can help you get your store started
When opening a cannabis store, there is a lot that you need to keep in mind. You'll likely be busy trying to gain customers, building loyalty, optimizing your product selection, managing sales staff, and the list goes on. Retailer Starter Pack helps new stores, as well as expanding businesses, save time by guiding you from the minute you get your business license all the way through to becoming an efficient, well-established business.
Starter Pack provides you with consumer insights to power your opening strategy with data on category assortment, category pricing, consumer basket metrics, inventory carry, and other sales metrics. You'll get the answers you need with access to key data points to build a successful business, before your doors open. We also pair you with an analyst to teach you how to take action on these valuable insights. To learn more about how Starter Pack can help make starting your business easier, request a demo with us.
How data can help you manage inventory
Going out of stock on popular products can cost you
One of the worst feelings a cannabis shopper can have is going to a store for a specific product and finding out that it is not available when they get there. You'll then have to rely on your sales associates to make appropriate substitutions for your customers, and that can be tricky considering the variety of cannabis products you may have on your shelves. Situations like this can lose the consumer's trust and make them less likely to visit your store.
Being out of stock can also hurt your revenue. If a popular brand of flower that's priced at $40 and is sold 15 times a day goes out of stock for a week, that means $4,200 of revenue was lost.
The Estimated Days Remaining dashboard in Retailer Pulse tells you when you will run out of products so that you can reorder before they run out.
Being overstocked on products is bad too
Flower can get stale and dry if it's on the shelf for too long. Edibles and tinctures also have expiration dates to keep in mind. The longer a product stays on your shelf, the harder it becomes to sell. Having capital tied up in inventory that's having a hard time selling can hurt a business, especially considering how most cannabis retailers are operating an all-cash business.
Using historical data such as the Average In-Stock Units per Day dashboard in Retailer Premium, you can make sure you are ordering the right amount of products, ensuring products don't stay in your store for too long. The faster a product sells, the sooner the Reorder Report will recommend that product be ordered.
Eliminate effort & guesswork with Vendor Managed Inventory
Managing orders from so many different vendors can be challenging. Sharing your inventory data with your vendors can help to automate the process of creating orders and shifts the responsibility of keeping your shelves stocked to the vendors.
Shifting this responsibility to vendors can eliminate a lot of effort since they are incentivized to make sure their products are selling well in your store. Stale products can reflect poorly on vendors and more sales means more profits for both the store as well as the vendors. The Automated Email functionality in Retailer Pulse sends Reorder Reports to your vendors at regular intervals so they can determine when the store needs more of their products.
You can empower your vendors by sharing retail data with vendors through Headset Bridge. With Bridge, vendors can not only see what needs to be restocked, but also the sales trends of their brand within the store, the pace at which their products are selling, and more information that will help them create a product strategy within the store that will satisfy the vendor's as well as the store's bottom lines.
How data can help drive sales
Knowing who your customers are, what they are buying, and when they are buying are all key data points that are needed in order to create programs that can boost sales. Retailer data can help you create effective strategies and programs in three ways: discounts, pricing strategies, and marketing campaigns.
Discounts drive more traffic & bigger spend
As discount percentages go up, basket spend per transaction also goes up. In other words, consumers are more willing to spend more per transaction when there are discounts available. This is a pattern we see at most stores.
Retailer Pulse allows you to see discounts either in percentage bins (e.g. 5%-10%, 10%-15%, etc.) or by named discounts directly from your POS (e.g. “Munchie Mondays - 10% off Edibles”). You can measure the performance of particular discount campaigns to see which ones lead to a measurable increase in number of transactions or size of transactions. You can also look at the average discount by brand, category, or SKU. If there are items in the store that no one buys unless they are discounted, it might be time to review the pricing strategy.
Pricing strategy can maximize sales & profit
There are several ways to look at how items are priced to determine what prices are appropriate. One way is by comparing similar products across our Units per Day dashboard. If there are products that aren't performing as well as others in that category or brand, the price of those items might need to be adjusted.
Another way to approach pricing strategy is by simply experimenting. With the Impact Analysis tool in Retailer Pulse, retailers can test new prices for products and see what kind of growth results in unit sales, total revenue, and profit. You can also test different strategies in different stores and compare the results.
Spend marketing dollars effectively & get more customers
The first step in creating effective marketing campaigns is to learn who the customers are. With the marketing dashboards in Retailer Premium, you'll be able to see the demographics of those coming to your store. Using referral analysis will allow a retailer to understand which programs are worth prioritizing and which programs are not worth the cost. Trip analysis can tell you what is bringing customers back to your store and what products are resonating the most with your best customers.
How data can help measure employee performance
Transactions by sales associate
Retailer Premium allows retail owners and managers see which sales associate is getting through the highest number of tickets and transactions. You can also see who is driving the biggest baskets.
Budtender brand affinity
Budtenders have their own preferences. It is not uncommon to have some staff members who are well-versed in a particular type of product or brand, and their sales can often reflect that. Using the Budtender Brand Affinity tool in Retailer Pulse, you can see who sells the most of which products. This can also help to identify the experts in your staff that can help train the rest on how to increase sales of those products.
Brands will also often run promotions that include product discounts if there is a little friendly competition within the staff to see who can move the most of their products. Using Retailer Pulse, you can effectively measure the performance of all of your sales staff to show those brands who their champions are.
Hourly transactions and resource planning
Knowing how many staff members to have available during certain times is key to being able to efficiently serve customers and keep costs down. Retailer Pulse allows you to see Average Transactions per Hour for the store and each staff member so you can plan for how many people need to be working at a specific time.
How data can help you understand your customers
Different age groups and genders buy different products. For example in general, people aged 50 or older are more likely to buy tinctures and topicals and women are more likely to buy edibles in some markets. Exploring who comes into your store and learning the differences between their product preferences will help you tailor experiences to your existing customer base, or even grow underrepresented populations.
Your retail data can help you determine if you need to adjust prices to attract a certain group of customers or provide discounts. Maybe there are gaps in your product assortment that may help bring in new customers. Or, if you're frequently running out of certain popular products, maybe it's because your are underestimating how big the accompanying demographic is coming to your store. Learning your store's trends can help you better optimize for demographics.
Behavioral analysis: Looking at baskets
There are two ways to increase revenue: increase the number of transactions or increase the size of your existing transactions. Analyzing demographics data will allow a retailer to increase the number of transactions, but basket analysis is required to increase the size of existing transactions.
One way to increase the size of existing transactions is to understand attachment rates, or which products are frequently purchased together. Retailer Premium can hep you easily understand attachment rates, which you can then use to train your sales staff to suggest these combinations of products, or change the layout of the store to group certain products together.
Another helpful thing Retailer Premium can help you understand is which products are driving people to your store versus which products are add-ons that customers select after they get to your store. Advertising promotional discounts for products that drive sales can attract more customers to your store, but slashing the prices of those add-ons will encourage customers to add more to their shopping basket.
How data can help you plan for the future
Demand planning for seasonal differences
As the time of year shifts and weather changes, the way people consume cannabis changes, which is reflected in changes in cannabis sales. Looking at historical sales data by category in Retailer Premium for the different months and seasons can help you plan ahead, allowing you to make changes to your product assortment according to their seasonality.
Planning for growth
Watching your period-over-period growth is key to understanding which direction your business is headed. Keeping an eye on year-over-year, month-over-month, and week-over-week growth will help you scale your operations at the natural pace of your business. Understanding where your growth is going will help you determine what investments to prioritize and positive period-over-period numbers will help investors see the potential of your company.
Do more with your store's data
Data literacy is a key skill when it comes to running a successful business. Retailer tools and dashboards make it easy to develop this skill and make data-driven decisions that can help maximize revenue. Track your progress, keep your store running efficiently, test new strategies, and plan for growth, all with Retailer Premium. If you want to learn more about how Retailer can help you in your business, request a demo with us today.