Cannabis retail is one of the fastest-growing industries in North America, but for dispensary owners, the proof is in the profits. The success of a marijuana dispensary is dependent upon a flow of customers regularly purchasing products. And these days, you can not simply rely on in-store purchases but must have an omnichannel sales strategy to succeed in challenging times like these. Even though cannabis has been deemed essential and demand for marijuana products is stronger than ever, realities like strict advertising limitations can make it difficult for your cannabis business to stand out, even in the digital sphere. But cannabis dispensary owners can make their operations more successful by employing some key marijuana dispensary profit strategies.
In this post, we describe how reducing costs, increasing average basket size per customer, avoiding inventory out-of-stocks, expanding consumer base and product portfolio, offering convenient purchase options, and increasing buying frequency can help dispensary owners maximize their profits.
1. Reduce Operational Costs
Operational costs are the first thing to be assessed when profits are not where they should be. Certain expenses like rent and utilities are a given, but several other costs within a retailer’s control should be regularly reviewed and adjusted when needed. Using your store’s cannabis POS system to pull sales information and track how products are selling is one way to manage and control your expenses. Staying up-to-date with inventory data and sales reports enables owners to identify opportunities to eliminate slow-moving inventory, freeing up money to invest in a product mix that sells better and yields higher margins. A well-designed cannabis POS reporting system streamlines inventory valuation and management and helps in decreasing operational costs.
2. Avoid Inventory Stockout
Retail owners using POS data to track store trends should also keep a watchful eye out for looming inventory stockouts. Running out of stock for a particular product means telling a customer you can’t help them, marking a missed opportunity and the potential that they may take their business elsewhere. But if you can review sales data regularly and determine well in advance when a product’s inventory could get low or sell out, you will always be prepared to take appropriate steps. To avoid inventory stockouts, you may place orders for additional stock as per demand or limit consumer purchase amounts until fresh inventory arrives.
3. Boost Average Basket Size Per Customer
Dispensaries don’t just sell products- these also serve as safe spaces for customers to learn and discuss cannabis. By looking at ways to increase basket size for every customer, your cannabis store can work towards adding value and building long-term relationships with customers while also making profits.
- Stock up on rolling papers, pipes, grinders, and other accessories. These don't just educate consumers about different methods of cannabis consumption but also offer plenty of options for upselling.
- Offer customers low-end, mid-tier and high-end price points within flowers, edibles, and other product categories. This will demonstrate that your store caters to a range of consumer budgets.
- Provide deals, specials, gift cards, and bundles. By offering promotions like Buy 3, get 1 free, gift card top-ups, or enticing discounted bundles with the right products combined, you will encourage customers to buy more and increase your sales.
- Use POS data to spot trends – like identifying which products consumers frequently purchase together - and offer recommendations in-store and online. Even a simple comment or an online store pop-up saying- "If you like X product, you may want to consider buying Y too”- can go a long way in building trust with the customer.
4. Introduce Attractive Products Regularly
Legalized cannabis means a larger segment of the population can now access cannabis for various needs, and your marijuana dispensary or retail store could be serving many more consumers looking for a variety of products. Expand your customer base by offering a range of products that address the requirements of each buyer persona in the medical and recreational markets. Edibles are making a big wave these days as many new cannabis consumers look for healthier and alternate ways of consumption. Make sure budtenders have the right skills to address the unique needs of every buyer, many of whom could be walking into a dispensary for the first time. Expanding your product portfolio and introducing new products in a timely manner are also very effective marketing strategies. Add as much detailed information about your product offerings even on your website and other online platforms to educate the target customer about their effects. Also, make it a point to market to tourists on vacation with out-of-towner promotions and branded souvenirs that could bring more footfalls to your store.
5. Level up your online presence
In today’s digital age, your website or social media channel will most likely be the first touchpoint for most of your clients. Having an eCommerce platform to sell your products online is only the first step in increasing your sales and profits- designing a social media strategy is equally crucial to connect with your target market and keep them coming back. You must make the customer buyer journey more interactive by engaging them regularly through social media, SEO-optimized website content, or email newsletters so that they remain aware of your brand and remain loyal customers. For this, it is essential to level up your online presence and provide an omnichannel customer experience because if you lose customers, you lose profits.
6. Provide Delivery and Pickup Services
As customers seek safer and convenient buying options these days, delivery and pickup services are becoming a substantial source of revenue for marijuana dispensaries. And as more states in the US are gradually awarding cannabis delivery licenses, you can’t afford to not provide such services or you risk losing customers. Such flexibility will not just be appreciated by customers but will also add to your bottom line while ensuring safe transactions. Store or curbside pickup is an easy service to provide on your website, and customers can easily schedule a time convenient for them. When starting cannabis delivery, ensure that you comply with all local rules and regulations, and have a reliable technology partner that offers delivery solutions and can quickly enable the service for you. Providing such convenient buying options will certainly help you in making more profits while selling legal marijuana.
7. Increase Customer Buying Frequency
Returning customers are crucial to the success of any retail business, and cannabis is no different. Offering promotions and implementing loyalty programs will give consumers plenty of incentives to return to your dispensary for all of their cannabis product needs. And pulling POS data to reference a customer's shopping history allows budtenders to engage with customers on a more personal level when making product suggestions. Personalized recommendations through email automation is another way to build brand recognition and loyalty. Fostering customer trust and encouraging future purchases will not only increase your cannabis dispensary’s profits in the short term but elevate the dispensary experience and ensure that customers keep coming back for more.
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