Beyond Demographics: Cannabis Consumer Segmentation Best Practices and Tips

When it comes to cannabis retail marketing, dispensary owners can apply many of the same proven principles and strategies employed in traditional retail. 

One great example is market segmentation — a key practice used by retailers to craft targeted and effective marketing campaigns. Let’s take a closer look at segmentation and how cannabis retailers can leverage it in their marketing efforts.

Segmentation is the practice of separating your target market into distinct groups based on certain attributes or characteristics. The goal is to create identifiable subsets within a given market. Segmentation may be based on demographics, like age, gender, or income; psychographics, such as personality, values, and interests; or other criteria, like geography or shared behaviors.

So, why is segmentation so important for retailers? By identifying different segments in your market, you can use their commonalities — including shopping habits, lifestyles, and consumption preferences — to craft and deliver tailored messages and promotions that will resonate more deeply with them.

Segmentation Tips and Best Practices

Use the following tips and best practices to get the most from segmentation in your cannabis retail marketing strategy:

1. Start with Hard Data

To create truly effective segmented customer lists, guesswork and intuition won’t cut it. Spend time researching the demographics of your area and, if you’re already established, your current clientele; a dispensary POS system with robust reporting features will help you identify shopping patterns and trends, and potential customer segments will rise to the surface.

2. Get a Deeper Perspective

Once you’ve sketched out your core segments, get to know them as deeply as you can. Approximately how old are they? What are their interests? Their backgrounds? Their needs? Crafting detailed buyer personas can help you and your team create hyper-targeted messages that hit customer pain points on the bullseye.

3. Analyze and Iterate

Follow up every promotion, campaign, and offer with an after-action review. How did your segments respond? What takeaways can you apply next time for an even better return? Every initiative provides an opportunity to further refine your buyer personas and segmentation strategy.

3 Segmentation Examples for Cannabis Retailers

Now let’s look at some cannabis-specific market segmentation examples using three common consumer groups: seniors, health and fitness enthusiasts, and cannabis newcomers.

1. Senior Citizens

One group that has benefited greatly from cannabis is seniors. Despite decades of anti-cannabis propaganda, many senior citizens are converting to cannabis as an alternative to pharmaceuticals. As one of the most heavily prescribed populations, seniors in legal cannabis markets are finding that cannabis provides equal or even greater symptom relief than their prescriptions, without the unpleasant side effects often associated with pharmaceuticals.

• Consumption methods: Seniors turning to cannabis for symptom relief often prefer topical applications, edibles, and vaporizers over smoking, as it can irritate existing respiratory conditions.
• Shopping habits: Seniors tend to be daytime shoppers, so you’ll likely see most of your senior customers within the first few hours of the day. Many senior living centers are coordinating regular field trips to dispensaries for their residents — as a cannabis retail owner, this could be a potential opportunity for community outreach and cannabis education.
• Consumption habits: Many seniors looking for mild symptom relief without the psychoactive effect prefer high CBD/low THC or one-to-one THC/CBD solutions for daytime consumption. For relief from more intense symptoms and/or sleep aid, heavier indica solutions through the day and before bed may be more effective.

2. Health and Fitness Enthusiasts

Another fast-growing cannabis segment is the active/wellness category. Athletes, fitness fans, and wellness enthusiasts of all stripes are incorporating cannabis into their training regimens as an exercise enhancer, recovery aid, and all-around health supplement. CBD solutions can help fight inflammation and soreness, and some athletes have even touted the performance-enhancing benefits of THC, particularly when it comes to getting “in the zone” mentally.

• Consumption methods: Health-conscious consumers may be averse to smoking flower, and prefer to consume via vaporizer, edible/oral, and topical for targeted inflammation relief.
• Shopping habits: This population is likely to be well-informed upon coming into the dispensary, having done plenty of research on their own. Because of their active and busy lifestyle, they may even prefer to order ahead and utilize the express checkout to expedite the purchasing process.
• Consumption habits: Consumption categories for this group could include pre-workout, post-workout, and rest/recovery. Microdosing throughout the day is also becoming increasingly popular among cannabis health and wellness consumers.

3. Cannabis Newcomers

Of course, the cannabis newcomer category is one that continues to increase as legalization and education spreads. This group includes individuals of all ages, backgrounds, and interests who share one very important attribute: a curiosity for cannabis. Maybe they want an alternative to alcohol to help them unwind after a long day, or perhaps they’re looking to spark some inner creativity — whatever the reasoning, cannabis newbies are coming to dispensaries seeking something to help them achieve their goals.

• Consumption methods: Depending on their reasons for trying cannabis, newcomers may be open to a variety of consumption methods. They also may not be ready to invest a significant amount in consumption devices and hardware, so pre-rolls, edibles, and tinctures are good starting points.
• Shopping habits: Expect newbies to take their time on your sales floor — and be prepared to answer a lot of questions. Though they may have done some research on their own, this group will be very open to suggestions from your expert budtenders. You’re likely to see these shoppers in the evenings and on weekends, when they can really peruse your offerings.
• Consumption habits: This group is probably not ready to consume during the day, but rather looking to experiment in the evenings and on weekends.

Easily Keep Track of Consumer Data for Segmentation Research and Strategy

As you begin to identify your dispensary’s core segments, you can use your customers’ purchase histories to develop strategic promotions and offers based on real-world data. And by employing the right cannabis retail technology, you’ll be able to easily track and monitor that valuable data.

To see exactly how Cova can help you streamline your dispensary and develop an effective market segmentation strategy, book a free demo today.