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Unlocking Success with the Path to Purchase: Insights into Cannabis Consumer Behaviour

Unlocking Success with the Path to Purchase: Insights into Cannabis Consumer Behaviour

pricing compression sales Jun 05, 2023

The Evolving Cannabis Consumer

Do Cannabis customers shop differently than other types of shoppers? Is there a change in behaviour when they enter a Cannabis retail location?

The answer may surprise you, but no, cannabis customers do not shop differently than other types of shoppers. However, many retailers and brands, just like you, might have a feeling that there's something different about them. According to a report by Deloitte, the modern consumer is influenced by factors such as growing economic pressure and an abundance of choices, and this holds particularly true in the cannabis industry.

Competitive and Economic Pressures Consumers Feel

Before diving into actions, it is good to know a little more about what your consumer is experiencing. What do we mean by economic pressure and an abundance of choices? Some may seem obvious, but these cannot be ignored when understanding the modern cannabis consumer.

Let’s get down to brass tacks and go over the pressures and influences they feel:

Competitive Options

  1. Different Brands and Product Varieties: Consumers have a wide selection of cannabis brands, offering unique products, strains, and formulations to cater to individual preferences.
  2. Local Dispensaries and Online Platforms: Consumers can choose between local dispensaries and online platforms, providing convenience and access to a diverse range of products.

Economic Pressures

  1. Pricing and Affordability: Consumers consider price and value when purchasing cannabis products, and they are seeking affordable options. With the rising cost of living and inflation, retailers and brands are at risk of experiencing pricing compression in order to remain competitive.
  2. Market Saturation and Competition: As the industry gets bigger, it becomes harder for brands to get noticed because there are so many of them. They have to do something different or special to get people's attention.

The Modern Consumer Landscape

Listed out like this it is easy to see how the consumer and our experience of them shopping has changed, including cannabis consumers.

Now that we have a better understanding, we can see why cannabis consumers (and all consumers) are becoming less loyal and more unpredictable in their shopping behaviour.

So, what exactly does this mean? Let's break it down in simpler terms:

  1. Less Time, More Conscientious: Cannabis consumers, like any other modern consumer, are often pressed for time. However, they are also more mindful and thoughtful about their purchasing decisions. They want to read reviews, order online, and know product details quickly.
  2. Experiences Over Products: Cannabis customers prioritize the overall experience rather than just the products themselves. Retailers and brands cannot rely solely on pricing to attract consumers, especially when the same product may be available with a competitor. To stand out, retailers and brands must go beyond the basics of a shopping experience and create memorable, engaging encounters that leave a lasting impression on their customers.

đź”— We wrote a blog post about merchandising, including examples of a retail store that we think is going above and beyond. Take a look if you're interested. READ BLOG.

  1. Post-Pandemic Shopping: It's important to note that not everyone has rushed back to physical stores after the pandemic. Some consumers may still prefer online shopping.

The Complex Path to Purchase

Now, you might wonder why all this information is important. Well, it's because the path to purchase, which refers to the journey a customer takes from being a prospect to becoming a customer, has become longer and more complex.

There are now more touchpoints and interactions involved in the decision-making process. To illustrate this, let's take a look at three different types of cannabis customers:

Customer A - The Savvy Shopper

This customer uses platforms like Weedmaps to find cannabis products at low prices. Their path to purchase involves searching for the best deals and discounts.

Customer B - The Researcher

This customer relies on recommendations from online communities like Reddit. They visit the websites of specific cannabis brands to gather information and then search for local retailers that offer the recommended products.

Customer C - The Curious Explorer

This customer notices a roadside billboard advertising a cannabis retailer and becomes intrigued to check out their offerings. Their path to purchase is influenced by outdoor advertising.

By tracking the path to purchase of different customers, both historically and in detail, retailers and brands can gain valuable insights. There is a reason you get asked by shops or brands “how did you find us”. They are also figuring out what your path was!

These insights help them stay competitive and understand how to fine-tune their promotions and discount strategies. It's crucial to realize that the influence on a customer's perception of purchase doesn't just occur in-store but also before, during, and after their visit.

Tips for Brands and Retailers

If a retailer or brand focuses only on price as the core feature and benefit, they risk relying too heavily on discounts, which can negatively impact their profit and loss statement.

đź”— Or get them caught in a pricing compression trap, read more about this on our blog and see if your discounting putting you in this trap.

In competitive markets, we are seeing discount percentages exceeding 20%. But this isn’t a shock if you are starting your customer path with the price.

How to focus on Path to Purchase over Discounting:

For Retailers:

  • Know Your Touchpoints: Map them out and track them regularly. Use this to gain a better understanding of your customers so you can guide them down the purchasing funnel.
  • Ask for Customer Insights: Engage with customers and ask them how they found your store and what motivated them to visit. These insights can reveal early-funnel behaviours and patterns that drive sales.

For Brands:

  • Provide Clear Information: Ensure that customers have all the necessary information about your products. This can shorten the time from customer intent to action and maximize the return on investment of your marketing investments.

  • Have clear and concise brand messaging:

    This is rooted in knowing your audience demographics and creating with them in mind. Apply this to all customer-facing touchpoints, making it easy for them to understand you and the products made especially for them.

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