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Pricing Compression: In-Store Signage

pricing compression Jun 07, 2022

Imagine you’re in the grocery store. You see two bins of bananas side by side. They look the same but are listed at two different prices. Why pay more money when there’s no explanation for the price differences?

The same theory applies to cannabis retail. Selling two products that the customer perceives as the same requires differentiation to rationalize prices.

For example, flower products may be the same strain, package size, and similar THC content but show up at very different prices.

Brand 1) 3.5g, 21.3% THC, Blueberry Dream - $22.95

Brand 2) 3.5g, 23% THC, Organic Blueberry Haze - $49.95

This is a valuable lesson on how signage can further impact pricing compression in-store. Adding differentiators like ‘organic’ vs ‘non-organic’ on signage clarifies value propositions so customers can rationalize/justify higher costs.

Customers are looking for more than the lowest prices, and they want value. When you know your customer, you can connect certain features to your customers’ personal purchasing beliefs (i.e., they only want organic, at a price they’re willing to pay).

So what can you do?


  1. Evaluate how many products you’re carrying that customers might see as the same. Differentiate them using unique signage
  2. Budtenders need sales training to help them share features/benefits of products that may appear similar
  3. Simplify digital menus to highlight product differences


  1. Familiarize yourself with products customers might see as the same. Identify one core differentiator, communicate it clearly to retailers/budtenders, and provide signage to highlight it
  2. Look at similar products from competitors. Determine how to differentiate your value story back to retailers to fit with an assortment strategy.

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