Looking Ahead: 2022Jan 14, 2022
Like the last two years, 2022 will probably be another 12 months of unprecedented surprises and challenges. Thankfully, cannabis industry professionals are no strangers to the unknown - the Canadian industry has existed in the midst of a pandemic for more than half of its, albeit short, life so far.
There are some things we do know, trends that aren’t likely to go away, and innovations that are expected to become much more commonplace in cannabis retail environments.
Looking forward to 2022, let’s gaze into the depths of Vetrina Group’s Crystal Ball to explore some certainties, possibilities, and what we’d love to see in the industry over the next year.
More Products than Ever Before
New and innovative products are flowing onto buy sheets on a constant basis. With more than 300 new products anticipated to come into OCS in Q1, this will stretch the limits, in some cases, of definition and categorization.
“Infused pre-rolls in Ontario are grouped with extracts and concentrates due to limitations on what can be defined as a pre-roll,” says Krista Raymer, co-Founder of the Vetrina Group. “While a consumer might not necessarily know this or care, it can complicate data collection and analysis.”
Taking an active role in breaking down categories, or noticing and removing outliers, will help to transform data into insights. As a fun exercise, you can explore segments that are dominated by a single player, with and without their data contribution. Do sales drivers for pre-rolls look the same when you count Redees out of the picture?
New Options for Curation
While burgeoning product and format options may seem daunting, it’s all the more reason to focus on your strengths and interests, and hone in on what your client base is actively seeking. Category depth provides retailers with options to build an inventory portfolio that both services your consumers’ preferences while providing new and exciting options.
Especially in Ontario, retail density creates a competitive atmosphere where differentiation and expertise are some of the only ways to compete against pure value-driven decision-making. Independent retailers have a competitive advantage in knowing their client base intimately and providing a higher level of guidance and direction in exploring new products and formats.
Above giving consumers an excellent customer service experience, these open channels of communication provide invaluable insights that can be leveraged to better engage and retain a devoted base. Inventory management can reinforce your retail vision and mission while maintaining clear evidence that you understand your customers’ preferences and values.
Getting Ready for the Next Wave
New options and formats have the opportunity to bring new consumers to the industry that may reflect a novel kind of buyer persona. Popular legacy products and brands that are transitioning into the legal space are bringing swaths of new consumers - ones that might be more skeptical about legal products, but potentially more educated about a niche or specific concepts.
This is an opportunity for budtenders to actively listen, match the client’s level of expertise, and explore what they’ve enjoyed in the legacy arena. Engaging thoughtfully with these new consumers can educate your approach to explaining and offering new products to existing clients, and bridging the gap between budtenders and the canna-curious through inventory management that both breeds familiarity and piques interest.
“New categories will nudge current consumers into expanding their consumption options and enjoy popular legacy products they have seen in the past,” says Annie Do, Director of Inventory and Assortment. “Concepts that have the potential to bring in new consumers, like low-THC options and interesting flavors, will drive approaches to 2022 - capturing that remaining legacy market share at the retail level.”
Consumers Aren’t the Only Ones Shopping Around
A global pandemic is perhaps the only reason that this issue hasn’t already been a glaring problem: finding and retaining great talent is only going to get harder. There are entire segments and services that are currently recruiting that didn’t even exist this time last year. As the industry continues to expand and diversify, employers will be challenged to compete among a plethora of other opportunities.
Whether you’re actively recruiting or already have a strong team in place, the specter of employee turnover will lurk over 2022. Both from a sunk cost, as well as an opportunity cost problem, employee turnover will show its real hand in the next year. “Employee turnover costs on average 20-30% of the employee's annual wage. It’s not just sunk costs, but opportunity costs," says Krista. "Team turnover is one of the few things that can literally halt your growth and success dead in its tracks."
This is the first in a two-part article outlining Vetrina Group's perspective on what 2022 will look like for the cannabis industry. In part two, we will be looking into merchandising with our Director of Store Experience, Elyse Ranger, and marketing considerations with Marketing and Advertising consultant, Kathryn Long.
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