The California cannabis industry is growing at a rapid rate. Because of this growth we have begun to see brands such as Moxie, Canndescent and Dosist establish themselves to become household names in the California market. With the July 1st regulations forcing all retailers to sell only pre-packed products, branding has only continued to play a bigger role as the market grows. The problem here is brands do not have the ability to track ROI on their marketing dollars. Why? Because they cannot sell directly to the end consumer without a retail license.
Brands Are Leading Consumer Purchasing Decisions
We sat down with our friends at WebJoint, an all in one software for cannabis retailers. They began to break down some interesting metrics from their point of sale platform that show some interesting trends happening in the cannabis space. After looking at some of the data, WebJoint found that over the last 4 years, consumers have been spending more money per receipt and purchasing products in higher quantities than ever before. But why? Because the brands that have established themselves over the last couple of years has created an influx of quality assured products that are typically sold at a higher cost and purchased in higher quantity.
What Does This Mean For Retail?
It is an interesting scenario. We have been so accustomed to dispensaries and delivery services because this has ALWAYS been the ONLY source where we could purchase cannabis at a retail level. Because cannabis is so new we always think of which dispensary to check out or purchase from. But there is a trend happening here that not too many people are aware of. Brands are leading consumers purchasing decisions and a majority of the market is beginning to care more about the brands they purchase then which dispensary they are purchasing from. “Ultimately we see retailers becoming the equivalent to liquor stores in the next 5-10 years. As brands continue to establish themselves in the market it wont matter how beautiful or gorgeous the buildout of a dispensary is as long as they have the branded products that people want” says Christopher Dell’Olio, CEO and co-founder of WebJoint.
Cannabis retail locations have already began selling real estate at their brick-and-mortar locations. They are doing this because the brands are demanding for a way to get their product in front of the eyes of more consumers. So now, at a dispensary, it isn’t rare to find custom branded shelves and display cases for ONE particular brand. The brands typically pay for that real estate inside a dispensary and this is how they gain marketshare. But how does a brand track the ROI on these marketing decisions? How do you know if that display case is helping you generate more sales at that dispensary? Or how do you know, that even after obtaining that real estate inside a dispensary that the budtender is knowledgable enough on your product to help a consumer make a decision to purchase? What if they recommend another product over yours? There is a lot that is out of the brands control in this sense.
Realizing A Cannabis Brands Marketing Efforts
With the cannabis industry beginning to trend on branded products we have begun seeing a lot more marketing campaigns from the brands themselves. We’ve seen everything from billboards on the 405 freeway, influencer marketing and more. But this is an interesting problems arises. BRANDS CANNOT TRACK THEIR ROI! So how does a cannabis brand realize their efforts. One quick example of what we’re beginning to see in the industry is brands are putting up advertisements for their product and then adding 4 or 5 logos/addresses to retailers where you can find the product.
Nike isn’t going to make a commercial about their shoes and then tell the consumer to go find their product at a local Foot Locker. They are going to tell the consumer to head to nike.com and place an order directly. Right? This allows Nike to realize their marketing efforts, track the ROI on their commercial and understand the metrics a lot better. This is something that a cannabis brand, in today’s industry, cannot do. Because brands typically carry or white-label from a cannabis manufacturer license, they are not legally allowed to sell their product to the consumer. Therefore brands do not have the ability of taking an order online. But if they could… then they would be able to track their ROI.
Solving the Problem With “Brand To Consumer Technology”
With brands having a massive following and consumer relationship, but no way of selling direct to the consumer creates a big headache. Consumers will likely spend hours looking for a nearby retailer that carries the brand they want. They will even go to the lengths of asking their brands support team where a nearby retailer may be located. But more than that, consumers typically want their branded products delivered to their door, because they already understand the quality and consistency therefore they have no desire to travel to a brick-and-mortar location.
There is a new piece of technology hitting the cannabis space called “brand to consumer” technology. The main brand to consumer technology platform is currently being spearheaded by WebJoint, one of California’s leading software providers in the cannabis space. With a majority of cannabis deliveries already using the WebJoint point of sale opens the door for the company to solve a much larger problem for cannabis brands.
Ultimately WebJoint’s cannabis brand software will allow brands to connect to the delivery network on WebJoint. Once brands have connected with retailers on the WebJoint network, the brand can now accept orders online and on their mobile app, allowing consumers to have the experience of ordering directly from the brand they love. Once a consumer orders from a brands platform, WebJoints software will automatically find a nearby delivery service that can fulfill the order. With this solution brands can now track ROI and get insight how many orders they’ve sent to retailers on the WebJoint network.
So the next time a cannabis brand has the opportunity to put up a billboard on the 405 freeway. They can strategically use WebJoint to understand how much inventory is within a 5-10 mile radius before following through with the marketing campaign. Then instead of the brand adding 4-5 logos and addresses to retailers who carry their product and say “Go to one of these dispensaries to find us” they can simply say “Go to our website www.xyzbrand.com and order today”. Now all the orders coming through this platform are tracked and as a brand, you can realize marketing efforts and get a leg up on the competition.
For more information on this brand to consumer software check out WebJoint and setup a demo if interested in learning more.