This most recent 420 broke regulated cannabis sales records with a historic single-day total of over $178 million. Along with the data we discussed previously, we did see one particularly interesting data point regarding coupons. Day to day, we typically see roughly 22.9% of all regulated cannabis sales include a coupon, but on 420, we saw that the national coupon use shot up to 32.2%. Coupons are no stranger to dispensaries; one out of every five dispensary transactions uses one. 420 is a sales juggernaut in the cannabis world, so we naturally see a spike in coupon use, but what does that story tell us?
Cannabis promotional items may outweigh discounts.
Nearly all dispensaries did something for 420 and predominantly relied on promotions to entice consumers to engage in holiday shopping. We anticipated the coupon or discount use to be higher; however, this number does not capture the number of transactions that included a promotional item. This shows a trend of cannabis producers moving toward purposefully creating sales opportunities using products as an incentive rather than a flat percent or dollar discount.
This may be an effort to support other brands within a producer’s catalog- we’ve seen success in the past with category-crossing promotions. In this instance, it may be to buy an 1/8th of flower and then get a 100MG pack of gummies for a penny. Both the flower and the gummies come from the same manufacturer, and they get the opportunity to put their product in the hands of someone who may not have opted to try it prior to getting it as a 420 freebie. We also naturally see this concept within the same category with BOGO sales or buy a 100MG gummy pack, get a 50MG promotional pack for a penny. We previously discussed the psychological approach to couponing on our blog and are now seeing the practical use of the BOGO sale on 420. Anecdotally, nearly all 420 transactions include some offer, whether a promotional product offer or a coupon.
Another offer we saw on 420 that was outside of the coupon or promotional offers was dispensaries doing double or even triple loyalty points on 420 spend. While this approach doesn’t immediately impact margin, it widely encourages return visits and continued loyalty. This method eventually pays off for the customer, but the immediate push for a discount on medicated product is lost. We most commonly saw these loyalty booster deals as a doorbuster or only for limited hours.
Across these methods of promotions for guests, we tend to see a mix of offers. Many dispensaries did employ buy one or two, get one free (well, technically for a penny) as well as specific SKUs at a discount and even some loyalty bonuses. Whatever the promo mix was for each store, it clearly worked- this year’s 420 beat the highest single-day sales record in regulated history.
While, as a whole, this does show that a variety of promos does work and engage shoppers, on a more micro scale, this means a few things for dispensary operators. On the street level, this shows that shoppers will come to expect different kinds of deals, and dispensaries have to find a way to continue bringing guests in the doors. As an operator, the data will lead the charge in optimizing and capitalizing on the 420 sales well after the holiday.
Following 420 is a great time to do a full retrospective on what marketing and operational measures were taken, what worked, and what didn’t. Just as we dig into the data nationally, operators need to dig into the data locally. We know that flower sales comprised nearly half of all products sold on 420, but did any cultivators lead the pack? Were there strains that sold through faster than others? Was there a flavor of gummy that lead the pack? This data is particularly important as it shows more than what your regulars buy- it’s what general consumers want to buy. 420 brings both the cannoisseurs and the cannacurious together to shop, which gives operators a unique insight into what people across the board are consuming. For this one day, it’s not just regulars for their daily eighth or strain hunters only interested in one SKU- it’s everyone in your area who consumes. Don’t take this data lightly- use it to really dive into what your guests want, what they respond to, and what kind of promotions work well. We have some specific reports to run in addition to your regular sell-through reports right here.
It has been a great 420 and we look forward to many, many, more to come (with the right data, of course). If your software left you hanging on 420, know we won’t.
MJ Platform has been in the cannabis industry since 2010 and developed our software with cannabis compliance at the forefront. Our user-friendly but business-savvy software will keep those registers ringing all year round. For a free live demo of how our reporting and vertically integrated software can help you grow, reach out to us here.
