Ten years ago, every regulated dispensary seemed to subscribe to the same set of savings- a ‘Munchie Monday’, a ‘Wax Wednesday’, maybe the occasional ‘Shatter-day’ if they were feeling spicy. In today’s market some of these tried-and-true deal structures still exist, but many retailers in competitive markets have had to find ways to be more enticing than ever. Dispensaries have had to go from a baseline percentage discount (usually 10% – 15%) off a specific SKU or category in a day to rotating multiple deals per day across all categories. Customers have gotten accustomed to deeper discounts any day of the week they decide to dip into a dispensary. Production facilities are pressured more than ever to sweeten their sales with promotional products for BOGO deals and flash sales.
The evolution of deals that dispensaries are dealing with is stretching everyone thin.
With respect of the fear of racing to the bottom balanced with the need to be competitive and compelling to customers, how can a dispensary run effective deals?
Leverage In-House When Possible
This is yet another of many touchpoints where vertically integrated operators has a leg up on their competition. Instead of rotating different deals every day for core categories like pre-rolls, single grams, 1/8ths, or half gram vape cartridges, offer an everyday deal for your in-house iterations of those SKUs. Instead of finding pre-rolls at a price cut, offer your own in-house pre-rolls for a value price every day. It can also lead your dispensary to be marketed as something along the lines of ‘home of the $5 full gram pre-roll’. Being vertically integrated may not help you cover all your categories but for whatever products are made in-house, they should be housed with the best deals only at your dispensary.
Befriend Your Brand Ambassadors
While you may not be as competitive in terms of buying power with your vendors, you may be able to be competitive when it comes to being besties. Be sure to book out brand ambassadors and invest in these relationships. Focus on building business development relationships with your vendors and being one of their favorite go-to retailers. By showing you are proactive in their success, they will often return the favor.
Go past just booking a pop-up and greeting them at the door. Engage your brand ambassadors and see what they have coming up in their marketing calendar. Offer to host them for milestones like their brand anniversary or for new releases. It can help to do quarterly meetings just to align on upcoming events and sales that you can collaborate on.
This all leads to continued pop-ups and opportunities to run deals with your preferred vendors. Pop-ups come with free swag and education for customers and often discounted deals. Some vendors will even cover the cost of the deal, so your dispensary doesn’t see an impact on margin for sales honoring pop-up pricing. The investment and time value can truly pay off when you see what these brands can do with your partnership.
Make Gift Giving a (Corporate) Love Language
One tried and true method we see in terms of deals is to gift something for free with a minimum or specific SKU purchase. It feels great to buy something you needed to get anyway and get something as a bonus on top of it. This spans all kinds of retailers- from your local corner store doing BOGO candy bars to department and specialty stores like Macy’s or Ulta providing gifts for specific purchases or products sold. With cannabis, that’s extremely tricky. Due to compliance, nothing is truly ‘free’- anything medicated must be purchased for at least a penny. Due to the increased pressure on production, it is difficult to request and receive products for a penny to utilize as promotional items. If you as a retailer opt to eat the cost of promotional items, your already razor-thin margins will take a huge hit that are difficult to balance out.
While gifting medicated products is a challenge, unmedicated products have far fewer blockers.
Many dispensaries who also have accessories may have corporate accounts with glass vendors or other people they work with for unmedicated items. Work with your vendor for some bulk pricing to get extra items to utilize for gifting. Low tier gifting can include a complimentary lighter with purchase of a half-ounce or more, high tier gifting can include a free small bong for any $200+ purchases. While you may not be able to compete with BOGO 1/8ths, you can step up your unmedicated gifting game. These kinds of promotions don’t have to be done every day, but they can certainly move the needle when you need the push.
No matter how you seal the deal, you must be mindful of margin. Hopefully these hints help your dispensary dole out better deals all year round.
