Cannabis Dispensaries are Essential Businesses: New Ways to Connect with Customers
This is the second blog of our new series discussing the effects of COVID-19 on the cannabis industry. Recently, we shared insights on the importance of the essential business designation. In this blog, we’ll look at the new ways that cannabis dispensaries must operate to deliver products to customers while keeping them and their customers safe.
Historically, most cannabis dispensaries have sold and delivered products through in-person and in-store interactions. Budtenders are trained to listen to customers, learn their needs, and discuss the most suitable products. After the products are presented, the customers ultimately decide on what they want and then make their purchases. However, with the COVID-19 pandemic and the resulting social distancing restrictions put in place in most states, this “old way” of doing business is no longer possible.
As an essential business, cannabis dispensaries are adapting, adjusting their operations so they can safely deliver products in ways compliant with CDC guidelines for social distancing. Over the past few weeks, we have seen what some dispensaries are doing to keep their customers and employees safe. Business Intelligence from Akerna, MJ Freeway’s parent company, shows many cannabis business owners have shifted their approach to fulfillment. From March 11 to 31, we saw a:
- 355% increase in online ordering
- 280% increase in delivery sales
- 118% increase in pickup orders
Connecting With Customers In A Social Distancing World
As with any industry during times of great challenge, some cannabis businesses will struggle to adapt to the changing demands of their customers within the boundaries set by COVID-19 related-orders. One way to mitigate these growing pains is to embrace new methods of staying connected with and selling to customers.
As shared by Danny Gold, CEO of Zoltrain, an online learning and training platform for the cannabis industry, “Until recently, 90% of sales were driven by budtender recommendations, and up to a few weeks ago, this was an in-person business. Digital conversion is being accelerated. Stores will continue to push with online order and delivery, and legislation in more states will probably allow for delivery in more locations.”
A valued customer of MJ Freeway, The Apothecarium Dispensary, which has three locations in San Francisco and one dispensary in Las Vegas, is a prime example of a company shifting to this new way of doing business.
According to Sara Moser, the company’s Marketing Director for California, “Business has to be about online sales with pickup and delivery. As a retailer that has been differentiated by our product knowledge, in-person consultations, and technology. We are looking at ways to translate that into online channels – bundling and promotions around themes (e.g., calm or sleep), better merchandising, and educational offerings. We see this is especially important for connecting with and educating new customers who have limited knowledge about different offerings, brands, and uses. This is particularly true for some of the more innovative products that have been developed over the past year.”
How Technology Can Help Cannabis Businesses Keep Up With The Changing Landscape
Many states have created regulatory provisions for curbside pickup or have fast-tracked licensing for delivery. Other challenges within the industry still exist, such as an individual’s exposure to frequently touched cash for payment and the increased risk of theft during exchanges made outside the confines of the dispensary.
MJ Platform and our partners like Jane and Hypur are working together to address these issues and create solutions to improve the safety of employees and customers. Jane and Hypur enable cannabis business owners to use technology to manage cash while meeting regulatory requirements seamlessly. We are also working with providers like I Heart Jane to address the issues around curbside pick up, payment, and alternative forms of ordering.
For dispensaries interested in streamlining their delivery services, MJ Platform has an out-of-the-box delivery solution that enables businesses to easily track inventory, optimize delivery routes, set automated reminders for re-orders, and review past sales records and purchase history in real-time from any place or any device.
As an essential business, cannabis dispensaries are embracing this new way of connecting with and selling to customers. The creative and collaborative use of technology is what will enable this shift. Only then can business owners improve engagement with customers, create brand loyalty, generate more revenue and thrive during these challenging times.
