“Discounts hurt margins, but loyalty points don't,” Talk Agency founder Lisa Williams said at Benzinga's Cannabis Capital Conference on October 9.
Williams is one of several experts discussing how cannabis retailers can leverage data to not only improve margins but also enhance customer retention.
The panel, titled “Maximizing Profits: Leveraging Data for Effective Cannabis Retail Pricing and E-Commerce Strategies,” was moderated by Debra Borchardt, co-founder of Green Market Report.
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Williams said the real key to maintaining margins in cannabis retail is not lowering prices, but leveraging data to build loyalty. By offering perks like points and exclusive access to events, dispensaries can keep customers coming back.
“To build loyalty, you have to reward retention,” Williams said.
Williams' thesis was simple: build a brand that promotes loyalty rather than price-driven shopping.
Chris Walker, co-founder of Parker Analytics, furthered the conversation on how data can drive better decisions.
“It's not just about collecting data, it's about making sure you have the processes in place to use the data,” Walker said. His company provides retailers with real-time data from multiple sources, including point-of-sale systems and wholesale platforms.
What Walker wanted to make clear was that data alone won't solve the problem. Retailers need to know how to use it. “We take messy data and transform it into something operators can use to grow their businesses,” he added.
With the right data, including pricing strategy, product assortment, and sales timing, retailers can make smarter choices and adapt to rapidly changing market trends.
Jackie Gonzalez-Becerra, vice president of revenue at Weedmaps, echoed the need for retailers to take data seriously, but stressed that internal data alone is not enough.
“It's not enough to just look at sales. To fully understand what's happening in the market, you need to bring in external data, whether it's from hoodies, headsets, or BDS.” she said.
Gonzalez-Becerra explained how Weedmaps works with dispensaries to help them integrate 17 years of consumer shopping data into their operations.
This type of deep data integration can reveal market trends that retailers wouldn't otherwise know about. She noted how important it is to start planning promotions early and anticipate changes in consumer behavior as the holiday season approaches.
Fluent CEO Robert Beasley shared a real-world example of how data has helped the company stay competitive in Florida. Back in 2022, Fluent predicted a 20% compression in prices in the market, forcing them to plan ahead and reduce costs.
“We realized that to maintain our margins, we needed to improve efficiency by 20% over two years,” Beasley said.
Instead of waiting for market conditions to change and reacting too slowly, Fluent took a proactive approach. They used data to optimize everything from cultivation to product pricing, staying ahead of the curve rather than following. Beasley's message was clear. Reacting to market changes is not enough; companies need to recognize that market changes are coming.
One of the key takeaways from the panel discussion was the need for a data-driven culture in cannabis businesses. Beasley shared that many cannabis companies are still making decisions based on intuition and anecdotal evidence.
“Humans don't have the ability to make anecdotal decisions based on large data sets,” he said, noting that without the right data and tools, companies risk missing important trends. did.
In addition to this, Walker pointed out that companies need to ensure their teams have the right KPIs and data access. “If you don't give your team the tools and accountability they need, data can become overwhelming,” Walker says.
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Photo: Benzinga Cannabis Capital Conference 2024, Photo: Wendy Davis
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