The good news? According to the most recent Canadian Cannabis Survey from 2022, 61 percent of consumers now routinely buy from licensed stores. The bad news? Oversupply and a post-COVID economy racked with inflation are making it difficult for some stores to keep their head above water. As a cannabis retailer, how do you survive the current market challenges? Don’t get bogged down by the negative news in the industry at large. Out of all the cannabis retail tips we offer, the most important is to focus on the factors under your control, namely what happens inside your store.
A Closer Look at the Canadian Cannabis Market
There are a few interrelated issues all striking Canadian cannabis at once. First is the issue of oversupply. Technically, Canadian producers have been grappling with this issue since as early as 2019, just a year after legalisation. But, after four years of legal weed, the country is literally awash in surplus flower.
This has led to the second issue, falling prices. Global News reported that prices have fallen as low as $3.00 per gram in some places. The Canadian Cannabis Spot Index put the average price per gram at $5.10 on January 13th, 2022.
Finally, producers and retailers alike are increasingly frustrated by the high rate of taxation. There is the excise tax, the Health Canada regulatory fee, the provincial wholesale markup, and finally the provincial sales tax. With the excise tax alone costing $1 per gram (or 10 percent, whichever is greater), it all adds up to bring down the entire supply chain.
All of these compounding factors have trickled down to directly impact the point of sale. As a cannabis store facing price wars and stiff competition, how do you stay afloat?
Cannabis Retail Tip #1: Focus on Your In-Store Experience
You can’t fight national inflation rates, and oversupply is well beyond your pay grade — but you can focus on what goes on inside your store. Think about ways you can improve the in-store experience for your ideal customer. Consider what your customers care about most, and then work to optimise for that goal.
For example, many customers are most concerned about the speed and efficiency of the transaction. Above all else, they value short lines and a smooth checkout experience.
The core of the TechPOS solution is the Point-of-Sale. Our dashboard has an intuitive UI to facilitate rapid checkout. It’s easy to navigate and, importantly, combo deals and other sales are automatically processed. That means no fussing at the till when your customer just wants to get in and get out.
Our integrated Express Checkout also helps reduce time at the till. First, it frees up your budtenders to help customers with questions and order filling. Second, it reduces the time customers spend in line by opening up a new POS — all without adding more staff.
Cannabis Retail Tip #2: Add New Sales Channels
Not every customer prefers to shop in the same way, and you should offer several channels to serve a range of shopping habits. In cannabis, that means a multi-channel approach with conventional in-store shopping through a budtender, an Express Checkout kiosk, as well as eCommerce and delivery options where those are allowed.
As an omnichannel solution, our TechPOS package ensures you can serve your customers in a way that works best for them. For example, our eCommerce solution is a seamless online shopping experience with an always-up-to-date inventory.
Plus, no matter where you are in Canada, we ensure your online store works within the local provincial guidelines, including Click & Collect, Reserve Online & Pay in Store (ROPIS), Pay Online & Pickup in Store (POPIS), or Pay Online & Delivery at Home (PODAH).
Opening up more sales channels is a proven strategy in other industries. According to Scaling Up, “Companies that get multichannel retailing right can enjoy larger profit margins and yearly revenue growth more than 100 basis points higher than companies that don’t.”
By simply giving your customers the choice to shop in-store or online, for pick up or delivery, you are giving your store that competitive edge it so desperately needs to stay ahead.
Cannabis Retail Tip #3: Increase Average Transaction Value and Items Per Cart
Just because you are a cannabis store doesn’t mean you can’t adopt the same business strategies as more traditional markets. Two of the main ways conventional retailers increase sales are by focusing on boosting the average transaction per customer and increasing the number of items per basket.
There are a million different ways to approach these goals, but one option is through in-store digital signage. TechPOS provides a smart digital signage system that not only drives sales by showcasing popular products but also always stays up to date as it’s automatically connected with inventory levels.
Why go digital? Compared with static signage, digital displays capture consumer attention. According to one statistic, that may be 400 percent more views than a basic printed sign. What’s more, flashy rotating digital menus could bump your average transaction by as much as 29.5 percent. When the average attention span is under three seconds, a digital sign can ensure you keep your customers engaged, even if they are just standing in line.
Another tactic is to highlight new or interesting products on a rotating daily deals menu. Much like a restaurant may offer half-price appies on Tuesdays or a Caesar special on Sundays, why not strategically upsell customers with daily deals? Then use digital signage to display these discounts, whether it’s Pre-roll Fridays or Terpene Tuesdays.
TechPOS Is Always in Your Corner
Nobody will deny that the Canadian cannabis industry is experiencing a few growing pains. But this is a natural evolution of a brand new market. Eventually, the issues related to oversupply and price wars will begin to settle. With the upcoming federal review of the Cannabis Act, we are likely to see improvements in taxation as well.
The TechPOS all-in-one system is designed to help you weather the storm now, and through whatever the future may bring. Our POS system, digital signage, eCommerce solutions, and other integrations allow you to optimise in-store operations so that you remain highly competitive. We are always here to help with more cannabis retail tips.
