CANADA, May 13, 2020 (GREENENTREPRENEUR) Think of it as life before pizza delivery versus life after. Cannabis is entering that industry inflection point as you’re reading this.
A few months ago, the Brightfield Group surveyed Canadian cannabis consumers and discovered a very surprising trend: One-third of these consumers couldn’t name a cannabis brand they’d purchased, and a whopping 50 percent had no idea how much cannabis they consumed in a standard session.
This, of course, led to a lot of hand-wringing and consternation within the industry. The millions of marketing dollars spent building brand stories (Our single-origin topical is the brainchild of one of The Bachelors!) were immediately deemed worthless. The conclusions were clear: The only things that mattered were price and which shelf you could afford in the dispensary.
But this issue is nuanced. Regulations in Canada—where cannabis is federally legal—have made it extremely difficult for companies to build their brands. If you think it’s bad here, Americans wouldn’t believe the restrictions around marketing, advertising, and packaging that our northern friends have to deal with. And if you can’t build a brand, surprise, no one’s going to remember your brand.
While things are different in the U.S., there are lessons to be learned from Canada. The commodification of cannabis is well on its way, and the limitations in the U.S. market are clearly more fragmented, and, arguably, more constricting than they are up north.
If shelf space and price really were all that mattered before COVID-19, everything is about to change.
A few obvious shifts are bearing down on the industry:
- Consumers will be spending less time inside dispensaries as various forms of social distancing continue.
- Because of this, purchasing behaviors will transition online.
- Cannabis delivery services will explode, providing easier access to more consumers than ever.
The new normal
A clear digital acceleration is happening across all industries in the post-COVID-19 world—and cannabis is not immune. From Zoom meetings to virtual shopping, consumers will be forced into a new normal of experiencing even larger aspects of their day-to-day life through a screen in their houses.
Using history as a lesson, consumers may initially fight these changes, but, over time, they will come to view the new normal as convenient time-savers instead of technological frustrations.
And once a consumer gets used to a certain way of life, they don’t go back. Think of it as life before pizza delivery versus life after. Cannabis is entering that industry inflection point as you’re reading this.
So what does that all really mean? It’s time to work smarter (not harder).
Digital more important than ever
If cannabis brands didn’t matter before, it was because cannabis wasn’t forced to act like a normal industry. But as increased delivery options and social distancing converge to expand online access, cannabis will finally start to enter conventional marketing channels, which marks the shift in consumption behaviors we’ve all been waiting for.
More consumers will now be left to their own devices to choose something off the digital shelf—where there’s an unlimited amount of brands to compete against and no budtender to guide them. What are they most likely to choose: the brand they’ve heard of, or the brand they haven’t?
The basis for these new purchase decisions is going to be built primarily through a brand’s digital presence. More research will be done online. And this research won’t be about the singularity of your strain’s origin; it will be a gut check on basic elements like trustworthiness, safety, and value.
Appealing to the canna-curious
The promise of a cannabis industry reaching its $100 billion heights has always been based on the following formula: Increased legalization + cultural de-stigmatization = millions of new consumers.
While that formula has taken longer to come to fruition, industry growth is still driven primarily by new converts. And these new converts need the most handholding and still harbor the most stigma (if you’ve been in the industry for a while, it’s easy to forget that stigma is still a major barrier to the acquisition of new consumers).
Having run a cannabis media brand before, and now helping a variety of clients through The Statement Group, I’ve seen firsthand the analytics behind the new consumer. The current industry is too often answering questions the canna-curious aren’t asking. Keywords like “tinctures,” “solvents,” “extracts,” and “terpenes” are never in the top 100 results.
Far too often the cannabis industry has looked backward to decide how to move forward. Traditional cannabis marketing and branding spoke to the already converted. Far too much cannabis branding and marketing still talks past the new consumer.
New consumers have much more elemental questions and concerns. The brands that answer those questions and speak to them in the language they understand will build brand loyalty for life.
But as new consumers rely on online destinations to drive their purchase decisions, the industry needs to up its game and think proactively, relating with those canna-curious.
Have you been to most online cannabis or CBD “marketplaces”? Put yourself in the shoes of someone who doesn’t know flower from flour and try to navigate an online store on your own. It’s like trying to read those green “digital rain” screens in The Matrix. Everything looks the same, it’s overwhelming, and Morpheus isn’t here to tell us which blue or red tincture we should take.
How’s a cannabis newbie going to choose what’s right? Sure, price will always be a factor, but brand awareness will clearly be an especially large factor in the purchasing decisions for this group of new consumers.
The onus is now shifting to the brands to build trust and awareness. Yes, there are still limitations in marketing options, but the brands still have a ton of tools at their disposal to reach their consumers.
Secrets to success
Here’s a simple five-step process every cannabis brand should go through to prepare for (and own) the new cannabis market.
1. Know who your consumer really Is
The cannabis consumer runs a wide spectrum of demographics. From the recreational to the medical, knowing who your consumer really is let’s you build a highly effective marketing strategy to build deeper connections and trust.
2. Focus on your audience first
You may think of yourself as a brand, but you need to think of yourself as a media company first to compete in Cannabis 3.0. If your Instagram feed is full of “20 percent-off” coupons, you’re missing an opportunity to create community. Build the audience first… revenue will follow.
3. Develop strategic partnerships.
As a general rule, the cannabis industry has been slow to leverage strategic partnerships, yet these are great ways to exponentially grow brand reach and messaging. If you don’t know your audience, it’s hard to know who your perfect partners are — whether that’s influencers, publishers or other brands.
4. Be better at native content
A late-2019 survey by Havas found that 84 percent of consumers expect brands to make content, but 60 percent of them thought it was subpar. Posting a “What is THC?” article in the FAQ section of your site and calling it a day just doesn’t cut it.
5. Invest in innovation.
Columbia Care just launched the first virtual store to give digital shoppers the dispensary experience from the comfort of their own home. Not every brand can innovate at that level, but be aware of new and interesting ways to bring your brand to life.