Market Overview

The Role Of Cannabis Dispensaries In Attracting, Educating Consumers

The Role Of Cannabis Dispensaries In Attracting, Educating Consumers

Cannabis legalization is marching at a fast pace across the U.S., and the days of cannabis dispensaries that were nondescript buildings with closed doors and armed guards are coming to an end. 

Many dispensaries masterpieces of design, with lots of light and glass display cases featuring dozens of products.

As cannabis became mainstream in many states, companies started to compete for customers, creating a need for dispensaries to be attractive and serve an important role in the customer experience process.

At the same time, around 20% of people in states with legal weed are cannabis consumers, so there is room to grow.

As dispensaries often serve as the first point of contact between the cannabis industry and new consumers, it’s also become important to make dispensaries more friendly for people who are walking inside for the first time.

Why Consumer Education Is Important

The amount of information can be overwhelming for a new consumer, said Matthew Cutone, CEO of Seed, a company that provides in-dispensary screens that educate consumers.

“Consumers need to be prepared to travel a 'learning curve.' Unlike most retail, the cannabis industry poses some significant and unique challenges. One of these challenges is the lack of credible and consistent information that is available to consumers,” Cutone said.

In addition to providing a great customer experience, dispensaries also need to help educate consumers and “work to remove the stigma associated with cannabis,” the Seed CEO said.

Through education, dispensary customers are more likely to find the product they are looking for — and are therefore more likely to come again.

“Dispensaries that properly educate their customers build real brand loyalty and better position themselves for repeat and referral business,” Cutone said.

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How Technology Helps Increase Customer Loyalty

Dispensaries have turned to technology to make the buying process as smooth as possible. 

One key piece of technology: an easy-to-navigate point-of-sale system that enhances the customer experience and improves loyalty. 

“With the right software, you can guide your customers throughout their purchase in a way that is so frictionless, they don't even notice the technology powering it all behind the scenes,” said Kyle Sherman, the CEO of Flowhub, which produces one of the most popular POS systems in the U.S.

Modern POS systems can help identify a customer, retain their purchase history to understand what their preferences are and provide a lot of other information that can be useful to the staff to serve the customer most efficiently.

“These tools all help dispensaries better cater to each customer individually, making for a more pleasant overall retail experience that keeps them coming back for more,” Sherman said.

POS systems play a major role in customer retention through loyalty programs.

“Acquiring a new customer can cost as much a seven times more than retaining an existing one, so retention via loyalty programs can be very valuable for dispensaries,” the Flowhub CEO said. 

Design Should Not Be Overlooked

While both POS and customer education are important aspects of any dispensary, their roles pale in comparison with a dispensary’s look and feel.

The design is the first thing that a customer notices, even before walking into the shop.

Designing a dispensary can be more complex than a traditional retail store due to the many regulations and complexities of the industry that have to be taken into account.

“Cannabis is new to the community, and therefore these businesses are often regulated differently. Outside of regulations, these dispensaries often need features and design elements that cater to a less experienced clientele and a less developed supply chain,” said Megan Stone, the founder and principal of The High Road Design Studio, one of the top dispensary designers in the U.S.

The design of a dispensary affects the customer on a more subtle level than the staff, the products or the POS system.

"It is akin to the background music. You can certainly go into a store and buy things if there isn’t a song playing on the radio, but the song a retailer chooses to play can completely affect the experience they have," Stone said. 

For new customers, a dispensary's design can frame an experience and turn “an entirely new demographic onto something they might not have felt attracted to before,” Stone said.

At the same time, existing customers can look at the same product in a different way, because design can present the product in such a way that it gives it a "greater perceived value," she said. 

Related Links:

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Photo courtesy of MedMen. 


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