In traditional consumer packaged goods markets, the balance between retailers and manufacturers is dynamic and…
If there is one thing I have learned in the past 7 years of cannabis business pursuit is that the industry remains incredibly immature. Not the people mind you. Most people I’ve met in the cannabis world are smart, sober and hard working professionals doing their best to navigate through a system with nearly 40 different regulatory regimes and laws across the country, with the feds always threatening some level or constraint that is about to be added to operators’ already full plate.
What is driving operational tools immaturity?
I am talking about immaturity from the branding practices, operational processes and digital toolsets that other businesses doing millions of dollars in annual sales (or 10s or 100s of millions) have regular access to. Cannabis operators continue to suffer with as yet hardened tools like meaningful brand strategies, customer management communications tools and best-in-class supply chain practices.
Why is this? Blame the feds. Why isn’t IBM or Micros building POS systems for cannabis retailers? Why isn’t Fivestars or Belly producing a cannabis specific retail loyalty program? Why does Mailchimp close down accounts in cannabis with no warning? Same with Instagram. And think of all the ad money being foregone by Facebook and Google, neither of whom accept ad money from legal cannabis operators.
This situation has enabled a quasi-ecosystem to develop out of a raft of startups looking to provide consumer experience business consultation and software solutions selected and integrated specifically for cannabis operators. But there are, for instance, over 40 Point of Sale Systems approved for integration with State sanctioned seed to sale tracking platforms, with widely varying sophistication, maturity and operational value. For retailers alone, there are (for instance) multiple digital live menu systems that integrate with most leading cannabis dispensary POS systems. There are a number of customer messaging apps tuned to be compliant with each state’s various rules regarding customer data collection and usage for marketing purposes that work with varying ease with other systems. There are different platforms vying for primacy in the wholesale marketplace for buyers and sellers.
Where should a new dispensary owner or manager begin?
In our experience, all newly licensed cannabis retailers will need at least three things to get started compliantly and successfully
- A consumer-friendly website with strong mobile user experience.
- A cannabis friendly Point of Sale system that integrates as seamlessly and easily with a state’s chosen Seed-to-Sale tracking platform (e.g. METRC or BiotrackTHC)
- A live menuing system to allow you to promote your products simply and easily on your website, on your instore kiosk and consumer-facing monitors, and in distributed environments like partner websites.
Yet just standing up these three integration-oriented systems is incredibly complicated, not the least because of the over 40 POS systems alone in the cannabis marketplace today.
While spending 2 years recently embedded in a vertically integrated cannabis operation in Western Massachusetts, I was the lead on sourcing, evaluating and integrating a variety of software as a service platforms that would add value to this operator’s customer experience as well as the dispensary’s operations efficiency. My experience integrating a variety of software solutions into a seamless marketing eco-system for the retail team included:
- Building a WordPress website from the ground up, ready to embed key services directly into the customer experience, and also offering as strong a mobile shopping experience as on desktop screens. Insight: Most dispensaries see over 80% of there web traffic coming to them on mobile devices,
- Integrating existing POS system (Leaf Logix) with key partner solutions.
- Evaluating dozens of POS systems as a replacement for LeafLogix (which didn’t present the ideal cashier experience). Insight: The dispensary chose NOT to switch away from Leaf Logix, not because of its superior performance, features or benefits, but because switching would have created a training bottleneck that the 7 day a week retailer could not risk swapping.
- Sourcing, recommending and installing a best-in-class live menuing system. (Dutchie)
- Sourcing and maintaining 2 separate customer communications platforms (Sprout and SpringBig) allowing us to communicate in a personalized manner based on individual user data and shopping behavior over time
- Identifying and integrating the best custom service platform (Intercom) for direct real time digital communications with website visitors, based on dispensary protocols for consumer communications.
- Integrated third party data aggregators including BDSA and HeadSet to allow the most robust inventory management and marketplace data on SKU level performance and real time customer behavior driving insight into product merchandising and insight into new product development.
- Evaluated various B2B/wholesale marketplace platforms for use by both buyers and sellers of packaged products from partner vendors (Leaf.Trade, LeafLink, Outspoke)
- Networked dispensary-selected ID Scanning solution to guarantee compliance with shopper age, as well as extracting drivers license data for integration into customer profile data.
- Evaluated third party providers of gift card and “Cashless” payment solutions that would integrate into existing POS
As you can tell, operating a cannabis retailer’s digital infrastructure can be a truly overwhelming process of discovery, evaluation, selection, and integration into one’s retail operation.
So how does all this help the newly licensed operator get started?
A few key points to consider:
- What staff are you committed to hiring to provide or oversee this sort of set up and integration of these digital platforms? Who is in charge of your customer data strategy?
- How will you evaluate your choices with so many options, and then integrate them seamlessly without disrupting operations?
- How will you design your digital customer experience to include all of these options for optimization, and then make sure it’s 100% compliant with state regulations?