What could be more dope than a panel of fierce females discussing the future of cannabis dispensaries at SXSW? Um, not much!
Ashley Picillo, Founder and CEO of Point Seven Group moderated an informative and lively debate between Anne Forkutza, VP of Strategy for Cova, Chelsea Bernardo, Senior Creative Designer for Point Seven Group and Megan Stone, Owner of High Road Design Studio, during last month’s inaugural Cannabusiness programming track at SXSW in Austin, TX. From design and sustainability to the customer experience, the women-led panel explored how dispensary owners must identify new ways to differentiate themselves in the increasingly competitive retail environment.
Here are the highlights from the seven questions discussed during the one-hour session.
Question 1 – Describe your current client base and the ways in which your clients’ needs have changed as it pertains to the industry’s growth.
MS: I actually don’t have a typical client. My next client is always different from my last, due to my work with both recreational and medical dispensaries all over the country as well as in Canada. Each business is different. Regardless of these differences, my dispensary clients are all typically concerned about a few key things. They want to stay relevant and profitable in an increasingly competitive marketplace. They also are focused on finding ways to differentiate themselves and provide a memorable experience while also fulfilling promises of a quality product and great customer service. And they are always looking to the future. For some that means creating a sellable business model with an exit strategy that involves a buyout by a larger firm. Others want to own and operate their businesses for the long-term and deepen their roots in the communities they serve.
Question 2 – How do you support dispensary retailers in determining who they want to ‘be’ in the market? Are they going to be the local coffee shop or the Starbucks? A specialized boutique, or part of a greater chain?
AP: We start by making sure our clients have a strong understanding of the market—both in the region where they intend to operate, and more broadly on a state and/or national scale. I believe all operators, regardless of location, need to understand the big picture so they can truly assess their goals and expectations for their business. Once this baseline foundation exists, we dive into the branding process while considering the client’s resources. A client with more limited access to capital may not be able to pursue multiple storefronts or licenses. In this case, the client would be opening a singular store and the branding and operating practices for this vary substantially from a team going after 10-15 licenses. It is important for teams to realize that being a boutique retailer goes far beyond the branding—to truly be a boutique experience, retailers need to think about the products they are curating, the customer experience from entry-to-exit, the level of experience and training represented by the employees working within the retail shop and the overall brand.
MS: Through High Road’s design services, which includes branding services, we play the role of storyteller with our clients. We help them understand their core values and communicate those values through logos, brand identities, store environments and experiences. A lot of the core values that businesses come to the table with can be communicated with these services and that is how we help them be the best version of themselves that they can be.
Question 3 – Describe the cannabis consumer of 2019. Are consumer segments changing? If so, how, and how are these shifts impacting the demand for higher quality retail experiences?
AF: The consumer segments are not necessarily changing, however consumers who were perhaps more “in the closet” when it came to consuming cannabis are now more open to others knowing that cannabis is a part of their lifestyle. As this industry evolves more towards mainstream and accessibility, education will play a key factor in a memorable and successful retail experience.
MS: One thing that we can assume in 2019 is that people walking into our clients’ dispensaries, whether in a highly regulated medical state on the east coast or a recreational dispensary in California, have heard of cannabis. They see it is a medical option and a safe reliable product. That says a lot. We are now catering to a more educated consumer and a more mainstream consumer. With more mainstream customers comes a higher threshold of service and the importance of making environments suitable for a wide demographic of people.
Question 4 – What should a dispensary operator be considering when it comes to reaching customers from a layout/visual merchandising perspective?
CB: Most customers visit a cannabis dispensary for the first time because the dispensary is near where they are when they want to purchase cannabis. We believe customers return to a store because of the dispensary’s promise to its customers and the brand experience. The brand story is just as important as the design of the overall space when it comes to establishing trust with the customer so the customer returns in the future. Keep the space clean, simple, and easy to navigate. Create an experience for the customer that they will not forget. This can be as simple as remembering the customer’s name or designing a thoughtful loyalty program. Take the same approach with your social media feed by staying true to your brand promise throughout your design, ensuring that the customer has a well-thought-out experience from online to in-store.
MS: From a layout standpoint, operators should consider the loosening regulations whenever possible to allow for increasing openness and accessibility throughout the entire retail experience. Still, when secure lobbies are a requirement, provide enough space for the important steps of the customer journey. Allow space for a line to form at check-in. Use all of the showroom for displaying products and encouraging shopping and browsing, don’t just limit yourself to what can be displayed at a counter with some back shelves. And use the visual merchandising to not only display products in an organized fashion but to help customers explore how products are used with each other. Make them more enticing for the customer.
Question 5 – Describe how point-of-sale-generated data can be used to drive sales and increase customer retention.
AF: Brand loyalty is such a big component to retail success. Product availability across each store is now fairly consistent, and one of the key ways to stand out is the quality of service and customer experience in the store. Part of that includes personalizing the customer’s store experience: knowing what they bought last time, introducing them to relevant products they may enjoy based on past purchase behavior, etc. All this information can be generated utilizing POS data.
Question 6 – What is at stake for cannabis retailers who don’t take design and customer experience seriously and how can an independent operator find success in a market becoming dominated by chain retailers?
AF: It’s not just what’s at stake for cannabis retailers, but what’s at stake for the cannabis retail industry. We need unique brands and retail experiences to move this industry forward. This industry was built upon some of the most interesting and unique people I’ve ever met in my life. They are the heart and soul of this industry, and there needs to be a place for that. Chain retailers and boutiques can co-exist – I am cautiously optimistic there is enough of the pie for everyone to benefit.
Question 7 – How can retail design be used as a tool for advancing attitudes, policy and long-term sustainability?
MS: Quite frankly, one of the biggest obstacles the cannabis industry has faced and continues to face today is the battle against ill-formed stigmas and negative stereotypes from the Prohibition era. Design is a very valuable tool in that it presents a different image, attitude and reality in the form of visual brands, education, beautiful stores, well-thought-out product design and packaging. When a product looks safe and the environment in which it is obtained feels safe that can go a long way in moving an industry out of the shadows of society and onto Main Street.
CB: Retail design plays a huge role in shifting outdated mindsets and perceptions about the cannabis industry. Well-thought-out visual merchandising, as an example, changes the way customers will experience brands and learn about various products. If this experience is thoughtfully designed, and the information customers care most about is presented in a digestible way, the customer should leave the retail experience with a more positive attitude about commercial cannabis. For regulators considering cannabis legislation in their towns, counties, or state, visiting a beautiful, well-designed retailer can absolutely help regulators to imagine cannabis in their region.
There you have it, the highlights of the fierce female SXSW 2019 panel discussion—Exploring the Future of Dispensaries: Design, Sustainability and Customer Experience. If you have additional questions or want to learn more about the topics discussed, contact us at firstname.lastname@example.org.
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