Cannabis is complex. It’s a brand-new category in the (legitimate and legal) market. There are many different formats, product types, consumer groups, and channels (online, in-store, medicinal, recreational, and even pet-focused, for example) to navigate. And there is still a taboo attached to the category, which makes marketing the product that much trickier.
As such, new ground is being broken and fundamental market research questions are being posed by brands hoping for a competitive edge. How large is the market? What are competitors doing? What does the path to purchase look like for the inexperienced and experienced cannabis shopper? Which marketing research processes and technologies are best for understanding the buyer?
For brands in the cannabis space, understanding the different shopper segments and their journeys is incredibly important. Not only in order to create and maintain a competitive edge, but to better focus product category development, marketing efforts, and more.
The New-age Cannabis Market
- Legalized in Canada in 2018
- Global cultivation market worth USD 322 billion in 2021
- Legalized in 19 US states and growing
- Canopy Growth is the world’s largest cannabis company with over 2,000 employees
- Channels include retail, wholesale, medicinal, recreational, food and beverage, pet products, and more
Dark alley deals with shady characters is a thing of the past. Cannabis stores, like those by Canopy Growth, are bright, inviting, and atmospheric. Their marketing focuses on slick design, high-profile partners (Martha Stewart gummies, anyone?), and innovative products to suit the different needs of their buyers. From chocolates to beverages, pet gummies, and even drop bottles that slip easily into a handbag or backpack – the new-age cannabis market is diverse, multifaceted, and ever-growing. In fact, it’s one of the fastest growing sectors in North America.
Naturally, the marketing research process requires some re-imagining. Cannabis is not your typical retail or online product. The journey from desire to purchase is nuanced. That’s where an innovative approach to research makes all the difference.
The Stakes have Never been “Higher”
The cannabis market, as we’ve mentioned, is complex. That’s not only because of a variety of channels and an underlying taboo around the market. The inherent complexity is compounded by rapidly evolving (and devolving) regulations, market trends, consumer sentiment, cultivation methods, new strains, and new grants, to name but a few.
What’s more, brands must understand both their experienced shoppers and those new to the cannabis market. Deciding to try cannabis gummies for the first time or switch up your Sage N’ Sour for Kosher Kush is hardly akin to sampling a new moisturizer, after all. The shopper who’s familiar with buying on the black market is a different beast altogether than the one who’s shopping online for edibles for their French bulldog. The convolution these different categories and shopper experiences represent means the need for a state-of-the-art marketing research process.
Explorer Research is an industry leader in shopper insights with a strong focus on measuring real-world shopper behavior. Too many marketing research processes focus on simple surveys and single methodologies that fail to paint a full picture. Here at Explorer Research, we use cutting-edge technologies to test in an immersive environment. With the capacity for real retail environment testing, 3D simulations, and biometric measures such as eye tracking, we can tap into the highs and lows of the shopper journey – the emotional drivers behind the purchase decision.
Using Mixed Methodologies to Optimize the Shopper Experience
Recently, Explorer Research partnered with Canopy Growth to conduct a mixed-methodology study, to measure the size of the market, better understand their shopper’s journey, and measure the real-world behaviors of their buyers. In this market research study, we utilized:
- Qualitative online study
- Shopper observations
- Eye tracking in-store intercepts
- In-depth shopalongs
Using a mix of methodologies provides a more whole-customer picture. For example, online quantitative research can size the market and help inform the behavioral phase of research, while in-the-moment responses capture drivers of behavior. At the more technologically advanced end of the equation, eye tracking and observations measure in-situation behavior to optimize execution.
The results from this mixed-method study saw two distinct cannabis shopper groups emerge: The inexperienced shopper and the experienced shopper. Importantly for Canopy Growth, these shopper groups represent very different buyer journeys and behaviors. The experienced group made up around 75% of the market, while inexperienced buyers accounted for just a quarter of those surveyed. Effectively marketing to both groups involves a deep understanding of their needs, motivations, non-negotiables, and a range of other factors.
How Eye Tracking Technology Leaves no “Stoned” Unturned
Online quantitative studies are incredibly valuable for gauging shopper behavior using decision trees (in this case by channel and product) and ranking the importance of different factors in the buying journey. But they fail to reveal the influence the planogram and marketing signage have on the buyer, whether interacting with the ‘budtender’ is beneficial, and how long an inexperienced shopper will mull over a particular varietal before making a decision, for example.
In our eye tracking studies for Canopy Growth, we were able to deep-dive into the shopper’s in-store experience and discover the answer to the most pressing questions.
The cutting-edge technology and proper eye tracking methods help to reveal the triggers and barriers that impact the shopper journey for inexperienced, experienced, and illicit shopper groups.
The results of the research have very real consequences in terms of marketing decisions for Canopy Growth, as they do for other cannabis companies in the market. The syndicated data available from Explorer Research can inform brands on everything from the impact of their store staff on purchase behavior, how to lay out retail stores for maximum efficacy, what kind of signage and messaging receives the best response from buyers, and how to make the shopping experience a pleasant one for both inexperienced and experienced buyers.
Navigating the “Highs” and Lows of this “Growing” Industry
In summary, mixed methodologies like those used in our study for Canopy Growth meant diving deeper into the shopper’s experience to optimize it across all categories. The results gave us a fuller picture of the experienced and inexperienced shopper, the factors that are really important to them, what impacts their buying decision, and most importantly, how to influence that decision by creating a more positive experience.
