Chapter 2:
Cannabis Market Research
Important Cannabis Market Research Insights are Emerging
Key Cannabis Market Research Insights:
- Shoppers want more information about their cannabis products. Customers value both labels and knowledgeable budtenders who provide accurate information about the terpenes of their product.
- There are more opportunities to up-sell customers (both in-store and online) using auxiliary products such as flower grinders and rolling papers. This is especially true for Gen-Z and Millennial markets.
- Bridging the stigma still surrounding cannabis by offering discrete packaging and confidentiality during consultation in-store. Offering this gradual transition is especially important for new customers within the Gen-X and Boomer categories.
- Both value and sensorial benefits should be used together to engage shoppers in the category. As the cannabis landscape changes, cannabis market research is important to understanding your customer.
To understand how shoppers are interacting with cannabis today as well as identify opportunities, we surveyed a representative sample of n=675 Americans nationally who use cannabis. At the time of our cannabis market research, 18 states had legalized the substance for recreational use. Using cannabis data analysis and qualitative research, our Cannabis Shopping Trends Study revealed valuable shopper insights.
Cannabis Purchase Triggers and Trip Planning
Cannabis purchase triggers are different based on occasion and age demographic. Social occasions such as long weekends, vacations, and gatherings tend to be stronger purchase occasions for Gen Z/ Millennials, while Sleep and Relaxation are more common among Gen X and even more so with Boomers.
Price and quality are also important considerations. Gen X and Boomers place greater importance on price compared to Gen Z/ Millennials. Gen Z/ Millennials place greater importance on the flavor and brand than their Boomer counterparts.
Word of mouth and online sources are commonly referenced as part of trip planning: 29% of consumers talk with friends and family prior to purchasing cannabis. Understanding purchase triggers and the trip planning process allows for more effective, targeted marketing toward cannabis customers.
Cannabis Channel and Retailer Choice
Similar to other product categories, the convenience of E-Commerce is a primary motivator of channel choice. Consumer trust and knowledgeable staff are important when selecting brick and mortar locations. Most trips (75%) to the dispensary are at least somewhat decided but invite room for in-store or on-site influence and impulse.
Effective retailing targets these customers using knowledgeable staff, well-thought-out interior design to create branding, and a wide selection of auxiliary products (rolling papers, grinders, etc.). Both e-commerce and in-store can be used together to offer both convenience and service.
Cannabis E-Commerce
The pros of e-commerce from the consumer’s perspective are that they can avoid travel and parking as well as the ability to research and compare products. The search bar is most common, with 60% of cannabis shoppers using it to find products online and seek on-site recommendations.
This channel is ideal for cannabis consumers using online sources to learn about different products (product reviews, forms, etc.). It’s also convenient because free delivery is usually included.
Also, e-commerce offers the ability to remain somewhat anonymous vs. In-Store. This is important culturally as we bridge the stigma surrounding cannabis use.
E-commerce shoppers can be enticed to shop in-store if the locations offer items that online does not, or if they urgently need the product. This same trend of embracing in-store emerges across other categories.
Cannabis In-Store
There is still a considerable stigma associated with shopping for cannabis in-store. To put shoppers at ease, consider offering a private area to talk with a budtender and offer discrete packaging/bags for shoppers looking for a more confidential purchase experience.
Sale prices and promotions help to encourage trial, and recommendations play a significant role.
Pricing plays a crucial role when marketing in-store because of high-value customers. The average spend on a trip is $107; younger shoppers spend the most per in-store trip.
Apart from pricing, greater interaction with products in store can improve the brick-and-mortar experience. For example, over a third of respondents agreed that in-store could be improved using in-store promotional campaigns and product testing opportunities. This is important when attracting new cannabis users who value trial sessions.
Further, understanding your target demographic is crucial. For example, boomers are the least likely to use ancillary products, (rolling papers, flower grinders, etc.) even though they are the most commonly used across the category. Effective cannabis market research is important when searching for insights into your target market.
Cannabis Packaging Research
In terms of packaging, potency and amount of THC are key elements when choosing flowers and pre-rolls. For vapes, flavor is higher in the packaging hierarchy than flower and pre-rolls. These subtle distinctions are important when making packaging decisions around different forms of cannabis.
Understanding the sensory experience is critical on pack across all edible formats. Strength and flavor are key elements shoppers look for when viewing a beverage package. Other forms such as oils and soft gels have similar needs when it comes to packaging.
