3 trends for brands looking to stand out in online cannabis retail

Published on Dec 09, 2022

3 trends for brands looking to stand out in online cannabis retail

If you had to name one thing that the pandemic transformed the most for the cannabis industry, its relationship with e-commerce would be a worthy choice. As companies transition away from the economics of the pandemic, they’re facing more competition than ever and greater expectations from consumers. To stand out, cannabis retailers will need to take their e-commerce to the next level.

How the pandemic transformed online cannabis retail

Like many other industries, when lockdowns and quarantines became commonplace across the country in 2020, cannabis retailers turned to e-commerce and contactless customer experiences like curbside pickups to carry on business during the pandemic.

Unlike other industries, however, the cannabis industry faces greater regulation and more limitations for online selling. Three of the main limitations for online cannabis commerce include:

  1. No access to shipping via USPS, UPS, or FedEx, as it would be considered drug trafficking,
  2. Many cannabis retailers can’t accept credit cards,
  3. Marketing and selling via social media, in search engines, or in apps is often highly regulated and made more difficult as platforms like Instagram can change policies overnight.

Necessity is the mother of invention, though, and cannabis retailers spent much of the last two-and-a-half years rapidly maturing their e-commerce approach by adopting courier networks, adding a drive-thru to fulfill online orders safely, and adopting marketplaces to facilitate credit card payments for e-commerce transactions and connect to new buyers.

As consumers become used to shopping online for cannabis, it’s up to the cannabis retailers to continue their transformation and deliver an online experience that meets or exceeds the expectations of consumers today.

3 Trends in Cannabis E-Commerce

Let’s take a look at what innovative cannabis retailers are doing to get ahead in today’s competitive marketplace.

1. Improving UX Design

Bad experiences with your website or app will hurt your bottom line. In fact, 88% of online consumers are less likely to return to a site after a bad experience. Even your loyal customers might not stick around for bad UX: 32% of users will leave a brand they love if they have one bad experience.

Whether it’s optimizing your site for mobile usage or simplifying the checkout process, delivering a great user experience is critical in a competitive ecommerce space.

What is the goal of good UX design for cannabis ecommerce online or in an app? For Bart Schaneman, Editor at MJBizDaily.com, good UX should make the experience frictionless, and “can also customize the interaction with the customer, leading to a better experience in the future and, potentially, more sales for the business.”

Simple touches can make big differences for cannabis retailers looking to increase online sales. Include customer reviews on products or provide recommendations that make it easy for consumers to discover their next favorite product.

2. Developing a cannabis-friendly social community

When people shop online, they rarely go directly to the site from which they ultimately make a purchase. Social media is a key part of a multi-channel e-commerce experience. For cannabis companies, Instagram—with its focus on beautiful images and short videos—has been the preferred channel. But limitations on cannabis e-commerce on the platform mean you should look elsewhere to help grow your customer base further.

Today’s consumers are turning to community platforms over traditional social media sites. One that is particularly popular is Discord, which doesn’t have the same restrictions on marijuana-related content as other sites.

Retailers like Exotic Genetix use Discord to host “daily giveaways, and seed release announcements.” With their growing community (pun intended), they’re able to keep customers engaged and build a community that helps educate newcomers—all while keeping your main website clean and usable.

3. Invest in your own e-commerce site

With so many challenges to cannabis e-commerce, many retailers relied on third-party marketplaces to sell their goods online. While these are important avenues for selling, retailers looking to really grow their customer base online should look to develop their own sales channel.

Many of the marketplaces that once catered to local businesses are being co-opted by large, multi-state operators. Furthermore, small retailers that use marketplaces are not only competing against other, often bigger retailers, they’re competing against the marketplaces themselves.

When cannabis consumers use a marketplace, their relationship (and their data) is with the marketplace, making it difficult to capitalize on those sales and develop your customer relationships.

Take control of your brand and your customer’s experience with an e-commerce approach that keeps your customers and their data on properties you control.

Moving cannabis e-commerce past the pandemic

Cannabis retailers made great strides with their e-commerce experience during the pandemic. Now, though, increased competition and greater consumer expectations mean retailers have to take the next leap in evolving their e-commerce experiences. The right mix of simplicity, community, and control will determine whether retailers will create a sustainable and modern e-commerce experience for today’s cannabis consumers.

Learn more about how Valley’s Cannabis Banking can help you here.

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