Best Practices for Merchandising Hemp and Cannabis Products for Consumers
The hemp and cannabis industry has undergone transformative changes over the past few years, experiencing the challenges of market trends such as price compression. Merchandising strategy has become vital for cannabis retailers in navigating this tumultuous landscape. Below are some expert insights on creating a successful merchandising strategy for hemp and cannabis products:
1. Understand the Impacts of Price Compression
Before creating any strategy, it’s essential to understand the landscape you’re operating in. With price compression affecting the retail market, from a wholesale to in-store perspective, retailers should be aware of its implications on their promotional plans and product display decisions.
Read our article, How to Combat Price Compression in the Cannabis Market: A Guide for Retailers for an in-depth description of price compression and tips for how to navigate it in your business.
2. Don’t Be Over-Reliant on Discounts
While promotions might seem like a quick way to boost sales, they often have unintended consequences. Offering deals indiscriminately might attract a crowd that is just hunting for discounts. Instead, focus on building a business that offers genuine value, so customers have more reasons to come back than just slashed prices.
3. Control Your Retail Destiny
Retailers must know their customer to understand what brands and products they choose to sell based on their ethos and core customers. While you understand your core customer, partner with BKR Brands' market knowledge to find the best brands and products to offer in your store.
4. Evaluate Promotion Consequences
Promotions like “buy three, get three” might seem like a great idea, but they can have long-term repercussions. They might decrease the frequency of customer visits, which means fewer opportunities to upsell or create lasting relationships. Always weigh the short-term benefits against the long-term consequences.
5. Define Your “Why”
Every brand needs a story, a reason for existence beyond just selling products. If your brand story is just about offering discounts, then its value is limited and vulnerable to competitors offering bigger discounts.
6. Be Cautious with Shelf Space Agreements
While paying for shelf space is becoming a trend, retailers should tread with caution. This can dilute the brand’s message, and retailers might end up promoting products that they don’t genuinely believe in.
7. Multi-Channel Touch Points
In the age of digital media, the customer’s journey begins long before they set foot in the store. Retailers should optimize their online presence, be it through social media, email campaigns, or other online advertising methods, ensuring a cohesive brand experience.
8. Strategically Plan Store Layout
The store’s layout can have a significant influence on the buyer’s journey. Taking inspiration from successful retailers like Costco, cannabis stores can benefit from strategically placing products to direct customer traffic. Also, being flexible and adapting the store’s layout based on customer behavior can improve the shopping experience.
Navigating the challenges of the hemp and cannabis industry requires a robust merchandising strategy. By focusing on building a genuine brand value, avoiding indiscriminate discounts, and optimizing store layouts, retailers can offer a unique shopping experience that keeps customers coming back. In an industry still in its early stages, long-term thinking and brand building will define the winners.
