Incorporating the foundations of non-cannabis retail can help dispensary owners reach their potential
Last year I visited the RAD (Retail and Dispensary) Expo in Portland, Oregon, and in order to grasp current challenges in the cannabis industry, I met with retailers and manufacturers. After sitting in seminars and Q&A sessions I started to hear a recurrent theme of questions from retailers: How does a retailer grow their business after initial profitability? How does a retailer find long-term sustainability?
I realized many cannabis retailers lack the core business knowledge needed to optimize their potential. I have more than 30 years of experience in retail, working closely with Fortune 500 companies, so to help retailers in the cannabis industry, I wanted to share my retail experience and business principles. Here is a roadmap that retailers can use to nurture their success.
In order to open and maintain a successful business, one should create and maintain a business plan — a living document that can be provided to investors and suppliers. At a minimum, this document should explain business practices, goals and products or services the business supplies. This document should provide a roadmap of your business for suppliers and investors, showing them why they should work with your dispensary.
It is important to analyze the cannabis industry and continually watch for change. Focus on how your consumers and suppliers evolve over time. When the market changes, make sure that your business is still able to meet the needs of consumers and suppliers. Your business should be dynamic and able to adapt to change.
Without customers a retailer will fail. When looking at your business, think about the people who visit your store. Is each customer the same? Do all customers look for the same product? How much is each person willing to spend? The store should be tailored to meet the needs of your customer base; not every store has the same base.
Think about implementing innovative solutions in order to draw in new customers while also retaining loyal customers. While newer customers might need to be educated on products, established customers might not need as much assistance or education. Make sure all employees are able to assist the needs of all customers.
Suppliers dictate the products you sell and the cost of goods. Closely watch your suppliers to anticipate supply changes. This will help you readily react to changes in a timely fashion. Make sure suppliers provide a mix of products that match your consumer demographics. Ask yourself questions when buying product: Is this something my customers are requesting? Is my customer price sensitive? Are my suppliers providing quality products? How am I moving products off the shelf?
Are there other dispensaries in your area? What are they doing well? What are their weaknesses? A great way to understand the competition is by visiting their stores. Once you understand your competitors’ strengths and weaknesses, adjust business practices based on what you have learned in order to regain or increase your market share.
Employees are the face of your business. At a dispensary, customers will likely be interacting with employees, not the investors or owners. Therefore, employees should be ambassadors for your business. They should understand customer demographics and be able to provide excellent customer service and product education to all customer types.
Hire good people who want to see your dispensary thrive. These individuals will be invested in the future of your business and will work harder than those who are just there for a paycheck. Your employees should be well-trained, understand your products and follow the core values of your business. As a result, you will find long-term profitability.
Know your Products
Know the following about the products sold at your dispensary: the price you pay for it, what you sell it for and how fast it sells. Efficiently managed inventory will have the greatest impact on your bottom line. Always have high-margin, high-velocity products in stock. This will improve profitability. Invest wisely in your inventory.
Know your Store
High-margin, high-velocity items should be readily available for purchase in your store. These impulse buy items will easily increase profitability. Well-trained employees should be able to suggest additional items that are complementary to a customer’s current purchase. If customers have to wait for services, have product information readily available. This will help customers make decisions prior to interacting with your employees, which will improve overall efficiency.
Hoss Yeganeh is the founder of High Fly Authority. He has more than 30 years of retail experience targeting retailers and suppliers, with expertise in product lifecycle development and retail store management. For more information, he can be contacted at firstname.lastname@example.org or 952-974-2037.