If you’re a regular Marijuana Venture reader, you know we’re a no-BS business publication that calls it like it is. I’m proud of that. The magazine’s editor, Garrett Rudolph, and I regularly chat about subjects as diverse as how to position our events, what — if any — aspects of pot culture we might delve into, what ads we’ll accept and a host of other issues. However, one thing has always been front and center for us: a no-nonsense approach to the legal marijuana industry and a “tell it like it is” mantra.
My background before launching the magazine included owning and running a top-10 consumer software publishing company. We owned big brands, sold to mega-retailers like Costco and Best Buy and also serviced mom-and-pop computer stores. In that time, I learned a lot about retail strategies. I learned why Costco consistently crushes Sam’s Club, why Best Buy wiped out Circuit City and what makes some unlikely retailers successful.
The cannabis industry is a once-in-a-lifetime chance to see an entirely new retail sector emerge and mature in real time. Eight years ago there wasn’t a single state-licensed, adult-use recreational marijuana store in the entire United States. Today there are thousands, and with each new legal state, the count goes up.
Here are a few of the things I’ve learned in my time in both the traditional consumer products space and six years watching winners and losers in cannabis retail, particularly in Washington state, where Marijuana Venture is based.
– Big and glitzy doesn’t always work. Early on in the consumer electronics business, Incredible Universe was the ultimate in excess and glitz. It rapidly failed as retailers with more focus and better prices attracted consumers who quickly tired of “high concept” and gimmicks. Recently, though for entirely different reasons, Fry’s Electronics met a similar fate.
On the other hand, Best Buy survived because of a simple focus on prices and customer service. The same basic strategies hold true in cannabis: great prices, big selection and friendly staff trump glitz every time.
While there have been plenty of “high concept” cannabis stores that have been tremendously successful, an incredible design on its own probably won’t be enough to keep customers coming back week after week.
– Location, Location, location. It’s an old saying, but one that’s based on proven history. In Washington state, the top 10 stores by sales are all in great retail locations. They focused on the basics: Lots of foot traffic, good parking, street appeal, demographics and proximity to customers. Whether shoppers are buying a gallon of milk, a tank of gas or a gram of cannabis, they’re far more likely to go where it’s convenient, even if costs slightly more.
– Customer service matters. The days of the aloof budtender who looked down his or her nose at the “uneducated” new customer are long gone. In its place at successful stores are clean, friendly, attentive salespeople who answer questions, offer advice and always do it with a smile. Selling cannabis is no different than selling in any other retail category, and the attitude of the person dealing with the customer is paramount.
So, while it might sound attractive to sink millions of dollars into an over-the-top retail experience in a far-off location, experience in the NW states has shown conclusively that while a great design is good, a great location is even better!