Traditional brick-and-mortar retailers are facing major challenges due to ease of credit cards, federal postal services, and potentially even other types of shippers. This has made the cannabis industry essentially immune to the challenges that other physical retailers have. This doesn’t mean that marijuana retailers don’t need to be experiential or try harder, but rather it suggests that the physical store experience can be a primarily offensive direction in order to create brand awareness and dominance, versus substantially being defensive as it is for most retail today in trying to counter-impact the online business.
Also new to the cannabis category in the aspect of retail is individual vs “branded house” product. Think of the spice section in your local grocery store with red caps of the iconic McCormick brand dominating, rather than the individual flavor profiles themselves dominating. Cannabis started out with the contrary, with the flavor and experience profile of the individual product defining it rather than a dominant brand umbrella defining it. However, this contrast with cannabis where the flavor profile is the brand, and the sense of origin, etc. comes secondary, has been changing rapidly now with the growth of celebrity and lifestyle branding. Think Whoopi Goldberg, Cheech and Chong, Willie Nelson, etc. where the flavor profile is through the eyes of Willie, Whoopi, and Cheech. This represents a big change in the industry where ultimately certain brands will be common across distributors and retailers versus each individual retailer essentially creating their own “special sauce” unique to their environment. With the advent of cross retailer branding, the individual brand of the retailer will become more critical (versus relied on price or uniqueness to drive the consumer from a destination standpoint).
Important in terms of future growth will be a key and differentiated brand identity. As legalization continues to become more flexible and market driven, formats such as shop-in-shop concepts as well as event and lifestyle pop-up concepts (cannabis meets food truck, etc.) will arise. Cannabis will grow into other delivery spaces for pet, spa and treatment applications; home furnishings; and luxury accessories and consumables. Today’s fairly cut and dry approach to reception, consulting, selection and transaction will become more complicated (in a positive way), impacting everything from staffing to seasonality, to requirements for flexibility beyond today‘s primarily transactional environment.
Due to many cases of landlord reluctance, particularly national landlords, to accommodate companies within the cannabis space, they’ve often been relegated to second or third tier locations, industrial parks, or the capital intensive activity of purchasing or building a freestanding facility. The next generation of locations will most likely become part of lifestyle assortments, like adjacencies such as Lululemon, Whole Foods, the local gym, etc. with the cannabis retailer to be a welcome and lifestyle appropriate co-tenant to many of the national tenants, particularly in the wellness, leisure and food segments.
Society has already made a significant change in the perception of cannabis as a medication, and as perceptions continue to evolve in the world of cannabis through the rest of 2017, the brick-and-mortar concept has been integral to the movement. Thus, allowing the public access to these products in an entirely new type of space. The design concept of the physical environment provides the retail dispensary model an opportunity to create interactive experiences, as well as personal connections. The mental perception shift in medical and recreational clients alike will continue to open a door to societal growth and appreciation of cannabis.
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