Tag Archives: seasonality

Anticipating the Ebbs and Flows of Seasonal Retail Cannabis Sales

By Itali Heide
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Like any industry, cannabis can experience ups and downs, especially when it comes to a doors-open retail business. Dispensaries that operate in towns or cities that attract tourists experience this more than anyone, seeing sales spike during the busy months and reach lows during the off-season.

We spoke with the folks at Dragon Hemp, a hemp retailer based in Sag Harbor in the Hamptons. As a brand that has first-hand experience with seasonal spikes, they were able to provide more context when it comes to anticipating the ebbs and flows of seasonal retail cannabis sales.

What is the Best Way to Prepare for Post-Busy Season Retail Lulls?

In Sag Harbor, Dragon Hemp awaits a spike during the busy summer months, as well as lulls when the tourist season is down and visitors head back to New York City and beyond, many becoming loyal online customers year-round.

According to Kevin Menard, LAc, founder of Dragon Hemp, the best way to prepare for post-busy season retail lulls is to build a community of loyal customers that take your brand home with them.

“Post-busy season lulls can be very useful in setting strategies and goals for the coming year. In our case, we do a thorough inventory review and align what we have with what we need for the upcoming peak season,” says Menard. “As the season winds down, they prepare for online orders that come from the impression left on customers in the store. “We also focus on cultivating our owned channels where we can have more direct communication with our community.”

Advice on Preparing for Busy Retail Seasons

Kevin Menard, LAc, founder of Dragon Hemp

Before the busy season is even over, it’s important to start preparing for the lull in business that’s bound to set in. For Kevin Menard and his business, preparation starts with inventory. So, what’s their secret? “Make sure you have budgeted for an inventory of your most popular items and hire excellent storytellers in both your retail locations and e-commerce marketing teams.”

Keeping an eye out on inventory management can be a great way to spend the slow months. Give brands a chance to monitor sales trends and keep up with changes in consumer preferences, putting more time and effort into online retail and social media and implementing promotions and sales online and in-person. Grow the team behind the brand, keep up with all new regulations and focus on customer loyalty to maintain trustworthiness even from afar.

Turning a Seasonal Customer Into a Lifetime E-Commerce Customer

In order to turn a seasonal customer into a life-long client, it’s important to connect beyond just the sale and product. For Dragon Hemp, the most important part is personalizing the experience for their customers: “For us, it’s all about achieving personalization with each customer,” says Menard. “Typically, a seasonal retail buyer will be opportunistic about their purchase in-store, but that purchase is indicative of a longer-term need. We try to create customer profiles based on in-store buyers and craft recommendations that fit that customer’s health needs over the long term.”

In order to turn a one-time buyer from out of state or city into a lifelong loyal customer, there are a few things to consider that can make this connection happen. First and foremost, building a relationship by maintaining impeccable customer service and personalizing the experience.

Focusing on online retail is also important in order to maintain the connection with clients. Making sure the website is in perfect shape and offer loyalty programs, incentives, promotions, sales, discounts or rewards to returning customers.

Marketing and publicity are other essentials, as you want to target those who have a long-time need that needs to be filled. Allowing for a fuss-free online shopping experience, targeting people who fall in line with the brand’s products and values, being creative and innovative when promoting the website and keeping in touch with active social media and newsletters.

How to Project Goals In Places That Swell Seasonally

It can be difficult to project year-on-year retail goals when the geographic location has a tendency to swell seasonally and have off-seasons but preparing and knowing what to expect can help with reaching those goals (and even surpassing them).

According to Menard, the secret to projecting their goals starts with their first location: “Since our first retail location in Sag Harbor, NY has been open only a year, our projections are still a work in progress! We’re using 2022 data to budget for this year, accounting for marketing efforts, increased awareness, and seasonality. We have some sensitivities built into this model based on different growth scenarios.”

The instabilities and fluctuations that come with a business that works on a seasonal tempo can be challenging when it comes to reaching and achieving specific goals, but there are things that can be done to make the whole process more seamless, and hopefully, more successful.

Looking back at previous years can be helpful in pinpointing tendencies and habits that can be observed in the consumer, and the lower sales allow space for the time that can be used in innovating and creating new products that are based on what the client base wants.

Researching not only the immediate region, but the regions that people often visit is another handy trick. Knowing who is coming, why they’re coming, and what they’re looking for can help set objectives that can be brought to reality throughout the off-season and the busy season, even experiencing more foot traffic in town. Moreover, making the most of the local events, occasions, changes and circumstances like holidays and local events can keep the brand connected to its roots and primary clients.

The off-season is a great time to set up a budget or specific monetary goals to reach, and off-season fluctuations can be added in to give a more complete idea of what the year might look like. Keeping an eye on the market by monitoring it and using forecasting models to predict results can also help set the stage for changes in the year-to-year goals.

Expanding From a Cannabis Retailer to a National E-Commerce Brand

Dragon Hemp didn’t start off with a bang, but they sure have achieved it over time. Dragon Hemp products were conceived by renowned alternative health practitioner and founder, Kevin Menard. Using hemp oil, Chinese herbs and native botanicals, they have managed to create a variety of beneficial and natural products.

“Our apothecary in Sag Harbor has been a great success, but the most rewarding aspect of the location has been the ability to have direct conversations with customers and get a deep understanding of how we can support their journey to better health,” says Menard. “We’re excited to expand our mission of helping people feel like themselves again by using next-generation natural botanicals and time-honored herbal remedies.”

Final Thoughts

As the country continues toward legal and accessible cannabis, new businesses are learning the ropes and those that have been there all along have been leading the way.

Having ups and downs in any business is to be expected, but just like any industry, knowing what to expect and what to do can make these challenges seem like less of a hassle. Building an online presence that clients connect to, developing e-commerce strategies, expanding product lines, building a loyal customer base and staying up-to-date with the latest regulations are surefire ways to stay on top of the cannabis business.

The Cannabis Industry and the Science of Seasonality

By Blaise Lucey
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Let me be honest: I’ve only been part of the cannabis industry for six months. Before that, I worked at B2B tech start-ups and ad tech companies like Roku and Criteo. The most valuable thing I learned is that most good ad campaigns are linked to seasonality.

When I worked at Criteo, the vast majority of our clients were retail and ecommerce. Seasonality initiatives were critical. The more relevant your ads to an upcoming seasonal event, the more relevant they were to the audience. Think about any window display you’ve seen recently – the CVS near me has had Valentine’s Day products in the window since at least mid-January.

When I worked at Roku, we got to take a look at TV streaming behavior. For example, when Ben Affleck started dating Jennifer Lopez again, searches for their movies and music videos skyrocketed. During the space race, general space-related (think Star Trek) TV content went up.

That’s not seasonality – that’s psychology.

As the cannabis industry matures, businesses should start thinking about what seasonal, psychological and cultural factors impact their consumers. Cannabis consumption could be said to be the art of the business, but understanding what cannabis consumers want is the science. Here are three ways to think about that science:

1. The Science of Stash

One analyst recalls that cannabis sales reached “unimaginable” highs in 2020. He called this “pantry-loading” behavior. Let’s call it “stash” behavior.

The buying behavior of a cannabis buyer who buys an eighth is fundamentally different from someone who buys a six pack. The six pack is gone in a weekend. Which flower buyers are buying an eighth just for a weekend? A week? A month?

During the height of the pandemic, with nowhere to go and a lot of anxiety, dispensaries provided at-home entertainment for cannabis consumers. That’s why sales grew by 46%. Cycles of consumption naturally went up. In this case, I think of streaming TV, too – Netflix added 36 million subscribers in 2020 and Roku saw 58.7 billion hours streamed in 2020.

Is there a correlation? Well, stashing behavior obviously correlates with couch behavior. When people spend more time inside, they’re more tempted to go through their stash and cannabis sales increase.

Cannabis isn’t affected by just regular old seasons – it’s affected by what we could call personal, seasonal patterns. Just like streaming TV, when consumers spend more time inside, they buy more cannabis because they consume it faster.

What is the stash turnover rate for your different audiences? What factors make that turnover rate go faster or slower?

Analyzing stash behaviors can reveal your most loyal and high value customers, and offer new perspectives on how to market to different groups.

2. The Science of Celebration.

One estimate shows that Illinois cannabis sales jumped up by 10% in July due to Lollapalooza. Makes sense – more than 385,000 people attended.

women grow event
“When people are coming into cities for events, they’re picking up cannabis then and there, and likely consuming it in true real-time.”

Looking at our own data, there’s a clear spike around St. Patrick’s Day – cannabis sales are 70% higher than average daily sales in February and 54% higher than average compared to March daily sales. This goes against stashing behavior, because the sales happen on the same day.

This is a different science. When people are coming into cities for events, they’re picking up cannabis then and there, and likely consuming it in true real-time.

Event trends can have a huge impact on cannabis sales and psychology. Where there’s a celebration, there’s going to be cannabis buyers. Event trends often translate to tourism trends. And these cannabis buyers aren’t just tourists to cities, a lot of them are likely tourists to cannabis itself as well – novelty consumers who go into a dispensary for the specific event and pick up a little bit of everything.

That’s an opportunity for new brands and more niche categories (beverages, pills, edibles) to connect with a new group of customers. That said, after that initial purchase, how can the brands stay in touch? That’s where dispensaries and cannabis brands need to come up with new strategies for managing cannabis customer data.

3. The Science of States.

Events like Lollapalooza are regional – and so are cannabis markets. In Massachusetts, BDSA data shows continued growth. In the West Coast, analysts call it a “rollercoaster.”

Note the specific pandemic trend lines. Any state that suddenly saw more than 50% sales one year and a sudden slump the next year at the same is bound to see a market crash. It also made it easy to ignore a lot of structural problems – which states like California are now trying to correct.

Legal cannabis sales are radically different depending on the maturity of the market. Let’s not forget that this goes deeper than just states. Only 32% of the California market even has legal dispensaries open right now.

What are regional trends? What are event trends? What are cultural trends?

The more dispensaries and cannabis brands can proactively market to anticipate these needs – and get the message out there to the right audience segments – the better.

Making Cannabis Personal

What keeps becoming apparent is that above all, cannabis is personal. Everyone is looking for something a little different. A consumer’s tastes can change based on all sorts of factors – or not change at all. Different products might suit different occasions. Different messages will talk to different use cases – some people want cannabis that can make a concert better. Others want it to sleep. Dispensaries need to figure out who’s who.

At the end of the day, that’s what makes the cannabis industry so unique. It is an end-to-end experience like no other. From researching products and dispensaries to analyzing brands and products to consuming it, every interaction a consumer has with a cannabis business is very personal. And if they don’t like their personal experience, they won’t come back.

As the industry looks ahead into a competitive 2022, the mission should be simple: make every touchpoint for every customer a great experience, from start to finish.