Boosting Cannabis Retail Profitability: The Power of Multi-Unit Sales

When examining Headset reporting data from various states after legalization, a concerning trend becomes evident. Within two years of operation, many cannabis retailers experience a decline in their average basket sizes. While pricing compression can be a contributing factor to this decline, a significant aspect often overlooked is the number of units per transaction.

The heart of the issue lies in single-item sales, which can spell disaster for retail profitability. Encouraging customers to purchase more than one item per transaction can feel like an uphill battle for many retailers and brands. Having worked with retailers on this exact problem, we can confidently say you can increase the average basic size with tried and true tactics we will go over in this blog.

The Power of Multi-Unit Sales

To drive profitability, it makes perfect sense to focus on getting the team on board for multi-unit sales. In fact, having a pulse on the average number of units can be a very quick check-in to see how education, merchandising, and buying are doing.

But where do you start?

Budtender Sales Training

Helping your team develop the skills, product knowledge, and understanding of multi-unit sales should be step one.

Think back to the last time you ordered fries at a restaurant, and the server casually asked if you would like to add some gravy. Remember how effortless and non-intrusive that suggestion felt? Chances are, you appreciated it and decided to upgrade your order without feeling pressured to do so. Upselling can be simple, effortless, and in fact, appreciated.

But let's step back a bit and talk about basic skills. Beyond product knowledge, budtenders must develop the skill of making these offers and suggestions during each transaction. In our training, we recommend giving three suggestions, five at most, to help customers make a choice and not be overwhelmed.

Much like the bartenders the name is inspired by, your customers will expect expert suggestions, personal recommendations, and insights in products from your budtenders. Whether the customer knows exactly what they want or has no inkling, a recommendation or suggestion can be made to elevate their experience and increase the basket size.

The Psychology of Choice and Your Inventory

When customers are presented with a one-product option, they are faced with a binary choice: buy it or don’t buy it. There is a fine balance that needs to be reached with options.

By overly limiting options, you remove a sense of control for the customer, which leads to hesitation and a lack of confidence. Without a frame of reference, it feels difficult to make an informed choice, your customer may even feel that are missing out on a better choice elsewhere. The bottom line, they are more like to walk out with nothing.

On the other end of the choice spectrum is the feeling of overwhelm. Providing customers with too many choices can leave them with analysis paralysis. While you want to a dynamic assortment that meets your customer demand, you can simplify customer decision-making by having a tight inventory. More is not more when it comes to SKUs.

🔗 Want to learn more about achieving an ideal inventory to simplify customer decision-making? Read: SKU Rationalization: Maximizing Profitability through Effective Inventory Management

This means striking the right balance and presenting a curated selection of options that cater to different preferences and price points while maintaining simplicity and ease of decision-making.

By offering customers a selection of options you are tapping into the psychology of decision-making, which will intern increase their confidence and likelihood of purchasing.

Practical Examples

What is the number one culprit of single-item sales? Baskets with a single flower product.

Flower Products

Imagine a customer walking into your retail location knowing they want to buy a flower product. While they may know they want to purchase flower with specific THC/CBD levels, they might be open to exploring new options. Here's where your budtender's expertise comes into play.

Instead of overwhelming customers with an extensive list of products, your budtender can offer three to five carefully curated suggestions. Each strain should be accompanied by a brief description of its effects, flavour profile, and THC/CBD content. By providing this useful information, you empower the customer to make an informed choice that aligns with their individual preferences.

While your budtender doesn't need to know every single product in extreme detail, they should be well-versed in the characteristics of the strains they recommend. This way, they can confidently guide the customer's purchase journey.

Apart from product knowledge, encourage your budtenders to build a strong rapport with customers. This includes understanding their unique tastes, preferences, and previous experiences with cannabis. By fostering this personal connection, budtenders can tailor their suggestions to match each customer's specific needs.

Edibles

Where edibles can be fun is that you can layer on a range of flavours and styles. For some, knowing that their gummy is vegan matters. Or perhaps they only like milk chocolate, not dark chocolate. Being able to have enough product knowledge to guide someone through a complex decision-making process means an investment in training time. Imagine a customer walks in and asks for vegan gummies because they don’t smoke and they tell your budtender they like tropical flavours. Wouldn’t it make sense to mention that there is a beverage that also matches that preference?

Creating a Customer-Centric Experience

Other than product knowledge here are several practical and approachable strategies we work on with our clients:

Empowering Budtenders: More Than Just Product Knowledge

Apart from product knowledge, encourage your budtenders to build a strong rapport with customers. This includes understanding their unique tastes, preferences, and previous experiences with cannabis. By fostering this personal connection, budtenders can tailor their suggestions to match each customer's specific needs.

The Power of Popular Items and Personal Preference

Highlighting popular and trending strains can also be effective in encouraging multi-unit purchases. If a particular strain is receiving positive feedback from other customers, mention it to the current shopper. Additionally, knowing their personal preferences can open the door to offering similar strains or products they might enjoy.

Creating a Sense of Discovery

Encourage your budtenders to frame the purchasing process as a journey of discovery for the customer. By exploring various strains and discussing their unique characteristics, customers will feel more inclined to try multiple options, resulting in larger basket sizes.

Consistent Training and Improvement

Lastly, remember that continuous training is the key to success. Regularly update your budtenders on new strains and products, and encourage them to share their experiences and success stories with the team. Creating an environment that encourages sharing will make it easier for them to educate on the fly, even on products which they previously would have felt less confident.

🔗 Ready to dive deeper into creating customer centric experiences? Read From Clerking to Selling: Transforming Your Retail Experience and Increase Profitability

Tips for Retailers and Brand

Now, let's discuss actionable steps and strategic approaches for both retailers and brands:

Retailers

• Consistent Product Knowledge Training: Product training is not a one-time experience. By feeling confident, your budtenders are more likely to make stellar recommendations. An easy way to stay on top of things is to implement a Coach-In session that includes product updates and allows for the team to chime in with their personal recommendations.
• Inventory Management: Reduce inventory overwhelm by conducting quarterly SKU rationalization. This will not only simplify customer decision-making but reduce inventory carrying costs for slow-moving products.
• Enroll the Team: Whether you create incentives, turn it into a game, or simply track it during daily coaching sessions, making your team aware of the daily and weekly basket size goals can help them see their progress and wins.
• Merchandising Bundles & Themes: Strategically merchandise displays to encourage bundling or product exploration. Help your budtenders by making it easy to show trending products, themes, and bundles.

Brands

• Laser-Focused Sell Sheets: Customers can feel overwhelmed when presented with too many choices, and the same thing can happen with budtenders when they try to recall your product information on the sales floor. To make your trade marketing materials (customer-facing materials) and budtender sales sheets (product knowledge assets) more effective, focus on three key selling points for your brand/product. This will help ensure that budtenders can easily recall the main messages.
• Share Choice Psychology: Educate retailers on choice psychology and how it impacts consumer behaviour. This will equip them to make better product recommendations and promote your products more effectively. Recommend products outside of your category to broaden customer choices and potentially increase overall basket size.
• Support PK & Share Product: Offer budtender training and product samples (in compliance with regulations) to increase the knowledge and enthusiasm of retail staff for customer satisfaction.
• Work to develop cross-category bundles: Use local, provincial, or statewide information to inform retailers about successful cross-category promotions you have observed. Build trust by recommending products outside of your own portfolio. Add cross-category suggestions and product differentiators to product bios to help justify purchases. Keep it concise. Include a QR code that lists attributes and directs to the certificate of analysis (COA).

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