Understanding the 4.20 Consumer

The complete report can be found here if you’re a subscriber and if not we’ve summarized a few takeaways here.

 

We all know 420 is a massive time for discounting and our customers will expect retailers to offer promotions and deals. In the US, the categories that see the greatest velocity tend to be more communal (beverages and pre-rolls), indulgent (concentrates), Vapes, tincs, topicals, and capsules (from the wellness category) specifically for a consumer target looking for something consistent and doseable.

It’s about trying something new, sometimes partying, etc. In Canada, we see similar patterns with beverages, edibles, concentrates, tinctures and topicals.

When we took a look at YOY Category Basket Penetration we saw 30% of customers have a pre-roll in their basket. If you can drive that from 30 to 40% on this holiday you’re going to add incremental revenue. With Canada’s recent launch of concentrate pre-rolls and in the US multi-pack pre-rolls this might be easier than you think. Retailers, if you can adjust your impulse sections to include these top categories you will be able to drive up the average basket.

What was especially interesting was Headset was able to report on demographics this year and hands down we saw Female customers increase their spending on 420 by 140% vs. male which is closer to just double. Gen Z, Millennials, and younger customers are more excited about being in a store and making purchases they wouldn’t normally make. The team chatted through this trend, thinking possibly it was just because they’ll be more comfortable because of COVID? But no, looking into previous years, they just like this holiday damn it which is confirmed by the numbers in each age group consistently coming out more.

Now, that’s all fabulous information but how are we applying this data to your 4.20 promotion? By taking the data and turning it into insights, which then form actionable steps. As with any retail, the quantitative data needs to be verified and informed by qualitative inputs.

 

 

Making sure to take a look at the historical data is very important, noting which competitors have moved into our target area and how dense it has become. One of the biggest considerations is where we are sitting with our inventory; see where you’re properly stocked, improperly stocked, or overstocked.

Ask yourself: What are the inventory planning questions you need to ask

• Do we have the right amount of inventory?
• When should we be buying it to anticipate increased sales?
• Look at where your inventory was last year and consider what were the ‘soft things’ that happened at retail might have impacted it. Were you understocked? Did the OCS short you?

How do promotions show up in-store?

- Impulse, as mentioned earlier, is a fabulous opportunity as the customer is going to be driven to the location and makes a decision in-store. This means from a visual merchandising and marketing perspective we need to make sure that your promotion shows up at least 7 times along the customer journey.

 

 

- Example: emails to your database, text messaging (where allowed), when they get to the store where is the signage, menus, physical displays, in-bag postcards to highlight for your customer teasing what you’re doing.

What Levers do we need to pull?

We know increased traffic is almost a given on 420, but, making the holiday work in your favour is critical to right-sizing inventory, building loyalty, and overall testing and learning around your promotions model.

- Inventory Purchasing - Workback from your inventory purchasing timeline

- Promotional planning - targeted discounts (for specific products dialed in for particular products/slow-moving inventory) or flat rate (entire category ex. Pre-rolls to increase velocity across the total number of units

- Visual Merchandising Strategy - how they physically show up in-store, is not only about customer awareness but a really great tool for your budget. It enables them to connect the right product for the right product cause they’re top of mind/in their faces

- Budtender Training - what are we running, how complicated are we making them, what are they able to sell back to the guest

The final point, maintaining a simplified messaging for both budtenders and customers is critical.

BIG TAKEAWAYS

1. 4/20 sales increase is primarily due to a large increase in transaction volume. Expect nearly double the number of customers that you would normally serve in April.

2. Certain categories performed better than others on 4/20. Make sure to stock up on impulse items; Beverages, Concentrates, Edibles, Flower, and Pre-Rolls anywhere below $20 or even $15.

 

 

3. Basket penetration is a key metric for evaluating product category performance, whether on 4/20 or any other day. Ex. Pre-rolls AND edibles positioned closely together are a great idea.

4. What categories are showing up in the basket, you can take it one step further to analyze what is commonly being purchased together.

5. Trends from previous 4/20 holidays should not be your only data source when preparing for this year’s events. The cannabis industry moves fast and if you’re not keeping up with the most recent trends, you may be left behind.

6. Set clear goals for the day, take note of your current state, then identify which levers you'll need to pull to hit those targets.

That was a lot! But now is the time to solidify your plans, train your people and build awareness with your existing customer base.