Although the cannabis industry was able to survive recent COVID-fueled supply chain shortages, few industries under the sun can successfully withstand a recession, and in the midst of one, brands and dispensaries are scrambling to remain relevant and successful throughout the difficult times.
Cannabis POS, inventory, and compliance company Cova Software deals with these issues on a regular basis, utilizing their platform and expertise to help brands and dispensaries consistently pivot to exceed the industry’s latest demands.
Leafwire sat down with Cova Software CEO Gary Cohen to discuss the dangers of cutting costs and the importance of brand experience for long-lasting success.
Leafwire: What is brand experience, and how might a brand or dispensary develop this concept in their favor?
Gary Cohen: In the midst of a recession, a big hesitation brands and dispensaries will have is spending more money. However, this is the exact time brands should not only be reinforcing what they stand for, but also executing better than ever on it. And you can do that without spending any additional money.
LW: How might a brand or dispensary begin to approach that?
GC: It can begin by revisiting what their brand promise is. If I open a store and I never clearly defined what the store is about or stands for, or if I’m a manufacturer making just another gummy and there’s no differentiator, distinction, or appreciable added value – you’re in trouble.
This is a good time to revisit what you stand for: it’s all about the ability to convey what makes your brand different. Get clear on that, and align all stakeholders on it. That’s the starting point and costs you nothing.
Secondly, you can look at how the spend you’re currently utilizing is pushing that message forward. How far have you deviated from that brand promise or message? Take a look at your content and marketing – where you’re spending money, and what you’re spending it on. Is your message consistent with what you’re trying to put out there?
Again, this won’t cost your business a lot. It’s more about realigning yourself with what you were trying to succeed with in the first place.
LW: A big problem with today’s industry is oversaturation. How can dispensaries and brands utilize this brand experience to mitigate the effects of oversaturation?
GC: In all cases of failing cannabis businesses, the first excuse people will use is oversaturation. But then, you have to ask the next question. Okay, so you failed, but that guy across the street didn’t. Why not?
In the case of businesses failing, it always comes back to this: they were winging it. They didn’t have a plan or a brand promise. The dispensary wasn’t distinctive or unique at all. And that takes me to the next piece: customer experience. Customers vote with their wallets, so why did they go to the guy across the street and not you?
Brand positioning and brand promise can look like a dozen things: convenience, selection, value, etc. So if my brand promise is the cheapest prices in my region, then I better not have a flashy store in a super expensive location, because that incongruity won’t match up for your customers.
LW: Third-party tech partners are undeniably more popular with cannabis retailers, especially since COVID. How might they be helpful for establishing brand promise?
GC: The cannabis industry has this big technological ecosystem, and there’s a lot that can go into improving operations and the customer experience. When curbside pickup became essential, Cova built a model that efficiently managed it. But, it’s important to make sure everything is going to be cohesive.
If we’re going with delivery, do we have partners who have all regulatory required capabilities to execute that? Do our systems talk to each other, so it’s a seamless, well-delivered experience from end to end? Our brand promise is tied to compliance. Therefore, our “delivery partner” needs to fulfill our promise of providing a completely compliant solution.
LW: How might third-party tech companies be a hindrance to brand experience?
GC: Some of those companies in our space will provide a service with an ulterior motive, like using/selling the data running through their platform. So on every order running through their online set of menus, they’re going to use that data.
Then, over time, they might want to own the relationship with the customers. For example, I put my dispensary on one of these marketplaces, and then the consumer comes looking for Red Mango. The marketplace might say, we have four people on our site with Red Mango, and even if I’m paying them to display my store and my inventory, this other store might pay them more to prioritize them and their products.
LW: With all of this economic turbulence in mind, how can retailers ensure their approach to brand experience is the right one?
GC: It’s simple: just keep reevaluating whether or not you’re delivering by asking your customers why they are or aren’t choosing you. If not, make adjustments to stay true to that promise.
The worst thing you can do is pull back on spending. To remain viable, you have to look at your data and utilize it to make good decisions. What are our customers’ tendencies? What do they buy? When do they buy? How can we smartly push our revenue to best align with their needs?
Another important piece is advertising, marketing, and community outreach. Something we coach people on is going to meet their neighbors, mayors, fire chiefs and clergy and letting them know all the precautions they’re taking to protect kids. It’s a great way to build community support, but a lot of brands will forget and stop doing it after two months.
Cannabis has a grassroots nature: this is medicine, and it’s an industry with a large number of customers who aren’t just buying it to get stoned. I think one of the greatest things you can do is educate your community and constantly reiterate your desire to build a safe environment that gets people to stop buying from “Steve the Dealer.”
These are all simple things you can do, and you’ll notice I haven’t said: “Go spend more money” once.