Ever heard of loyalty programs? This marketing strategy allows brands to offer special offers, discounts and points to their consumers as a reward for brand loyalty. The strategy is being used by regulated marijuana retailers in Canada as well as in the United States.
Providing these perks to loyal customers comes at a price, but operators of loyalty program assert that the benefits easily outweigh the costs.
Recent data provided by Headset, a cannabis analytics company based in Seattle, demonstrates how loyalty programs influence shopping habits. According to Cooper Ashley, a data analyst from Headset, nearly 50% of marijuana stores in the state of Washington use a loyalty program. Over a three-month period, the average basket spend among retailers who had loyalty schemes was 13% higher than the average spend by customers who did not have loyalty programs. This ends up being almost $38 in additional spending.
Additionally, loyalty program baskets were found to have more commodities per basket with moderately higher commodity prices. Ashley stated that this was a notable advantage to having a loyalty scheme, as consumers tend to have bigger transactions. Ashley also explained that majority of the time, if a store was gathering consumer data, it would be connected with a loyalty program.
Understanding how loyalty programs influence consumer behavior could be used to aim promotions to the most valuable consumers of a store.
Planet 13, a marijuana dispensary which operates in Las Vegas, provides a loyalty member program that is accessible by out-of-state shoppers and also serves residents of the state, offering in-state shoppers extra benefits. All who take part in the loyalty program receive text-message notifications about deals and can accumulate reward points with purchases made.
Planet 13’s VP of sales and marketing noted that residents from Nevada were given a 20% discount off items that are regularly priced while loyalty members were allowed access to the store promotions such as daily deals.
In Canada, a major marijuana retail chain that owns various store brands including Canna Cabana and High Tide operates a loyalty scheme known as Cabana Club. Andy Palalas, the company’s chief revenue officer, stated that the country’s restrictions on using incentives to sell marijuana prevent the company from providing certain loyalty benefits. Despite this, however, other perks, such as giving a 5% discount on items that are regularly priced, are allowed. Palalas asserted that simple discounts helped increase loyalty program sign ups.
Another factor that is likely to impact client behavior is the rapid advances being made within the medical cannabis segment. For instance, RYAH Group Inc. has brought to market devices that leverage technology so that it is possible to precisely control the dosage of medicinal cannabis products such as dry herb, which is inhaled. Such devices are likely to make more patients comfortable taking cannabis medicines, and this will impact product sales.
NOTE TO INVESTORS: The latest news and updates relating to RYAH Group Inc. are available in the company’s newsroom at https://cnw.fm/RYAH
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