California Management Review
California Management Review is a premier academic management journal published at UC Berkeley
by David Salisbury
More and more brick-and-mortar stores are closing up shop, simply unable to compete with Amazon’s online convenience and express fulfillment/home delivery. As more legacy brands begin to transition to Amazon’s online model, once plentiful malls and storefronts are vacating worldwide. The demand for in-person shopping is simply disappearing.
However, there is still preference for in-person sales in one market that is still actively finding its footing and future in the mainstream American market – Cannabis. As more and more states are legalizing marijuana sales and possession, fans and medical clients of marijuana are discovering the joys of finally being free to enter safe, professional, and legal facilities to purchase the relief and fun they seek. In Michigan’s first two weeks of medical-use legalization, the state amassed $3 million with many dispensaries completely selling out of product.
Sure, it’s tempting to sum up these in-person store sales as a novel blip in the still very-dead physical store sales model. But if one looks at what dispensaries specialize in that other stores do not, you’ll see that their hands-on, intimate, and fun sales approach creates customer enthusiasm and loyalty that ensures survival and profit for the finest dealers. What can mom-and-pop shops and big name titans still hanging on to store leases learn from Big Weed’s middle people?
Many of the people working in the cannabis industry remember the sometimes-dangerous, always-illegal means one had to go through to procure product pre-legalization – Random sketchy houses or apartments, strangers on the street who could be undercover police, in a car in some vacant lot with someone who is clearly carrying a gun, etc. This wasn’t even for major weight – For $20 worth! Needless to say, a means of safe, legal dealing is an absolute luxury for people who had to endure the dangers of prohibition. And the best budtenders – the expert sales staff who recommend choicer products, know the science of what they’re selling, and walk through the medicinal and psychoactive effects for partiers and legitimate patients alike – take their responsibility very seriously.
Thus the lesson is not only to move product, but know the benefits of it. Studies show most dispensary staff are only trained for sales and know little about the science. What differentiates a successful dispensary that gets positive Yelp reviews and a less-frequented one is how much you’ll hold a novice-customer’s hand to find what they need. Many who visit a dispensary have no knowledge of what they’re looking for. They never experienced the sketchy prohibition-era sales world and are looking to have their many questions answered. Indeed, if any sales-based business wants to stand above the rest, they should be ready to go the extra mile and deliver the best consultations and hand-holding possible. Dispensaries thrive on loyal customer bases.
Even more, many customers are looking for a safe and comfortable place to enjoy their product. As a car enthusiast might enjoy racing with friends at a track, a gun enthusiast enjoys firing off rounds at a safe indoor or outdoor range, or a rock climber might prefer to test their skill and equipment in an isolated climbing studio with trained staff instead of a wild, unpredictable mountain setting, the novice to intermediate customer might prefer a contained, professional environment to explore the cannabis world.
Thus some dispensaries also act as smoker’s lounges, where they have staff on-site to wait on people who seek specific experiences. Barbary Coast, a recreational sales and use lounge in San Francisco, is the first Amsterdam-style coffee shop allowing on-premises consumption in California. The atmosphere they provide is classy with 20s-style leather booths and polished wood upholstery. It’s a relaxing environment to bring friends, to discover what type of product works best for you with in-person consultations, or to just enjoy a quick coffee break next door to work (if your work allows that). In the same vein that a cool guitar shop will let enthusiasts and musicians noodle away on potential purchases, or a small hip boutique will play the latest Millennial/Gen Z jams and hang out with shoppers to find what style meets them (while offering comfortable couches and beers for knackered significant others who got dragged on a shopping date), treating your customers like welcome guests rather than a mark to push products onto will do a world of reputation building. It’s better to not be seen as just a purveyor of goods, but a choice location to enjoy.
Live DJs, sample tables set up for browsers to test out candy, topicals, drinks, etc., video game stations, even live events like concerts and barbecues on April 20th (the stoner Christmas), dispensaries cater to the fun, leisurely culture surrounding the cannabis world. Some dispensaries have art exhibits to show customers as they wait, or even art nights where customers can paint and create while imbibing. Movie nights, standup comedy open mics, meet and greets with professional growers or cultural icons like Tommy Chong, etc. – the pot world has endless avenues of fun to incorporate into a pleasurable physical visit.
Dispensaries are no stranger to online order and delivery competitors. Express home delivery firms like Chill, Crave, Mountain Remedy, etc. are moving in on the market, forcing many dispensaries to begin their own delivery or express pickup options. However, for clients fresh to the expansive marijuana world, the in-person buying experience is still the gateway to discovering what strains and mediums are what they’re looking for. Other brick-and-mortar businesses looking to survive in the digital age would be wise to follow a dispensary’s still-thriving tactics for success.