• Jeffrey Harris

2020: The Year of Cannabis E-Commerce

When it comes to consumer habits, nothing is more prevalent or lucrative than online shopping. Mainstream marketing studies have shown that 2019 U.S. online retail sales reached approximately $365.2 billion and are projected to explode to nearly $600 billion by 2024. Customers are drawn to the convenience, personalization and variety that e-commerce offers in a shopping experience.


In recent years, cannabis transactions have broken through various regulatory barriers and finally entered the e-commerce space. What was once a cash-only brick and mortar experience has evolved into a tech-driven operation that utilizes advanced POS systems and dispensary technology. Cannabis consumers seem to have enthusiastically embraced these developments. In fact, recent data from clients that have integrated e-commerce platforms into their businesses has shown that the average store has increased their revenue by 52% and up to 130% from January 2020 until now.


A few factors can explain the spike in online cannabis purchases. First of all, t the country is in the midst of an unprecedented health crisis that has fueled more socially distanced shopping behaviors. The number of new users ordering online has increased 142% since February. Delivery orders are also rising as delivery sales have increased 46% since February and 115% since January.


Many dispensaries have had to adjust their business models to accommodate local health and safety regulations. Features like delivery or curbside pickup that were once bells and whistles are now essential to staying in business. In the past few weeks, stores offering both pickup and delivery services have seen delivery rise from 26% of sales to 33% of sales. Demand will certainly keep rising in the coming months considering how many new states are implementing more stringent restrictions on social gatherings.


The second reason for the uptick in e-commerce transactions comes from the existing demand for online cannabis shopping. Even in January, average customer sales had more than doubled for springbig clients. Customers expect to be able to buy toiletries and groceries with the click of a button, and cannabis is no exception.


Now the question remains, how can retailers seamlessly transition their businesses to an online platform without sacrificing the human touch of the dispensary experience? Industry veterans would argue that dispensary brand loyalty can often depend on its staff. However, unique features like personalized budtender consultations and bespoke product recommendations can still take place online. Tech-savvy retailers can offer budtender consultations over live or video chat on the company’s website.


Additionally, product recommendations through existing POS systems can be easily converted to add-on recommendations at check out. Dispensaries should be sure to fully integrate their existing loyalty programs with e-commerce platforms to optimize both customer shopping experiences and cannabis product marketing. This way, if a customer with a loyalty membership online shops under their account, the dispensary can make appropriate product recommendations off of the customer’s previous purchases and boost sales and engagement.


Once this period of uncertainty eventually subsides, e-commerce will likely be the industry standard in cannabis retail. The latest rise in demand for shopping for cannabis online is only the beginning and dispensaries should take all necessary measures to adapt to these retail trends.


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