February 28, 2022

How to increase dispensary sales with customizable online discounts

February 28, 2022

All dispensaries want to stand out from the pack and attract more customers. That’s why we’ve expanded our discount options and offerings so US retailers can be creative, expand their promotions, and better engage with online shoppers. Let’s explore the psychology of consumer expectations and how it transfers from typical retail to the cannabis market. 

Increasing dispensary sales with strategic price discounting

Flat-rate Specials are great, but they can be spiced up to lead to bulk purchases. Usually, flat-rate Specials drive the day of the week or limited deals that entice customers to come in at specific times. These standard deals can be customized to make consumers want to buy more during one shopping trip. Flat-rate Specials can be helpful to use around the holidays or when looking to refresh your inventory.  With these types of Specials, you can still control the duration of the sale on your admin page. These are great for short-lived sales, touching on cultural moments, or making room for bulk sales. 

Bundling products and discounts together has been promising for retail businesses for some time now. Nike and Ray-Ban, for example, advertise discount models that make consumers want to buy more. The idea is: Why buy one at full price when you could buy three and save? For these brands, the deals could be for purchasing multiple pairs of shoes or sunglasses. While you only have one face and two feet, you could stock up for yourself or share some as gifts for friends. 

Retailer spotlight: Costco

Costco runs on a model that states bigger is better too—as do wine subscription companies that sell by the case. This phenomenon also includes cannabis, because black market dealers used to give discounts to those buying in bulk. Customers are encouraged to buy an eighth over a teenth, a quarter over an eighth, a half-ounce over a quarter, and so on because the value is more appealing. Plus, most consumers will end up using what they purchase before it dries out.

Bringing it all together

The Costco example is a wholesale brand that sells in bulk as an advantage over the name-brand competition. This applies to cannabis because those that are vertically integrated, meaning they own a part of production in addition to retail and therefore benefit more from selling their own brand. This is something to consider if it fits your business model. Either way, you may want to run promotions on products that are easy to group without creating any compliance issues, like half ounces of flower or infused sodas sold by the 6-pack.

Scaled deals or bundles mean moving inventory quicker and keeping stock newer and above the curve for retailers. U.S. cannabis brands are rapidly creating new and innovative products to live up to trends, user hype, and demand. Moving your inventory in bulk means:

  • Fresher, newer stock with more appealing harvest dates
  • The ability to try out new brands & products faster on your shelves
  • Keeping up with consumer interest (your shoppers will trust you to have the hottest items)

Dutchie’s new Ecommerce Sales and Offers functionality provides dispensaries even more flexibility to create unique Sales and Offers for their consumers. These new features will allow retailers to create matching in-store on online Specials so that shoppers and staff have a seamless experience during the redemption process. Because nothing is worse than losing a customer who doesn’t want to wait for a manager to approve a deal. Discounts should be as easy for the customer to use as they are to offer.

Think about your stock and sales history to determine which of the following discounts would work for your state regulations and your audience.

  • Items for a price: Dispensaries will be able to put one or more items into a Sale and have the ability to apply a global discount to all items to discount them to a specific price point. Additionally, this type of reward can also be applied to conditional offers.
  • Minimum spend: Dispensaries will be able to create a minimum spend condition that customers will need to reach in order to qualify for the Offer (spend $100 or more and get X). 
  • Discount on the cart’s value: Dispensaries will be able to place a total discount on a customer’s cart as a reward for fulfilling the conditions of an offer (buy X, and get 15% off your total purchase).

You can ensure that customers utilizing these incentives are generating a minimum level of revenue before discounts are applied to their purchases. You can also apply discounts globally across an entire purchase. We’ve found that consumers that redeem Offers can have up to 30% higher basket sizes than those who don’t. Feature your own brand on your Ecommerce Specials page or promote high-margin brands to maximize your profit.

Make sure taxes are clear to the shopper

For dispensaries that have the taxes included in the product price on the menu, the deal will show with a slightly higher price, including tax. Here’s an example: buy 1 ounce and get any pre-rolls for $5 each, the $5 pre-rolls will be shown as a higher price to the end consumer, like $5 base+$1.70 tax=$6.70 menu price. If you prefer to include taxes on menu prices, consider mentioning within the Specials Card that prices shown include MSRP+tax.

For more information on each type of deal and how you can use it, stay tuned for our upcoming Specials Cookbook guide.

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The Dutchie Squad