It was certainly a challenging year, but for Canadian cannabis retailers, 2020 was also a period of remarkable upward trajectory. According to Statistics Canada’s year-end figures, Canadians bought $2.62 billion worth of legal recreational cannabis products in 2020—that’s more than double the amount (+120.5%) they purchased the year before.
Simultaneously, e-commerce was growing at an unprecedented rate—not just in the cannabis space but across all retail sectors. Statistics Canada reports that retail e-commerce sales increased 70.5% in 2020. In December alone, online sales hit $4.7 billion, indicating a 69.3% year-over-year increase from 2019. While this can be attributed mainly to COVID-19 and its impact on in-person shopping, e-commerce adoption was already ticking upward before the pandemic hit and it will only keep going in that direction: according to the Brookfield Institute, 34% of Canadian retailers say they are either likely or very likely to increase their online sales capacity following the pandemic.
A Data-Driven Approach
One thing is becoming increasingly clear: if you’re a retailer, you aren’t just in the business of selling hockey skates or light bulbs—or cannabis, in the case of my own company, Choom—you’re really in the data and insights business, or at least you should be.
Whatever you’re selling, you should be taking a data-driven approach to decision-making. A quick web search will show you that when it comes to e-commerce platforms, businesses have a seemingly endless array of options. Choose wisely, though, because the fact is that many third-party e-commerce sites, like the ones most of the cannabis industry is using, simply are not going to give you enough data to fully understand your customer and develop custom solutions to meet their needs.
Look for an e-commerce system that will enable you to gather a robust data set, which in turn will translate into a deeper understanding of your customer, likely resulting in greater online sales. Understanding your customer traffic, for example, might allow for the optimization of your delivery radius thus maximizing sales.
Test and Learn
At Choom, we developed our own proprietary e-commerce system, meaning that, unlike with a third-party plugin, we have complete control of all of the data we gather. This gives us a completely objective view of the business and its performance. It also enables us to make the kind of data-backed decisions that will drive the success of our operations, including its growth and ability to not only serve, but accurately forecast, the products our customers want to buy.
We advocate taking a “test and learn” approach to data-driven decision-making. In other words, try new things to see if they work. The data will tell you whether they did or not, giving you insight into the performance of aspects such as marketing campaigns and content as well as the products on your site. When you completely control your data, you have the agility to respond to it in real time and to best meet customer needs.
To best serve your consumers, you have to really know them. How did they get to your site? What are they spending their time looking at in your online store, and how long are they doing it? Armed with this knowledge, you can make informed decisions that keep existing clients engaged, help you find new ones, and even impact the products you have on-hand in your brick-and-mortar location.
Make It Seamless
Our clients tell us that the experience of shopping on our site just feels like Choom, and I couldn’t think of higher praise. It’s really about authenticity.
Consider your omnichannel customers—that can be narrowly defined as those customers who shop both online and in-store. A broader definition might be anyone who comes into contact with your brand at any touchpoint, be it in-store, on social media, or through email or a newsletter.
From a customer’s perspective, the transitions between all of these touchpoints should be seamless. The omnichannel consumer should be able to rely on having the same shopping experience no matter where they buy from. Your e-commerce platform, for example, should look and feel like part of your store—a part that just happens to be situated online and not in a physical location.
It shouldn’t seem like an afterthought, nor should it be one. Too often, cannabis retailers funnel all of their resources into the brick-and-mortar side, which is why COVID-19 and its attendant retail lockdowns threw many of us an unexpected curveball. When provinces began to declare cannabis essential and started to allow click-and-collect service, not every retailer was set up to pivot to e-commerce or delivery.
The key is to think digital from day one and frame your digital infrastructure as an integral part of your business strategy. E-commerce isn’t a side hustle or something supplemental to your business. It is your business.
You don’t have to develop your own proprietary e-commerce platform like Choom did, of course, but don’t make the mistake of under-developing the digital side of your operation. Like Canada’s retail cannabis sector itself, e-commerce is only going to keep growing in the years to come, and you will need the right tools—and the right data—to grow along with it, enabling profitable sales.
The maturing Canadian cannabis space has ever-evolving regulations, which have been exacerbated by COVID-19, and thus resulted in the migration of more customers online. In a post-pandemic world, harnessing the power of e-commerce and client data will be more important than ever.
Corey Gillon is CEO of Choom.