Unprecedented e-commerce opportunities have presented themselves to the multi-billion-dollar cannabis industry. Increasing in popularity, e-commerce is significantly influencing and accelerating cannabis businesses globally. From the back-end operational side to consumer purchases on the front end, e-commerce is being implemented in every stage of the process.
There has been a recent uproar in consumers using mobile applications to schedule deliveries or curbside pickups. Cannabis retailers are adapting and developing apps to facilitate purchases. Common strategies implemented by most retailers include using a consumer-focused design for consumers to filter and find the right products based on their preferences. They can also see reviews and ratings from other consumers on those products. Compared to feeling overwhelmed in a physical store location, e-commerce provides consumers with a calmer, straightforward purchase method. Another factor typically marketed by cannabis retailers is the discretion that they provide through the online buying experience. Consumers do not have to worry about being seen at a physical cannabis retailer, avoiding any worries of discomfort.
E-commerce has also allowed cannabis retailers to expand their consumer base. With applications, consumers ranging from those too busy to physically unable to travel the distance can make purchases online. Retailers have also implemented after-hour cannabis delivery available exclusively through their e-commerce platforms. The increase in accessibility and convenience has helped e-commerce-based cannabis retailers develop their presence.
Other primary benefits of cannabis e-commerce implementation include:
- Positioning the company for growth and expansion.
- Optimizing operational effectiveness and performance.
- Enabling better reporting and analysis to manage the business.
- To increase data access, transparency and visibility internally.
- Accelerated business operations using integrated, innovative cloud software solutions.
- Leveraging and existing ERP solution to expand business beyond the current operational scope. This could mean maximizing the ERP system through enabling the ability to have a faster sales turnover coupled with strong backend operations. confirming customer satisfaction and operating with a customer centric approach.
Risks and Technical Issues
Although this shift in implementing e-commerce may present multiple advantages, there are some risks to consider. Risk factors include data privacy concerns, technical issues and conflicts with laws and policies in jurisdictions. With data privacy, most e-commerce platform users worry about how their data is collected and used. Concerns related to whether the government is using this collected data, tracking user locations, tracking driving and reading personal files have some users avoiding the use of e-commerce – specifically platforms relating to buying potent substances such as cannabis.
Technical issues also exist with relying on e-commerce platforms to facilitate sales for Cannabis. These issues include weather outages, security breaches and hacking. Lastly, regulatory issues exist with new emerging technology starting to be used in various industries with strict regulations. Specific to the cannabis industry, regulations have to do with handling, transport and sales in general. Retailers in the e-commerce space have limitations to how much cannabis their delivery drivers can carry and the maximum a consumer can buy in a day. There is room for consumers to find loopholes in the system and purchase past their daily purchase limit. Cannabis companies using e-commerce platforms have identified these risk factors and are finding ways to overcome them.
Coupling the growing demand for e-commerce with consumer wants and needs in the cannabis industry, retailers have used a customer-centric approach to ensure they can keep up with this fast-paced industry. A few strategies they have implemented include feedback gathering, mobile browsing, second-party logins, multiple payment methods and 24/7 access to customer support. As we look at the near future, the use of e-commerce in the retail space of cannabis will continue to grow. Using these working strategies and implementing new, improved platforms would help retailers stay ahead of the curve.
If you are considering using e-commerce to improve your customer experience, Withum’s Digital and Technology Transformation Services Team can support your endeavors. Our team has experience in optimizing/modernizing your technology and enhancing your customer’s buying experience.
Considering using e-commerce to improve your customer experience? Withum’s Digital and Technology Transformation Services Team has experience in optimizing your technology and enhancing your customer’s buying experience.