(Download a complimentary copy of the report referenced below here.)
CBD consumers buy from a wide range of online and brick-and-mortar stores. To date, consumers have been shopping brand websites (31%), online retailers (24%), and natural foods stores (21%), plus cannabis dispensaries (31%). But we’ve reached a pivot point. Many convenience stores have embraced CBD and, thanks to the misadventures of Curaleaf with the FDA, we all know CBD has begun permeating into drug store chains like CVS. Can and should food stores participate as well? Numerous chains are already testing the waters.
But if grocery stores are to fully capitalize on the CBD boom, two consumer groups will be key: current CBD consumers looking for trusted, familiar sources and potential CBD consumers seeking lower prices and easier access.
Where is the fit?
Over half (54%) of current consumers have used CBD for less than one year. Thus shopping routines and loyalty haven’t cemented. Nor are these consumers necessarily happy with today’s options. Thirty-two percent would be more likely to buy from a grocery store if available. Further, a full two-thirds of current consumers are open to CBD products from well-known brands. Encountering CBD at a local grocery store, if properly executed, will not be off-putting.
New consumers will fuel explosive growth in the CBD market. Per our latest study, roughly 40 percent of U.S. adults would try CBD. Grocery stores are positioned to leverage two motivating factors reported by potential consumers: lower prices (46%) and easier access (42%). Potential consumers want accessible prices and familiar products. Packaged baked goods (cookies, etc.), chocolates, capsules, gummies, and candy make up the top five most desired products for these consumers. All are well suited to spanning a range of price points. Grocery stores also solve for easier access by having a “location, location, location” in closer proximity to consumers than many specialty stores and cannabis dispensaries. Not that this will matter much until the FDA takes a position, but these are the longer-term growth scenarios some brands are contemplating.
How to execute
For any of this to work, stores must address a gap in education and trust among consumers. Grocery stores aren’t the first go-to for consumers seeking personalized service and recommendations. For that reason alone, chain stores with hundreds of locations don’t look like a promising fit for tomorrow’s CBD consumer. But stores for which customer engagement is part of the chain’s identify? With aisles of wellness products? That could work. Consultative front-line employees have a gap to fill: fewer than twenty percent of current CBD consumers express confidence in the information printed on pack. Similarly, only one third are confident in the safety of CBD products.
Stores should take a multipronged approach to solving such concerns via in-store communication, consumer-friendly online materials, and upskilling associates. Shoppers need to feel that the stores they shop and the brands they are growing to trust are working to reduce if not eliminate the trial-and-error process of finding a well-suited CBD product currently entails. And for that to happen, CBD brands will need to borrow from the consumer package goods market: investing in collaborative marketing campaigns, building online educational material with (or on behalf of) retail customers, and presenting personalized promotions.
Questions? Comments? Contact Mike directly via [email protected]
(This post originally appeared on Cannabis Business Executive.)
