Learn how to optimize your retail cannabis discounting strategy in today’s new blog post.
Many operators in the cannabis industry are finding the growing competition intensify as legalization increases and cannabis retailers are opening more and more locations around the country.
But what makes your cannabis dispensary different from the one down the road? In today’s blog post, we give you some ideas around creating a discount strategy that will not only set you apart from the local competition, but increase your market share and revenues. Here’s how!
Why set up a retail discount strategy?
When deciding whether a discount strategy will work for your cannabis retail location, it’s important to first review company goals. Whether you’re looking to increase your average order value, increase your ticket sales, attract new customers or improve retention, a discount strategy could work for you!
And best of all, it can definitely help you boost profitability in your location. Now let’s take a look at some common bundle deals you could leverage in your shop.
Common Bundle Deals
Same product bundle
A product bundle is when a customer purchases 2 or more of the same product. By offering a discount, customers see value in purchasing multiple products at the same time. For instance, if you normally sell pre-rolls for $10 each, consider a bundle where if you buy 4 for $35.
As a consumer, you feel as though you’re receiving a great deal to purchase the extra pre-roll that you want anyways. And as an operator, you’re able to increase your ticket sales and create customer loyalty all in the same transaction by giving your customer a roughly 10% discount.
Other popular bundle deals to consider also include BOGO and mix & match options. Check out the table below for some additional examples.
Remember to take a look at your analytics, what do customers purchase together? Could you give a discount by bundling a couple different options? If you need help reviewing your inventory analytics, reach out to one of our trusted representatives to set you up with a free demo.
Tiered Discount Strategy
Another option frequently used by successful retailers is a tiered discount pricing strategy. According to the data, most retailers find the best margin in the Discount Tier 1, with an up to 20% discount. However, Discount Tier 2, in the 20-40% off range offers the biggest ticket value. Smaller discounts will serve your shop better in the long-run, whereas larger discounts can put both your margin and average order value at risk.
For more information, check out the scenario below we ran for one of our clients.
For more tips on discount savings techniques that can increase your revenue, be sure click here and download our FREE Cannabis Retail Discount Strategy Guide. To learn more about optimizing your discounting strategies, financials, and more contact our team of financial experts at GreenGrowth CPAs. We are here to help your cannabis venture through any level of the accounting, tax filing, or business cycle.
We employ several financial programs to assist the company with its fiscal responsibilities, including tax planning and compliance, outsourced CFO support, audit preparation, tax controversy support, and much more.
For recommendations and assistance with tax planning and accounting services, schedule a free consultation or contact us at 1-800-674-9050.