As the unofficial April 20 cannabis holiday approaches, cannabis companies are preparing for a surge in sales. This year, 4/20 falls on a Wednesday, so retailers can expect busy spikes to start in the days prior to the actual holiday.
Most companies spend months preparing for this period, and cannabis businesses estimate that sales increase by about 30%-50% on April 20th alone. Making 4/20 the biggest cannabis shopping day of the year!
In this article, we cover the top three tips every retail operator should know to make their 4/20 a success:
- Prepare for increased competition. We can’t stress this enough. All shops will be running specials, and although your customers generally have loyalty to your brand, hot specials, and good buys may lead them elsewhere.
- Market your specials ahead of time. Most retailers spend months gearing up for the big 4/20 holiday. To ensure you’re getting the message out, utilize omnichannel marketing strategies to reach your target audiences.
- Stock up! We’re talking about stocking up on product, staff, and security. It’s great if you have a ton of product on 4/20, but if you don’t have enough staff to efficiently and quickly move people through, their customer experience journey will be poor and doesn’t offer a great first impression of your business operations for new customers.
- Bonus Tip! Track KPIs and data analytics to improve business performance. We’re talking about measuring wait times, average transaction dollar amount, new vs. returning customers, conversion rates, and more! This is a great time to get into the nitty-gritty of your data analytics.
Tip #1 Prepare for Increased Competition
The cannabis landscape has drastically changed since the pre-pandemic days. More and more states continue to legalize cannabis, and more and more retail shops pop up every day. The competition in various markets throughout the US is fierce. And while you may have a strong brand and loyal customer base, everyone is pushing the envelope, trying to capture the largest market share, generate new customers, and increase revenue over the holiday.
That’s why we recommend preparing for 4/20 by reviewing your data. There are some excellent data science programs on the market that can assist operators by analyzing pricing and sales margins. Operators can even find ways to increase sales and margins by comparing product assortments from neighboring competitors. For more information on our data science programs, reach out to schedule an appointment with one of our trusted financial analysts at GreenGrowth CPAs.
Tip #2 Market Your Specials Ahead of Time
Your loyal customers will come to you, but there’s also a potential for new customers to have a huge impact on your 4/20 revenues. So as part of your 4/20 preparation, you’ll also need to consider advertising to market your specials.
All retailers will have discounts, product bundles, and other specials to attract new customers to their location. The most successful operators must outperform the marketing coverage from competitors and provide a key in-store experience. How? Start preparing yesterday!
And be sure to scope out your competition. Who’s offering what specials and is your operation staying competitive with the neighboring market?
Consider doing a pre-4/20 flash sale to capture customers who may not want to wait until the big day to buy their product. Although people are emerging from their Covid-19 homebound existence, many people still may want to stay out of the crowds on 4/20. They may bite if they feel the sense of urgency and opportunity to get a better deal ahead of time.
Ever considered a social media contest? This is an excellent opportunity for you to generate some traffic and excitement on your social media platforms by offering a fun contest with free giveaways. Check out our YouTube video for tips on creating a successful social media campaign under current cannabis regulations.
Also, be sure to purchase branded swag to give out when people visit your location. Marketers recommend cheaper items that have a longer shelf life so you can reuse them for other events and don’t run the risk of stuff expiring. It’s a great way for people to remember you and creates a favorable first impression for new customers.
Tip #3 Stock Up!
Stock up on inventory, staff, and security. Be sure you have enough employees working the days leading up until 4/20 as well as the big day! This year, retailers are preparing for the 4/20 holiday by ensuring they have enough product to meet demand. For example, Greenlane Holdings Inc., one of the largest distributors of cannabis products in the U.S., is expecting a 30% increase in sales this year. And they are actively preparing for the holiday by increasing inventory and hiring additional staff.
If you’re located bordering a neighboring state that is not cannabis-friendly, you may be even busier than expected. For instance, New Mexico recently launched its adult-use program, and bordering dispensaries anticipate a huge holiday turnout from their Texan neighbors who cannot legally purchase product on their side of the border.
Think of the 4/20 holiday as an “All Hands on Deck” team collaboration. Be sure you have enough staff and security to manage the influx of customers, especially during busy times when people can start to become irritated. Keeping your employees safe is every operator’s first priority. But you also want them to have fun! Create a sales contest for your budtenders to cross-sell items and upsell customers when they’re picking up product. Get them onboard and have them help you drive more sales!
This may also be a great time to consider alternative service options, such as “curb-side” pick-up or online ordering to help people get in and out quickly during the holiday surge.
Track KPIs to improve your business! It’s crucial to measure wait times, conversion rates, new vs. returning customers, average transaction amounts, etc. By analyzing your KPIs, operators can determine whether or not they are on track to meet their monthly goals and annual objectives. Not only that, it’ll help you be better prepared for next year!
Our data science program lends operators the ability to analyze their data from multiple perspectives. In addition, we can provide recommendations on how to make your business more profitable.
How do I get started?
While restrictions related to the COVID-19 pandemic have eased in recent weeks, businesses are still focusing on selling flower, concentrates, edibles, and other products.
To learn more about our data science program and prepare for the 4/20 surge, reach out to 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.