MJBizMag August 2021 - 67

" An easy way to start is looking at
your calendar and seeing what holidays
are available, " Reid said.
She added that promotions can also
be based around a new-product launch
or an in-store brand activation with a
supplier's sales representative.
Promotions don't need to rely on
price cuts. Instead, they could involve
product bundling to add value-for
example, bundling certain products in
a visual merchandising display.
Like markdowns, Reid said
promotions can also be used to level
out a retailer's inventory, such as
offering a two-for-one special.
" If you have extra product or
something and it's not selling through,
if we can bundle it with a product that
is selling, or we can display it through
visual merchandising so that it looks
like it's a pair of products, then we can
level the inventory that way through a
promotion. "
Promotions are important for driving
store traffic, said Jeff Yapp, CEO of
Chalice Brands, which operates seven
Chalice Farms marijuana retail outlets
in and around Portland, Oregon, and
recently acquired five more stores.
" We actually do a lot of lifestyle
associations, " he said. " We give people
recipes, we give people situational
usage (ideas)-that's an element of
promotion. But at the same time, it has
nothing to do with price. "
Yapp said cannabis brands help
fund most Chalice Farms promotions,
covering up to 50% of the cost of
promotional pricing.
On top of driving traffic, promotions
are also useful for boosting basket
sizes and getting customers to spend
more, according to Candice Beten,
director of merchandise planning
and allocation at The Source, which
operates four dispensaries in Nevada.
" At the end of the day, those two
pieces are what drives your top-line
sales, " she said.
Beten said The Source analyzes its
promotions to see how they perform
across different stores.
" Did we have the
inventory to maximize
the promotion? How is
the margin? Did it hurt
or erode other product
categories? Because
sometimes, when you
offer a strong promotion,
the customer gravitates
to that promotion instead
of something else-so it
almost trades them down, " she said.
Promotions can
be used to bundle
products, creating
larger basket sizes.
Courtesy Photo
Jeff Yapp
" We might decide to
discount that product
when the customer is in
the store, because they're
buying the display item
instead of a boxed and
sealed item. "
Discounts might be
applied to cannabis
products that are no
longer fresh. They
can also be offered
Customer Retention
In contrast to promotions or
markdowns, discounts take place
at the cash register and may involve
discretion on the part of store
management, Toronto retail consultant
Reid said.
She gave the example of a customer
who buys a bong that has been on
display, meaning the box has already
been opened and the bong is no longer
brand new.
to preferred customer groups such
as seniors, veterans or students, if
allowed by local regulations.
Reid said discounts of 10%, 15%
or even 20% are the norm. Higher
discounts might be offered only to the
most preferred customers.
" We don't want to liquidate the
product and not get the profit margin
off of it, " she said. " It's really to
support customer experience and
say, 'Hey, you're special, and because
you're special, we're going to provide
you with a token of our appreciation.' "
August 2021 | mjbizdaily.com 67
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MJBizMag August 2021

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