In Store

Design & Merchandising: Transitioning The Dispensary To Specialty Retail

Philip M. Cohen takes an in-depth look at becoming a specialty store

In order to make a great first impression, the design of a retail cannabis dispensary should project cleanliness, contribute to a relaxed but professional and tasteful ambience, deliver a premium in-store experience, be ADA compliant (comply with access to the built environment for persons with disabilities), have an on-site ATM, provide a privacy/consultation area, an education space, brochure materials, and appropriate signage.

There are many different ways to create beautifully designed and welcoming environments. From minimalistic, industrial-chic settings that employ cement floors and steel and glass shelving that minimize start-up investment, to the use of natural woods, exposed brick, polished mahogany, leather furnishings, crystal chandeliers, up to and including custom-made futuristic back-lit cabinet design, dispensary owners can create the style, personality, and environment that becomes the store’s brand. However, no matter the physical trappings of the dispensary, there needs to be a well thought out floor plan that allows easy access and navigation of the physical space, ensuring a well ventilated area, well lit and accented with natural light as well as targeted lighting for product display and visibility.

From space planning to display case design, all in-store design elements combine to create a specific look and feel that should reflect the store’s brand statement and add to the customer experience. That includes the use of lighting and natural light to make the dispensary warm and inviting instead of cold and clinical. The choice of music is essential to set the tone for the in-store experience. The type of seating and seating arrangement to accommodate wait times; ancillary products such as clothing and accessories and the choice of signage in order to educate the customer all add to the in-store experience.

 

Merchandising

Because there is no second chance to make a first impression, the look of your store plays an important role in your business’ success. But, once you’ve chosen the floor plan and store design, it’s time to focus on merchandising – or properly curating the customer experience. Merchandising is the term that refers to a wide scope of business and marketing strategies involving the use of ambient tactics – usually attractive displays – to present products to consumers in appealing ways in order to improve sales. This requires planning supported by customer research to ensure that your merchandising will resonate with your customers, engage them and get them to buy-in. Techniques may include stand-alone displays, in-store demonstrations, promotional pricing, shelf-talkers, special offers, signage, and other point-of-sale methods.

 

Visual Merchandising

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In-store such activities are often called visual merchandising, which is a key strategy for bringing products to the attention of consumers while on-premise and helps to encourage impulse buying. Impulse sales are a proven way to add additional products to any sale because they are unplanned purchases.

 

Successful visual merchandising:

  • Places product or product information in a highly visible area of the store
  • Tells the product story visually through graphics and effective signage
  • Provides plenty of promotional materials that emphasize product benefits
  • Creates a positive in-store experience centered on the promoted product

 

A proven way to capture customer attention is through the use of in-store digital signage, which allows you to deliver more relevant information to individual shoppers. These displays can be run by third-party networks, which offer wholly informative and professionally produced educational programming; while interactive displays use RFID and touchscreens to deliver product-specific content looked up by a customer onsite. In either case, signage should include product and branding information along with promotional details that let shoppers know more about your products.

The use of informational signs, both static and digital, enhances the shopping experience by educating the customer and helping them to find products in the store. A product display that showcases a brand’s collection of products another way to help optimize customer attention and draw in-store traffic to a certain area of the store to see products they would not ordinarily come across.

Then there is point-of-purchase signage, which is generally used to advertise specific time-limited promotions, but can be very successful in drawing consumer attention when placed in front of the store, in well-traffic areas, customer service areas and store windows. These can include but are not limited to shelf-talkers, channel strips, floor graphics, ceiling danglers, posters, counter signs, and window posters.

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When preparing visual merchandising:

  • Include specific details about the products and promotion.
  • Communicate succinctly  – signs should be able to be read in less than five seconds to ensure the message gets across.
  • Use a “call to action” – tell customers what you want them to do.
  • Choose a visual merchandising strategy that best suits the physical layout of your store and how your customer traffic flows through it.
  • Establish metrics to quantify the results of your visual merchandising and the success of various offers (e.g., compare before and after average basket size, in-store traffic patterns, sales lift, anecdotal customer satisfaction).

 

The way in which products are merchandised (presented in-store), ultimately determines what product moves out of the door and how quickly it goes. A few merchandising tips that experts say consistently motivate consumers to spend more money include:

 

Providing Variety

Options, if they are not overwhelming in number, create an opportunity for sales. Having to decide between products engages shoppers in an “either-or” buying decision as opposed to choosing whether or not to buy.

 

Refreshing Product Location

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Rotating merchandise around the store gives shoppers the feeling that there is always something new to discover, while showcasing new arrivals in front of the store brings customers in the door. Displaying clearance merchandise in the back of the store directs foot traffic pass merchandise displays they might otherwise miss. Capturing the customer’s attention and focusing them on the newest, most popular and best limited-time deals converts inventory to sales more quickly.

 

Co-branding

By featuring a brand collection of products in a central or highly trafficked part of the store, you can call attention to a new product line your store is offering and create the opportunity for a customer to make multiple purchases from that collection.

 

Presentation & Easy Access

The placement of products can influence customer traffic flow through the physical layout of the store and encourage them to explore parts of the dispensary they may not have otherwise walked through. But care should be taken to pleasantly display the merchandise in a way that also gives the customer easy access, making it easy for them to see and choose the right merchandise for them. Even if it may not have been something for which they had been originally shopping.

 

Promotions

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Showcasing products with special sales prices also motivates many consumers to make purchases if it appears to be a good “deal.” This is the way that bundled merchandising can be used to tell a brand story while upselling your customers on related products for a better-perceived value.

In the properly curated store, merchandising is more than just a visual experience. To help create a memorable customer experience you need to engage as many of the senses as possible. Music is a powerful way of creating the right ambiance and tempo to set the tone for that experience in the same way that appropriate products should be positioned in an accessible area that invites them to be touched and interacted with, particularly higher profit margin products that should be showcased at eye-level.

 

Positioning the Dispensary as a Specialty Retailer

As dispensaries become mainstream, it is imperative that operators begin to visualize themselves as specialty retailers. There are approximately 400,000 specialty stores operating within the U.S. with combined annual sales of $350 billion. The market is dominated by large national players like Best Buy, Gap, Sports Authority. While, on a local level, specialty retail is dominated by independently owned unique shops that express the personality of their owners who are often those who have a passion for what they do, like working with people and products they love.

Specialty retail stores are retail businesses that focus on specific product categories, such as office supplies, plus-size clothing, kitchen, bath accessories or flooring. The defining element of a specialty store is the breadth of product available in the niche it serves. However, an important differentiator of a specialty retailer is also the fact that store management and staff are all passionate about what they do, are knowledgeable about the products they carry, understand and can converse about comparable product results, and are up to date about trends in their industry.

This depth of knowledge allows budtenders to upsell and help create future demand for products that will deliver better satisfaction over the long-term, which in turn creates consumer loyalty and subsequent word-of-mouth that is the foundation of a strong business. Be clear, when selling products and services for a little more money than the competition, while providing a higher level of service, is not gouging it is creating value. Armed with this knowledge, it is up to the retailer to help the consumer understand why the products stocked in the store represent a range of “best possible solutions” for the customer. It is important the opportunity be taken to deliver a compelling educational and in-store experience that the competition cannot hope to meet.

 

Specialty retail is about engagement and giving shoppers compelling ways to interact with products. It’s about bringing customers in the door, but also about connecting with them and intriguing them in such a way that they will want to return.

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In short, a specialty retailer is a place to go for guidance and expert advice on the products they carry and be treated to a great shopping experience. And, it’s not about price. Consumers are willing to pay more for the convenience of having expertise that reassures them about their purchase. Specialty retailing is about the ability to identify customer needs, educate customers about better, create value, write profitable business and repeat the experience with every customer, every time.

 

To be a great specialty retailer dispensary management must:

  • Understand and meet or exceed customer expectations
  • Positively contribute to customer perceptions about the value and quality of their in-store experience
  • Manage customer complaints swiftly to resolution
  • Engage and communicate with customers to enhance retention

 

 

About the Author

Phil Cohen

Philip M. Cohen is CEO of CMN Holdings, Inc. and their subsidiaries, Cannabis Medical Network, a digital media network airing in cannabis doctors waiting rooms and Cannabis Lifestyle Network, airing in dispensary waiting rooms. Phil has operated a dozen ad supported digital signage networks in doctor offices and at retail since 1985 and is a past Chairman of the Digital Signage Federation. 

 

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