Retail sales management is a form of art, according to Lilach Mazor Power, founder and CEO of Giving Tree Dispensary, an Arizona-based, vertically integrated cannabis company.
Retailers cannot rely on one single tool to navigate promotions, increase sales and keep traffic flowing smoothly through their stores. Instead, Mazor Power says dispensaries must keep a variety of tools in their merchandising toolbox to achieve these goals.
Here, she provides some of her top tips to help other cannabis retailers build a well-thought-out merchandising strategy.
Editor’s note: Lilach Mazor Power will speak at Cannabis Conference from 2 p.m. to 3 p.m. on Thursday, Aug. 25 on the “Quick-Fire Tips Session: Make The Most Of Your Merchandising” alongside Airfield Supply Company Chief Marketing Officer Chris Lane. The session will cover dozens of merchandising takeaways from retail and cannabis industry experts. Visit www.CannabisConference.com for more information and to register.
Melissa Schiller: What are some best practices for merchandising to keep traffic moving smoothly through the dispensary?
Lilach Mazor Power: At our dispensary, it’s very much of an open floor concept. We encourage people to walk in and just walk around. We create displays in different areas of the floor that people can actually stand next to or sit next to. We have cocktail tables [where] you can have a one-on-one [conversation] with a budtender, as well. It was all about, let’s create a place where people want to hang [out] and not just a transactional environment. It’s all about walking around the floor, lots of displays, lots of cards with information, [and] areas where they can gather either with their friends or with our salespeople.
Because the customer can walk around, the salesperson will meet them, educate them, discuss what they want to do, recommend whatever they recommend, and then they send the order to the back. All of our inventory is in the back, and at that point, the inventory packager will prepare that order for them and then they will call them when it’s ready to do the actual transaction, which is the payment portion of it.
MS: What are some strategies for running special promotions?
LMP: That’s an interesting topic in our industry because I think we’re not doing it right, to be honest. The first mistake with pricing discounts or specials is that, as we all know, in the past 18 months, everything costs all of us 30% to 60% more. That’s across every industry. Everything costs more. But every other industry is increasing prices, and in our industry, we are experiencing the race to the bottom. We did not increase prices, and we’re still discounting heavily because our industry often is built to scale and not to last. People are not worried about their profitability. They are just trying to get top revenues, so then they can sell it for x of that top revenue. People who are trying to build to last have to actually look at their EBITDA, their profitability, which means it doesn’t make sense financially to participate in all of these discounts. Every brand wants to do buy one, get one or 40% off, and that just kills our business model.
On the retail side, we really control it. First of all, we’re not going to try to win this game by being part of the race to the bottom because we are a single store. That means no matter what happens, I will never have the same buying power as Trulieve or Curaleaf down the street. So, I have to be able to compete on something else [other] than pricing. Even though I let brands offer specials to my customers, I don’t offer it often. I don’t make them compete against each other. So, if there’s an edible one day, there’s a concentrate on the other. I make sure I have a team that’s educated and loves our [in-house] product first, so my ratio of vendor product versus mine is where we want it to be, [which is] about 50%.
Then, we have a deal with our vendors, with our brands that we carry. If you want to do a BOGO, we’re not going to do it every week, but here’s the date you can do it, you’re going to need to sponsor it, and we’re going to need it up front so I’m not carrying the cost of their marketing frenzy. We make sure that we stagger them, we make sure that we let them take on the cost and not us, and we do 10 other things to make sure [the promotions are] not the only reason why a person would choose to come to the Giving Tree.
MS: What are some merchandising tips for increasing sales?
LMP: First and foremost, I think it’s really creating a loyal customer. We do that by different things. The first one is how we welcome a person to our store and how we greet them when they leave. It’s always, “See you next time” or “See you tomorrow,” whatever we can do to say, “We see you and we’re looking forward to seeing you again.” It starts there.
We have a team that’s passionate and educated on everything we have at the store, and that means when you walk in, the first thing we’re going to ask you is, “What are you trying to achieve? What are your comfortable ways to consume?” And the third thing would be your lifestyle. With those three questions, we make sure we are not going to offer you 30 items, which is only going to confuse you. We limit it to three to five items that we think are going to be best for you.
By having that educated, focused product offering for each person, I think, most chances, we’re going to nail it. Whatever you were trying to reach, whether it’s sleep or it’s getting high, we’ve got the right product for you, so you’re going to come back for it. Second is you’re not going to be overwhelmed or thinking, “I have no clue what I just took home,” because we really educated you. And third, we’re not here to upsell. We’re here to match you with the right product because we believe that people will come back once they find the right match for them.
It’s a bit of a different mentality for us, but I think it’s been working because we track how many people come back, and our percentage is much, much higher than what we see in the industry here.
MS: How do you approach staff training to ensure that your employees can provide that focused product offering for each customer?
LMP: First of all, we let brands come in once a week [to explain their products] and our team is available to come in and listen. They don’t have to, but it’s open for them. Second, they try everything we sell. We make sure that they have the personal experience. Then, we also do marketing training once a month on the different brands and what we do and what makes us different. Then, we also bring consultants [for] outside training. For example, next month, we have a retail salesperson to watch them and give them pointers one-on-one for the whole week.
MS: How can dispensaries use merchandising to optimize sales for lower-selling product categories?
LMP: At our store, we believe in display, and we believe people want to shop with their eyes. We sprinkle lower-moving product with the best sellers so people will see it. The more they see it, the more they ask about it.
When we have products that are not moving, first of all, we ask the team why. Is it a quality issue? Is it just a category that’s not selling? Or are they not educated or don’t get the product? So, we make sure our salespeople are trained and educated on those products.
Second is the display, where we put them. We have a case for slower-moving product that we discount a little bit, 10% off, so people will get used to that case having product that is on [sale] and they ask about those. “Oh, what’s for sale today?” So, it makes it move quicker and we don’t have to offer a huge discount on it.
What we’ll also do is we have a conversation with that brand. We have a program for them. We say, “Here’s what you have done in the last 90 days. We need you to move this quicker. So, we’re going to let you come in once a week and have a brand ambassador on site to have access to our customers. We’re going to let you sponsor it or we’re going to let you do a discount days to educate. You need to also support your marketing strategy to tell us what else you can do to make sure it moves, and you are now on a 60-day program to make sure that you move this product.”
Now, not everything is going to be a top seller. We also know if we have cream, it’s not going to move as quick as prerolls, and that’s OK. We do support products that are unique and are not as fast moving. We have data on how quickly we want every category to move. We’re not expecting a capsule to move as quickly as flower.
We also sell display area, display cases, so people can lease a space in our store and showcase their product. We have a full program that will tell them, with this program, this is what you get. They have different levels of “Brand Spotlight,” as we call it, and they’re able to do that, which will get them a better spot on the shelf.
MS: Do you have any tips on how to create a welcoming atmosphere at the dispensary while also having appropriate security measures in place?
LMP: I don’t know what other people do with security, but I know when we did a survey here in Arizona, that was one of the things that people mentioned, that they are afraid to walk into dispensaries with [a] security [guard] with a gun at the front. So, that is something retailers should think about.
We have security on site at all times. We have them trained over and over again on how to diffuse a situation instead of [shooting] someone if something happens. Everyone knows that if someone comes with a gun, we give them the key to the safe and we walk away. We do not risk any human’s life for money or weed. But if certain areas have to have [armed guards] or it’s part of the regulations, then I suggest not to have that person stand right at the door. Have them stand where they can watch everything but they’re not scaring the customers and making them feel like they’re walking into a scary store or something they should fear. It's like when you walk into a bar. If there’s a gunman right when you walk in the door, you’re like, “Oh, it’s that kind of place.” It’s already in your head.
MS: What do you hope attendees will bring back to their businesses from your session at Cannabis Conference?
LMP: My biggest hope as a retailer, especially as a single, standalone store, is that people will understand that increasing sales does not have to be part of discounts. There are other ways to win, especially if you want to win the war, not just the battle, because we have to make sure we’re profitable, we have to make sure the customer has a good experience, and we have to make sure we are responsible operators. We’re not just pushing whatever to our customers—we’re pushing the right thing. My goal is [to have] people understand that retail sales management is art. We can’t just have one tool in our toolbox, which is the race-to-the-bottom discounting. There are many, many tools, and if we use a holistic approach and use all the tools together, that’s when we win.
Editor’s note: This interview has been edited for style, length and clarity.