The holiday season is just as important for cannabis as it is for other areas of retail, with Green Wednesday (the day before Thanksgiving), Black Friday and the leadup to Christmas all driving sales spikes in 2021, according to Surfside’s The Season of Green report. While cannabis may not jump out as a key holiday category as much as toys or electronics, the surge in sales still makes it an important time of the year.
“From a marketing perspective, why would you ignore the activity happening?” said Eric Meth, Chief Revenue Officer at Surfside in an interview with Retail TouchPoints. “You might as well ignore 4/20 if you’re going to ignore the holidays. This is when you’re capturing sales. It’s when you’re going to make or break your year. It’s when you’re going to be able to capture that mindshare.”
While cannabis is a unique business in many ways, it ultimately behaves a lot like more traditional retail categories, particularly consumer packaged goods, pharmacy and spirits, according to Meth. Cannabis retailers have their own ups and downs during the holiday season, but they learn a lot from following the marketing practices their mainstream counterparts have already honed through decades of experience.
Cannabis Sale Spikes Span the Holiday Season
Green Wednesday is one of the biggest days of the year for cannabis sales — it was up 72% last year compared to the average day in November 2021. Cannabis can be part of the holiday for many shoppers just as much as food, alcohol and other indulgences, making Green Wednesday one of the key days on any cannabis retailer’s calendar.
Cannabis retailers also can expect their fair share of interest from the usual Black Friday sales spike. Cannabis sales were up 62% on Black Friday 2021 compared to the average November day, and the same approach traditional retailers utilize to draw in shoppers has a role to play for cannabis marketing and promotions — with an added emphasis on working with distributor partners and educating shoppers.
“Make sure you’re really in sync with any trade marketing, because marketing is part of that path to purchase cycle that you have to leverage to make people aware that you’re there,” said Meth. “But that cycle continues once they’re in the store. Do you have signage set up? Are you doing patient appreciation days or customer appreciation days with specific brands? Are your budtenders adequately promoting products that are relevant to consumers? A left turn or right turn can happen and can completely steer that potential sale off to another brand or off to another retailer. It’s important to always be looking at your data and sales trends.”
The most challenging holiday for cannabis during this period is Cyber Monday, when sales actually fell 1.86% compared to the average November day last year. However, it still offers an opportunity for retailers where delivery is allowed, as these companies can deliver on convenience on a day when most shoppers are browsing for sales from the comfort of their homes rather than traveling.
“I think as more people become familiar with the category, the convenience factor becomes way more apparent and that’s one of the ways delivery platforms are benefiting,” said Meth. “Again, it all starts with retail marketing and brand marketing. Delivery platforms are doing a lot of that for the upper funnel awareness and getting people involved. Then once they’re familiar with the category it’s just a matter of, ‘Hey, I know that this brand is not available at any store near me but I can get it through this marketplace that has a delivery option.’”
Sales Keep Ramping Up Through the New Year
Average December sales are about 10% higher than October or November, and business gets even busier for cannabis retailers as the month goes on — in 2021, sales during the Dec. 16 through 31 period were 29% higher than the Dec. 1 to 15 period in 2021. These trends hit their peak on Dec. 23 (up 56%), Dec. 24 (up 40%) and Dec. 31 (up 54%) as shoppers stock up for the month’s major holidays.
Making the most of these final weeks requires the same strategies that help retailers excel earlier in the holiday season. Understanding what shoppers are buying and why, and presenting them with compelling offers while delivering on convenience, can ensure that the home stretch of the holiday season remains profitable.
Additionally, cannabis retailers should pay particularly close attention to their end-of-year performance in 2022. The industry was still coming off the black swan of the pandemic, when cooped-up shoppers had more cash and were on the lookout for at-home recreation, at the end of 2021 — which threw off projections as they headed into 2022.
“A lot of these cannabis operators fully anticipated that 2022 was going to have that same upward trend,” said Meth. “Then there was a big pause after Q1, where collectively most marketers in the space asked, ‘What’s going on? Why are my numbers down? Why am I so far off forecasts? How come January isn’t X% over December?’ We’re a retail market at the end of the day. All of these elements that were driving a lot of that growth started going away. People started going back to work. The restaurants opened, retail shops opened, people were going back to their normal lives. So you had this natural settling point.”
Now that shoppers have mostly returned to their normal habits, cannabis retailers can get a better idea of how the holiday season and new year’s periods will operate under relatively normal conditions. This insight can provide the foundation for strategies and preparation that will help budding retailers thrive in 2023 and beyond.