order size

For many medical and recreational retailers, the decrease in customer foot traffic during the pandemic has significantly affected business operations and revenue. Considering how there is still a steady demand for cannabis products during this time of heightened uncertainty, retailers should consider implementing dispensary marketing strategies that increase average order value in order to protect their bottom lines.

The average order value is calculated by dividing a dispensary’s total revenue by the number of orders and shows business owners how much an individual customer is spending on each transaction. At a time when the number of orders may be decreasing due to national social distancing guidelines, it is more important than ever for dispensaries to incentivize customers to stock up and spend more per transaction. Below are four marketing strategies that will not only boost average order value but will also increase dispensary brand loyalty long-term.

Offer free delivery–at a price

Dispensaries providing delivery during this period should consider increasing their free delivery threshold. This threshold can be calculated by taking the current average order value and increasing it by X percent to offset other losses or meet internal growth goals. For example, a retailer can go into their POS system and see that the current average order value during the pandemic is $50, but they need to increase the amount by 30% to make up for other operational losses. As a result, the dispensary offers free delivery across the city on orders of $65 or above.

Customers stocking up on products or buying products for roommates or family members that they are quarantined with can usually meet this higher delivery requirement. Since most retailers have transitioned to an e-commerce platform, it may be easier to encourage customers to pull the trigger on higher valued carts by recommending add on products or reminding them that they are only a few dollars away from free delivery at checkout.

Perks for new customers

Unprecedented circumstances often translate to consumers turning to new experiences or outlets to relieve their heightened anxiety. According to cannabis e-commerce platform Jane Technologies, the number of new users ordering online increased by 142% in March. Dispensaries offering delivery and curbside pickup services should provide attractive deals to these new patrons, as new customers almost always boost average order values.

Several first-timer loyalty tips we’ve previously mentioned, including offering free gifts, bonus loyalty points or a discount on future purchases can also be utilized now. Retailers who still want to incentivize new customers to spend more on their first purchases can lower the free delivery threshold or offer a 15% discount on orders over the store’s current average order value. Since many first-timers may be unfamiliar with the dispensary’s selection of products, retailers can also offer them free VIP budtender consultations and train budtenders to encourage new customers to try a wide variety of products.

Bundling deals

For mainstream retailers, bundled deals often come in the form of buy one get one free offer or buy four items and receive a gift for free. While dispensaries have been using this promotion method for some time, they can double down on this cannabis product marketing strategy to drive average order values. For lower-priced items or brands, dispensaries can offer a buy five prerolls get one free deal or sell a curated basket of goodies from a particular brand that is priced at $50 when the cost of buying each item separately costs $65.

In these economically challenging times, creating added value in the consumer experience is critical to maintaining long-term customer loyalty. Bundling deals not only help move inventory for retailers but also allows customers to stock up in a thriftier way.

Raising the stakes on volume discounts

Volume discounts, such as get 15% off purchases of $30, are tried and true methods of increasing customer spending amounts, but in this period of extreme consumer habits, it may be worthwhile for retailers to up the ante on higher volume discounts. Dispensaries should still offer reasonable discounts, such as $15 off purchases of $50, but create lucrative discounts for known big spenders. If the retailer’s POS system shows that a select group of customers are prone to buying luxury products or hundreds of dollars of product at once, it may benefit them to offer discounts like $100 off orders of $600 or 30% off orders over $1,000.

These deals will target higher spenders who are also trying to stock up and may encourage a group of customers to put in a collective order to redeem the discount. Some consumers may have their online cart ready to go but are hesitant to check out after seeing the order total. In these instances, retailers can set up their store websites to show the amount customers have saved before the order total to reinforce the added value of their purchase.

At the end of the day, consumers are still looking to buy cannabis and retailers can benefit from this demand by offering attractive deals that will boost the average order value. Utilizing these cannabis brand marketing tools show customers that retailers are taking their financial circumstances into consideration while providing a truly essential service.

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