MJBiz Magazine August 2021

Page 66

BestPracticesInRetail | Solomon Israel The Source uses promotions to draw consumers to its cannabis retail locations in Nevada. Courtesy Photo

Setting $ale for Success How promotions, discounts and markdowns add flexibility to retail pricing strategy


etail cannabis pricing with agility to modify the isn’t a “set-it-andperceived value of forget-it” exercise. their goods. “A pricing strategy must Boost Traffic, Basket Size be agile because nobody The purpose of a promotion has a crystal ball,” said is to keep customers coming Leandra Reid, co-founder back “and to keep things of Toronto-based cannabis fresh,” Reid said. “When you retail consultancy Vetrina Leandra Reid think about a promotion, Group. “We can’t know it’s something exciting, it’s what the customer is willing adding value.” to pay for a product until we put the Promotions can be planned around product in and do some trials.” events such as 4/20 celebrations and Reid outlined three store anniversaries, or they can touch tactics—promotions, discounts and on a seasonal theme. markdowns—that provide retailers

66 MJBizMagazine | August 2021

Like other consumer packaged goods, pricing for marijuana products should never be static. Successful cannabis retailers will take advantage of in-store promotions, at-the-register discounts and inventory-clearing markdowns to accomplish a variety of goals: • Promotions don’t have to involve price cuts. Instead, they can add value via bundling, seasonal connections or lifestyle associations to boost store traffic and basket sizes. • Discretionary discounts can be used to reward preferred customer groups or to smooth over a customer’s less-than-perfect retail experience. • Markdowns of underselling products might be expensive, but they can free up cash for new inventory. Sometimes, the cost of markdowns can be mitigated by asking suppliers to share the risk of an unproven new product.