BY KATE SENZAMICI

The past few years have been quite eventful from macro, retail, and lifestyle perspectives. Healthcare uncertainty; new approaches to health and wellness; growing emphasis on natural products; and new shopper demands, expectations, and values have all been active drivers of change.

Amid it all, a new industry is materializing. In spite of an administration that looked eager to crack down on cannabis legalization, more states, red and blue alike, continue to move forward and evolve their thinking around medical and adult-use cannabis. Twenty-nine states have legalized cannabis in some form, and 12 have marijuana-related initiatives on their ballots in 2018. Canada still has its sights set on national legalization by this summer, and Shoppers Drug Mart (the nation’s largest retail pharmacy, which applied for a cannabis dispensing license in October 2016) has recently entered into three medical cannabis supplier agreements with Canada-based companies Aphira, MedReleaf, and Aurora Cannabis. In the U.S., the size of the legal cannabis industry is expected to drastically increase, reaching anywhere from $24 billion to $44 billion by 2020, depending on advances in legalization.

From a medical perspective alone, research shows that the category already is impacting and reshaping consumers’ shopping patterns. There’s no better time than now to accept the diversity of consumers and product applications and start to seriously consider how cannabis will affect your retail category.

Health and wellness – and cannabis

Approaches to health and well-being are shifting, and have been for some time. For today’s shoppers, healthcare, in general, is a major source of worry: ShopperScape data has shown that more than half of shoppers are worried about some aspect of healthcare, whether it’s cost, health in general, insurance, or access to services.

Complexity, cost, and barriers to access have, in part, prompted shoppers to take health into their own hands, and have fueled a shift from sick care (reactionary, occasion-based) to self-care (proactive, ongoing). More shoppers are prioritizing elements of self-care, understanding that a proactive approach is needed to avoid the high cost of healthcare.

Part of this approach involves more conscious purchasing. Now more than ever, shoppers are paying attention to what they buy, reading ingredient labels, and seeking out items that are minimally processed.

Subsequently, a share of wallet is shifting as shoppers allocate more of their dollars toward better-for-you products. As they do, their demands and expectations around brands and retailers are shifting. More and more, shoppers are affirming they prefer to shop retailers that are transparent about product quality, and that they are willing to spend more money on a brand they trust.

Enter cannabis, which can play within fresh, local, organic, natural, and healthy, across medical and recreational applications, embodying the “growing green” movement literally and figuratively. The plant is a “natural” product, something consumers can grow on their own or buy from local producers, and is, in some cases, rooted in a lifestyle reflected by brands that promote transparency and authenticity. Thus, as support grows and legalization becomes more widespread, cannabis is primed to be a basket staple that will cause yet more shifts in shopper share of wallet.

At the same time, as more discretionary income is shifting toward natural products, more products that tout the benefits of cannabis across applications, such as medical treatment, wellness enhancement, or recreational indulgence, are coming into the mainstream. For example, products containing cannabidiol (or CBD, a major, non-psychoactive compound found in cannabis and hemp plants, and legal in most states) are becoming increasingly popular within the HBC category as a way to promote relaxation and soothe everything from minor aches and pains to migraines, arthritis, or anxiety.

New category, new trip missions

Shoppers’ increased demand for naturals, the influx of CBD products, and the move toward self-care has obvious implications when it comes to cannabis for HBC, beauty, and OTC categories. But when thinking about what categories might be sacrificed for cannabis products, none are quite as obvious as over-the-counter medications and prescription drugs.

We know that drug stores, which rely on the pharmacy to drive trips and the front store to build baskets, have been struggling with store traffic. While pharmacy needs still give shoppers a reason to enter the store for the most part, pharmacy trips aren’t necessarily a reliable source of front-store conversion.

 

Read the full article.