by Gary Cohen, Cova Software
Despite the pandemic, the cannabis industry has proven to be recession-proof and has grown exponentially over the past few years. Cannabis retail sales in the US are projected to top $30 billion in 2022, and as more states jump onto the legal bandwagon, competition will intensify. As such, dispensary owners must ensure that they are using data and analytics strategically to measure the health of their business. Many cannabis retailers fail because they don’t track crucial dispensary metrics or make avoidable mistakes.
Cannabis dispensary metrics are the data points that you must track regularly to help in better decision-making. Business intelligence reports generated via these metrics help you monitor your daily dispensary operations and create projections for future sales and required inventory. A robust cannabis POS system with advanced analytics and reporting capabilities collects information from various sources and unifies them into a single repository so that you can extract maximum insights for the growth of your retail business. By tracking some of the following important metrics, you can implement strategies to increase dispensary profits, enhance employee productivity, forecast inventory, and elevate the customer experience.
Cannabis Sales & Profits Metrics
Number of Products Sold per Transaction
Average Sales Value
Total Sales for a Period
By tracking the average basket size and transaction value, you can evaluate your customer buying habits and ideal price points and create your marketing and promotional campaigns or upsell opportunities accordingly. Implementing strategies will help you increase these metrics, manage inventory and employees efficiently during your busiest sales periods, and thus, grow your dispensary profits.
Staff Productivity & Dispensary Traffic
Individual Budtender Sales
Busiest Sales Days/Hours
Discounts and Refunds
Tracking individual budtender sales on your POS system will help you determine your top performers and aid in staff scheduling. Those employees who have higher sales per transaction must be scheduled during your busier hours of the day, and those who may not be performing can be offered training on strategies like deals, upsells, cross-sells, and bundles. Also, potential fraud can be identified by tracking discounts or refunds offered by employees.
Target Market & Customer Retention
New vs Returning Customers
Customer Lifetime Value
Segmenting your target market helps design a more customized experience based on age, location, values, buying behavior, etc. By tracking each customer’s average number of transactions over a period of time, you can determine their lifetime value and better tailor your dispensary’s promotions and upselling strategies through targeted marketing campaigns. These metrics help curate an enhanced shopping experience and increase customer retention.
Inventory & Product Performance
Top-selling Product Categories
Inventory turnover measures the number of times you sold through your entire inventory in a given period and allows you to determine how much of your cash flow is tied up in inventory. Shrinkage is the difference between the inventory you have on paper and the actual inventory in stock and helps you identify theft. Also, tracking your top-selling and lowest-performing products or categories can help in crafting strategic promotions and better inventory planning decisions.
Keep up With Changing Times
Successful cannabis retailers track top-selling products, profit per product, and all other metrics highlighted above, and use this data to make business decisions. If you have a robust and flexible cannabis retail platform that offers you these detailed data insights and can scale and adapt when needed, your dispensary will always stay ahead of the curve.
Learn in detail about all the mistakes to avoid and secrets to succeed in the cannabis retail industry by downloading Cova Software’s e-book, “Why Some Cannabis Retailers Fail”, which presents cautionary tales of what not to do if you want to thrive in the dispensary business.
Gary Cohen is the CEO of Cova Software, the fastest growing technology brand in the cannabis industry. Cohen’s focus has been driving the company’s overall strategy, including its vision, go-to-market plan, and strategic development. Since joining the cannabis industry in 2016 and launching Cova commercially in 4q17, Cohen has led Cova to dominate the enterprise sector for dispensary Point of Sale, while forging client relationships with hundreds of single-store retailers across North America.
With Cova’s cannabis POS and its excellent integrations with eCommerce and delivery services, the online order automatically pops up for the budtender to tender the sales, and the POS system updates inventory once payment is approved. Cova offers multiple eCommerce solutions to choose from, as per your needs and budget, and you can legally sell cannabis online stress-free while staying compliant with strict government regulations.
The post Member Blog: Key Metrics to Track & Mistakes to Avoid for Cannabis Retail Success in 2022 appeared first on The National Cannabis Industry Association.