The CBD Retail Trends Virtual Conference, hosted by CStore Decisions magazine and CBDRetailTrends.com wrapped up with a pair of CBD market experts helping attendees learn about hemp-CBD consumers and prospective buyers, as well as how retailers can position their CBD products to maximize sales.
CStore Decisions Editor-in-Chief John Lofstock moderated the Day 2 session, welcoming Arie Paup, market development manager for consumer intelligence research firm CivicScience, and Brightfield Group Research Director Kay Tamillow, whose organization analyzes and interprets sales and marketing data for the CBD and cannabis industries.
Tamillow’s presentation, “C-Stores, CBD & Navigating COVID-19,” provided an overview of the current market, breaking down CBD consumers and which products they’re likely to buy at retailers like convenience stores, and showed how the COVID-19 health crisis may prove to be an opportunity for brick-and-mortar retailers to attract new CBD customers.
Education, Service Will Set Retail Stores Apart
Out of the gate she illustrated how the hemp-derived CBD market has grown from a trickle in 2017 to a $10B industry this year with projections to reach nearly $25B in the next five years, according ot Brightfield Group data.
Under those projections, Tamillow showed, e-commerce ($8.5B) will remain the top sales channel for CBD with pharmacy ($6.2B) rising to a strong No. 2 by 2025. C-stores ($1.2B) will be in the mix in the same neighborhood as other outlets like department stores ($1.7B), vitamin retailers ($1.2B) and groceries ($1.0B).
Retail stores will be able to set themselves apart by easing fears and educating consumers face-to-face about CBD products and how they provide therapeutic remedies to mild pain, anxiety and chronic physical discomfort, among other ailments.
And while topical CBD will garner the most sales dollars, other products like edible gummies, tnctures, CBD beverages, vape products and even pet CBD products will fit nicely into the c-store shelf space and customer demographic.
“Drinks are a great opportunity to reach c-store shoppers,” noted Tamillow. “It’s a product customers don’t have to think too much about.”
Plus, with CBD ready-to-drink coffees and flavored fountain drinks among them, beverages offer multiple positioning opportunities across many dayparts – morning, afternoon, something to sip later in the evening.
These products will become even more popular, said Tamillow, as distribution channels become more broad. C-store CBD consumers are 57% male, 42% aged 26-35, and nearly one in three are considered heavy CBD users, consuming the product five or more days per week. Those numbers are a good bet to rise as hemp-CBD sees more mainstream acceptance.
Tamillow recommends that c-stores partner with established, quality CBD product manufacturers – like 7-Eleven and Medterra or Circle K and Ignite. Together, consumers will have access to good products and sound education about how to use them.
Satisfied Customers Are CBD Optimists
CivicScience’s Arie Paup fleshed out the changing perceptions of CBD products, using data to show that most consumers are evenly split in seeing CBD as becoming either a niche product or a prevalent part of life.
The key to those attitudes hinged on the individual respondent’s personal CBD experience. Satisfaction with a CBD product was the strongest driver of seeing it as a prevalent product in the future.
But there’s a GenZ and millennial skew to CBD popularity, somewhat because CBD advocacy happens to a great extent online, where young people make up the most users and social media heavily influences purchases.
Paup’s CivicScience data also showed that satisfied CBD consumers are also frequent c-store customers. In fact, more than half of satisfied CBD users, unsatisfied users and those who plan to use CBD are frequent convenience customers.
Paup also noted that CBD users tend to enjoy food more and cook more. They’re also more tech savvy, according to the data. Product or promotion placement near electronics could pay off in CBD piggybacking on tech sales.
Most importantly, Paup said, retailers should make a strong effort to stay abreast of cannabis legislation. Regardless of demographics and data preferences, those lawmakers can wipe out any CBD market for brick-and-mortar retailers if they don’t know how important that consumer is to strengthening your bottom line.
While the CBD Retail Trends Virtual Conference provided much information to help guide retailers in making the most of the burgeoning hemp-CBD marketplace, robust sales aren’t automatic. Putting the information to work and getting the process moving are ultimately what will determine how well you serve customers. And that is what will put revenue into cash registers.