Cannabis Retailers Turn to Click-and-Collect Model Amid Crisis

How the cannabis industry could survive the COVID-19 crisis

Ottawa, Canada - April 25, 2020: Customer picks up an order of product through a window at the Hobo Recreational Cannabis store in the Market as Cannabis shops were ordered to stop instore sales in Ontario to comply with the COVID-19 measures.

Shopping has become an experience out of a science fiction movie. Face masks, social distancing signage, and friendly recorded messages reminding everyone to keep their distance are the new normal. Except it’s still weird. 

The ability to purchase a product online and have it delivered or pick it up curbside bypasses most of the weirdness. 

Continue Reading Below
Continue Reading Below

That may explain why the online purchase of essential medical goods is seeing explosive growth according to data collected by Common Thread Collective. 

COVID-19 aside, click-and-collect also avoids annoyances both in-person and online purchasing can’t. Curbside pickup offers all the ease of online shopping with a fraction of the wait time. 

Continue Reading Below

Spend ten minutes shopping and pick up the goods sooner than they would be delivered. You click and collect. It’s as easy as it sounds. 

Continue Reading Below
a bar graph of ecommerce sales amid covid-19 by Common Thread Collective

Source: Common Thread Collective

Continue Reading Below

Click-and-collect has been a lifesaver for businesses, including cannabis retail stores. While it is not a comparable replacement, it is a supplemental strategy bound to increase in popularity for the long-term. 

COVID-19 Opens the Door to Click-and-Collect for Cannabis Industry

Pre-pandemic, state regulations governing cannabis transactions varied. In most cases, delivery has not been an option. Curbside pickup wasn’t even on the table. 

Continue Reading Below

Once states started shutting down their economies but leaving cannabis stores open, regulators realized that pot customers were entitled to the same safety measures other industries were providing.

Continue Reading Below

That’s why state after state implemented emergency rules allowing click-and-collect as a way for cannabis consumers to pick up their product.  

Continue Reading Below

But click-and-collect purchases were making headlines before the pandemic.

In Canada, the provinces of Alberta, Saskatchewan, Manitoba, New Brunswick, and Ontario amended their cannabis laws to allow click-and-collect.

Continue Reading Below
Continue Reading Below

What the Cannabis Industry can Learn from the Grocery Industry’s Use of Click-and-Connect

Before, the thought of grocery shopping conjured images of coronavirus swarming grocery carts and cash registers. Going to the grocery store was still stressful enough to keep people buying food from restaurants instead of making their own meals. In 2019, dining establishments surpassed grocery stores in sales

In response, grocery stores like Kroger and Walmart implemented click-and-collect options for their customers, and it changed the game. It doesn’t take a deep market analysis to understand why the percentage of regular online grocery shoppers jumped from 38% in 2018 to 56% in 2019

Continue Reading Below

The demographic with the most grocery spending power are families with kids. The parents of these families enjoy the low friction shopping experience click-and-collect has to offer because figuring out what to do with your kids while shopping—or using your precious free time to go to a grocery store—is stressful. 

Continue Reading Below

The technological implementation of click-and-connect has presented the most significant hurdle to smaller grocery stores. This explains why large corporations like Walmart, Kroger, Target, and Amazon are enjoying the bulk of online grocery success. However, companies like Instacart and Shipt are providing grocery stores with the option to outsource. 

Continue Reading Below

It might be an entirely different industry, but cannabis businesses can learn a lot from the grocery industry’s implementation of click-and-collect in a COVID-19 world. 

It provides income-saving flexibility. An infrastructure that allows click-and-collect can keep businesses afloat when in-store purchases are shut down. 

Continue Reading Below
Continue Reading Below

Consumers like it. They enjoyed the convenience of click-and-collect before the pandemic. They are relying on it even more now that shopping in-store comes with the risk of contracting or spreading COVID-19. 

Outsourcing the service makes it accessible to small businesses. Mom and pop shops with limited technological infrastructure may balk at the thought of implementing click-and-collect software. They can hire another company to do that for them. 

Continue Reading Below

Cannabis designation as “essential” provides political leverage for future cannabis policy. The consumer demand for cannabis during the COVID-19 crisis has made it clear that cannabis is a life-sustaining medicine. Cannabis advocates can cite this historic moment moving forward as a reason to allow cannabis retail stores the option to provide delivery and curbside pickup services. 

Continue Reading Below

The COVID-19 crisis has made the need for purchasing flexibility clear. When normal shopping habits return, click-to-collect services can help a business grow. During a pandemic, they can keep the business alive. 

Continue Reading Below

Click-and-collect hasn’t completely killed the in-store sales

Despite its convenience, click-and-collect hasn’t fully replaced in-store sales. When the stay-at-home orders were first implemented, cannabis dispensaries saw a boom in sales. Panic buying led consumers to make large orders quickly out of the fear that dispensaries would be shuttered. 

Now that cannabis businesses’ across many parts of North America have been deemed “essential,” consumers are buying less. Some retailers—most of which are mom and pop shops, are ill-equipped to shoulder the financial burden of a quarantine—are facing the option to close their doors or sell

Continue Reading Below
Continue Reading Below

An additional hurdle, as usual, is federal prohibition. U.S. Cannabis businesses remain excluded from Small Business Association loans, making them ineligible from the CARES Act—the COVID-19 relief bill funding businesses negatively impacted by the virus. 

Click-and-collect has certainly helped these struggling businesses continue to generate an income and some may find it helps get them through this crisis. But, without the foot traffic promoted by a brick-and-mortar store, dispensaries are losing the gains they made at the beginning of the shelter in place. 

Continue Reading Below

Click-and-collect has been successful in other industries before the mandated stay at home orders. While it’s not an ideal permanent substitute for in-person shopping, click-and-collect has kept businesses afloat and exposed consumers to a novel convenience. Post-pandemic, it may be here to stay. 

Cannabis Retailers Turn to Click-and-Collect Model Amid Crisis was last modified: by