It is safe to say the challenges presented throughout 2020 were unlike anything the modern world had faced. Social unrest, a global pandemic, and economic troubles stifled billions of individuals and the companies they worked for. Amid this uncertain period in time, many innovators in the alcohol and cannabis industries were able to thrive. As the world took on new challenges, many people turned to cannabis to deal with anxiety, depression, and other obstacles.
Over time, the cannabis industry developed a reputation within popular media as being “recession-proof.” While the cannabis industry has been resilient in times of strife, it is difficult to say that any industry is immune to an economic downturn. This year, several factors have led financial experts to warn the public of a potential recession. Unlike the previous economic downturn of 2020, several cannabis businesses have already been caught in the eye of the storm. To weather the challenges that may come in the near future, retailers and brands must maximize operational efficiency and minimize financial risk.
Cannabis retailers and brands can maximize operational efficiency and minimize financial risk by utilizing the data-driven tools available to them. In California, Claybourne Co., the state’s third-best-selling flower brand, confronted the trickle-down effects of industry-wide pricing compression by utilizing various vendor-retailer intelligence tools, including Headset Bridge. After identifying the specific tools that can help their business, Claybourne Co. implemented an inventory management practice known as VMI or vendor-managed inventory. In return, Claybourne Co. was able to identify supply chain inefficiencies like stock-outs, surplus inventory, and stale products. From there, retailers were able to work hand-in-hand with brands to proactively address these inefficiencies and challenges.
One issue that often plagues retailers and their partners is the pressure to maintain inventory alone. By maximizing vendor-retailer intelligence tools, retailers can relieve this pressure and share this responsibility with their partners. For California-based retailer Kind Delivery, these tools have saved time when purchasing products and helped develop promotional strategies for slow-moving products. For a brand like Claybourne Co., these tools helped get their products into the hands of buyers and expand their business. When working together using Headset Bridge, Kind Delivery saw a whopping 4.41x increase in Claybourne-specific sales in the first month of their partnership.
Navigating the ups and downs of uncertain economic trends is difficult enough, so why not use tools that will alleviate a bit of that stress? Retailers can use data-driven intelligence tools to help drive more efficient workflows and eliminate costly inventory mistakes. Above all else, utilizing these tools will help build strong relationships between retailers and brands. Retailers and brands establish a sense of transparency that builds a sense of trust and teamwork between the two parties. Therefore, neither side feels as if they are taking on an excessive burden alone. Instead, they go through ups and downs together and develop a relationship that will thrive in times of economic certainty and pave the way for a better future.
