How Dispensaries Can Leverage Data Analytics for a Competitive Advantage

The cannabis industry’s supply chain is a treasure trove of information waiting to be tapped into for use at the retail level. This guide provides an overview of data retailers benefit from using, where this data comes from, ways to leverage it, and how to streamline day to day reporting needs. 

Which data should cannabis retailers use?

Competitive cannabis retailers use sales, inventory, and point of sale data to strategically decide how to spend their time and resources. Making effective use of data starts with knowing which sources of information are most relevant to their locations’ goals. We recommend beginning to orient around the following types of data. 

• Sales: Sales data encompasses the revenue you’re bringing in. Use it to drive or validate decisions rather than basing choices solely off of observable trends in your shop. Understanding your sales transaction data shows you a measure of your business’ cash flow, some rich context on seasonality or time-of-day trends, which promotions are driving revenue, which ones aren’t, and more in-depth insights, depending on how you’re able to leverage the information.
  

• Inventory: Finding the right balance and cadence in your dispensary’s procurement is critical to operational management and profitability. Knowing how your inventory ebbs and flows, which brands and product categories leave shelves at higher velocities, and which are slower to move are central figures for fine-tuning a product matrix that keeps customers returning and basket sizes growing.
  

• Customers: Enriched customer insights help improve retention or loyalty, which is beneficial to dispensary profitability. By better understanding the demographics, preferences and behaviors of your most (and least) loyal customers, you can target the right messaging to segmented groups of shoppers to optimize revenue and/or basket size for a given timeframe or segment.
  

• Accounting: Your bookkeeping records are a significant data source illustrating sales transactions, expenditures, accounts receivable, loyalty calculations – and hopefully your profitability as well. Reporting on these records is critical for maintaining compliance in most, if not all, legal cannabis markets in the US. While necessary for staying in good standing with your state licensing board, this information can be used to drive future decisions around promotions, loyalty, internal budget allocations, employee turnover optimization, tax planning, real estate, partnership decisions, and more. 

Connecting dispensary data sources

Various datasets are readily available to retailers to be leveraged within their company’s cloud storage, or they’re collecting dust as attachments within unopened emails from software providers. The challenge in putting this data to work on your strategic decisions is that the listed cohorts of info are contained within non-standardized reports from disparate sources.

Standardize information from across disparate systems to make sense of it for your teams. There are three paramount platforms to standardize: point-of-sale (POS) systems, mandated seed-to-sale (S2S) systems, and inventory management software.

POS systems

Dispensary point of sale software is an important source of both sales transaction and inventory velocity truth. While many POS systems integrate with inventory management systems, they very rarely produce standardized insights, or integrate the data output for leveraging beyond linear, surface-level insights. You’ll get insights like what time of day gets the most foot traffic, or which day of the week sees the highest average basket size, but you’ll need more data to go deeper.

Seed-to-Sale (S2S) systems

S2S platforms offer a complete record of activity within dispensaries’ supply chains, showing where cannabis products are sourced from, where suppliers obtained the raw materials to produce them, and so on. 

It’s a given that this data is crucial for regulatory compliance, so it’s readily available to dispensary decision-makers. However, it’s tougher to design comprehensive strategies when this dataset is presented in different units or formats from other useful data sources, like your POS and inventory manager.

Inventory management systems

Inventory management systems necessarily must integrate with both POS and/or S2S softwares in compliant, licensed dispensaries. In many cases, your inventory system is the keystone to compliance reporting, alongside the two other systems listed here. Not to mention, budtenders and store managers nationwide are spending hours integrating these reports by hand for mandated reporting purposes. This broadens the possibility of human error showing up in said reports, and can put your retail facility at heightened legal risk. The insights available from inventory management softwares are best used when standardized and normalized to make the most possible sense alongside POS and S2S data. 

To curate best-informed business decisions from your dispensary’s data sources, standardization and normalization is needed between all three of these units. This is especially important for operational and promotional decision making at the multi-state level. In many instances, retailers in multiple states will have multiple POS providers, S2S and Inventory Management Systems. 

Green Check Access’ Unified API helps dispensary decision-makers by connecting information from disparate sources into refined, effectual datasets for compliance reporting and competitive cannabis decision-making. The experts on the Green Check team are working daily to engineer a world where all of this data is easily and securely culminated into useful, normalized reports to help your cannabis business thrive. 

Ways to use data to support cannabis retail success

Putting day-to-day dispensary data to work in the context of your business enables you to make better strategic decisions and enhance processes to drive better results. Here are some ways to leverage your standardized data output from the Unified Cannabis API. 

Optimize purchasing, inventory and promotional calendar

Using normalized, historic sales and inventory data, you can shape your dispensary’s outlook in several profound ways, including:

• Tracking the biggest sellers. Knowing how many units of a particular SKU sell, when, at what price, and to whom will help guide your procurement, loyalty and discounting strategies, among others. Determine relevant KPIs to gauge strategic success using the data after launching the strategic initiative. For example, KPIs here can be based around break-even point or profitability from a targeted promotion, as well as brand, SKU, or category velocity.  
• Staff training and increasing basket size. Use integrated S2S, POS, and inventory data to train and educate your retail managers on which products to discount, promote, or have their teams upsell based on shelf duration, break-even goals, or equivalent metric. 
• The right product matrix. Not every item on your menu will sell out. Higher-priced SKUs may not move off shelves as quickly, however, if you’re tracking its GMROI as a key performance indicator, the SKU may be worth keeping in stock. Track success of this and other KPIs more easily by integrating, standardizing, and normalizing your pre-existing data with Green Check Access. 
• Trimming inventory. Integrated data illuminates which products simply don’t move. This is especially relevant for multi-location or multi-state cannabis retail decision-makers. You can gain better insights as to why it didn’t sell when you have a more expansive, standardized view of your retail information. SKU velocity and other strategic inventory choices are critical to profitability. 

Improve customer loyalty

Assimilating sales data, inventory data, and customer information can improve retailers’ understanding of what’s popular, who’s coming back, who’s gone ghost, and who’s spending big. Similarly, it’s the same pool of information from which personas or audience segments are reverse engineered from, for targeted marketing efforts or sophisticated customer relationship management (CRM) campaigns. Having access to these enriched customer insights via data integration from Green Check Access can help cannabis retailers move closer to frictionless customer shopping experiences. 

Leveraging this enhanced data can improve a lot for your loyalty efforts, such as:

• The computational value of loyalty points for growth and FP&A
• Nurturing big spenders into brand evangelists
• Winning-back ghost customers, and
• Better designing promotions to be profitable more often than they currently are.

Making data collection and analysis easier with Green Check Access

It’s growing more necessary by the day to leverage your disparate swaths of cannabis retail data to stay competitive. The insights, testing, and strategic changes that your retail business needs are probably not due to a lack of information available to you, but due to difficulties in accessing it in a way that makes sense. That data can become so much easier to engineer value from by integrating, normalizing, and standardizing the reporting output. And again, save priceless time on your necessary compliance reporting. Onboarding Green Check Access for your decision-makers is really a retail win-win situation.

Green Check Access’ Unified API makes sense of disparate business datasets. It allows strategic professionals to create tailor-made solutions specific to your cannabis operation. Having your data integrated, normalized, and uniformly available not only automates data collection, but simplifies contextualizing the information they contain.

Build a data-driven cannabis business with Green Check

As the leading resource for cannabis financial services, Green Check has a wealth of information available to help you make best-informed strategic decisions. The Green Check Access Unified API simplifies how companies report on, access and analyze their own data. Get started with Green Check to leverage your data and take your retail operation to the next level.