📊 Welcome to the Digital Data Dark Ages

Data. It’s the lifeblood of CPG, and informs (or, should inform) every decision you make.

But…why?

Lots of people make noise about the importance of having lots of data for your business - it’s vital, they say - but, let’s address why we collect data at all:

You, being a retailer or brand, exist to delight your target consumer. That’s your only purpose - identify a target, then relentlessly delight them. Maybe it’s “Beth from Akron, two kids and trouble sleeping” or it’s “the fine 21+ folks of Sauget, IL” or “Chet, a 30-year-old sandwich artist in Chatsworth” - whatever persona or personas fall within your sights, it’s your job to make them happy.

Ultimately, sales = delight.

Here’s the issue, even if we agree on the importance of leveraging data: cannabis operators, on average, drastically underutilize it. Most decisions are “gut feel,” or at least not buoyed by objective, quantitative facts.

Let’s dig in to why.

Reason 1: Most digital data is garbage. 🤷🏻‍♂️

Most cannabis transactional data is non-standardized; product information is often “scraped” from a POS database, which means it is copy / pasted elsewhere to be manipulated.

Why does that matter? Well, scraped data is only as good as its inputs. The ‘inputs’ are mostly from POS systems, which often rely on humans to enter SKU data into an interface. If SKUs are not entered exactly the same way, always, you’re up the creek. See below.

Data standardization is required, and not every partner does it. Ask your eComm or data partner, explicitly, if they do this.

Reason 2: No one has told us what data we need, or why we need it. 🔢

Enter this newsletter. Here’s the data you need, and why:

(btw, all of these dashboards are populated with dummy data)

🛒 You should know stuff about your store

If you are a retailer, you are supposed to sell things. You should know how much of each thing you sell, so you can optimize and sell more. Remember, sales are the ultimate proxy for delight.

You should always know, for a given timeframe, your:

• Total revenue (benchmark this over time to see if your business is growing)

• Total transactions (same logic)

• Average cart size (how much do customers spend with you, on average? To maximize, try upsell interruptions and bundling - then measure again)

• Products per cart (same logic)

• New / returning customers mix (are you relying on the same customers month in and month out? Or is your reach growing?)

There’s more, but these are important.

All of these 30,000-foot metrics indicate how delighted your target consumer is. Higher average cart sizes = more delighted. More products per cart = more delighted. Loyal customer base = more delighted.

📈 You should know stuff about the broader market

Your store-level operational performance is a good start - but don’t get caught in a vacuum. Your stores are different than other stores - and those other stores often win your target consumer over by delighting them more.

That’s why it’s so important to understand the broader trends in the marketplace, and to benchmark yourself against them.

You should leverage data to better understand what your target consumer may be looking for - and how to include it in your offering. Some handy metrics:

• Avg product price comparison (shown above; does your target consumer respond better to a materially different price point?)

• Top brands you don’t carry

• Top bundled categories

• Retention rate vs. sales (by brand)

• Price vs. sales (by brand)

• Category performance

👱‍♀️ You should know stuff about your customers’ behavior

What are your customers doing when they get to your site? You should know:

• # visits and # visitors

• Conversion rate

• Abandoned carts

• Top searches

• Top filters

The most important metric, as I’ve noted ad nauseam, is your conversion rate - how likely are your customers to place an order when they visit your site?

There are also interesting companies out there building personas around cannabis consumers, so that we can determine consumer behavior before they even reach our websites - and make predictions on where to place advertising to best engage them. I’ll leave that to the experts - it also deserves its own email.

📚 tl;dr

• You exist to delight your target consumer

• You should know stuff about store-level operations (sales, transactions, avg cart size, etc.)

• You should know stuff about the broader market (pricing, bundled categories, top brands you don’t carry)

• You should know stuff about your customers’ behavior (searches, filters, conversion rate)

• Ultimately, sales = delight