Results of a survey released today by Onfleet, a San Francisco, California-based tech company whose last mile delivery management software streamlines delivery operations for thousands of businesses around the world, strongly suggests that consumer interest in cannabis home delivery is not only sticky enough to survive the COVID pandemic but appears capable of permanently supplanting in-store sales as the dominant point of transaction. The survey, which was conducted by The Harris Poll, addressed home delivery in general but included cannabis-specific data.
COVID provided an unexpected catalyst for all types of home delivery, including for cannabis retailers, many of whom were literally saved from extinction when they were deemed essential businesses. The question for retailers going forward is whether traffic returns to pre-pandemic normal as we enter the long (or permanent) managed-pandemic phase of our recovery.
Onfleet’s survey – as well as other surveys from the recent past – indicates that delivery is here to stay and will only increase in popularity. Once experienced positively, the data suggests, home delivery of cannabis becomes the average consumer’s preferred method of interaction for factors that include pure convenience as well as a strong desire not to be seen purchasing cannabis by someone they know.
“Now that customers are comfortable with delivery, expect them to increase their frequency across industries,” Onfleet CEO Khaled Naim said in a broad observation that seems particularly relevant to the cannabis industry. “The retail sector has shifted exponentially and how businesses deliver to, interact with, and maintain their customers is a key part of their brand. Retailers across all industries need to consider their delivery strategy to expand market share and meet consumer demand. Those that figure out delivery will be the winners, others the losers.”
Onfleet may have a horse in the delivery race, but the numbers it released today are interesting nonetheless, especially the cannabis-specific-data, which included the following few bullet-points:
Over half of Americans (59%) have stated that if they were going to purchase legal cannabis products (e.g., gummies, drinks, flower), they would be much more willing to purchase them via delivery versus going into a store/dispensary.
More men (63%) agree compared to women (56%).
Younger Americans are more likely to choose delivery (75% for 35-44 age bracket), with a steady shift downward as respondents get older.
More than half (53%) of 35-44-year-olds would rather spend time at the Department of Motor Vehicle than run into someone they know while buying legal cannabis products.
18-34: 49%
45-54: 37%
55-64: 33%
65+: 22%
This data, Onfleet notes, “calls out the interest and demand for discreet home delivery of cannabis.” More generally, the survey found that “more than half of Gen Zs and Millennials have more delivery apps than streaming services, and that more than half of Americans wouldn’t trust a robot or autonomous vehicle to deliver online purchases.“
It also found that “nearly half of Americans (45%) would be willing to pay higher delivery fees for online purchases if a company has initiatives to offset their carbon footprint,” with “younger demographics (58% of those aged 18-34; 63% of those aged 35-44) more willing than older ones (45% of those aged 45-54; 32% of those aged 55-64; 23% of those aged 65+)” more likely to agree.
“With members of Generation Z becoming more important in the global marketplace, I feel the younger generation will start to shift the delivery economy towards a more sustainable and eco-friendlier path,” Naim commented generally. “At the end of the day, it’s up to individual companies to step up and implement practices that reflect customer sentiment and improve customer satisfaction.”
Onfleet’s Director of Partnerships, Robert Fierro, responded to a few questions about the survey. Regarding the shame among young people associated with purchasing cannabis in a dispensary, I wondered if Onstar expects the shame to lessen over time, similar to buying alcohol in public. “As legalization continues to expand, we believe the stigma associated with cannabis will rapidly decline as its use becomes more mainstream,” said Fierro. “While the survey didn’t ask if people felt the same about buying alcohol, we don’t believe we’d see the same attitudes because society is much more accustomed to people openly buying alcohol.
“This may also be a matter of form of consumption,” he added. “Smoking cannabis has always been seen as a nasty, dirty, and smelly way of consuming cannabis. Edibles are slowly gaining traction. The real game changer is drinks. People are used to consuming alcohol as a beverage. I expect companies like Cann and Wunder to totally change the way people perceive cannabis as it begins to replace alcohol consumption.”
I also wondered if they think the delivery adoption trend extends to consumers new to cannabis or to those who will enter the market in the future. “Our survey didn’t differentiate between new consumers and those who’ve been purchasing pot for years,” he replied. “However, we absolutely think that new cannabis users may have concerns about stepping into a dispensary – for both the unnecessary stigma attached, as well as feelings of being unsure of how or what to order. Purchasing from the comfort of one’s home is a relatively novel and convenient option that many new consumers will likely take advantage of as they ease into a new market. Delivery is king when it comes to being discreet about usage.”
The Onfleet survey results are supported by other surveys and reports conducted over the past two years. Flowhub’s Cannabis Industry Statistics 2021 noted, “According to Eaze, in the 30 days following the March 13 [2020] declaration of a national emergency, new delivery customer sign-ups jumped by nearly 60%.” The Eaze report itself stated, “In the 30 days after March 13, new Eaze customer sign-ups jumped by nearly 60%, first time deliveries increased by 44%, and the average size and value of every order rose by 15% and 13% respectively. March and April 2020 were the year’s highest months for new deliveries and, overall, in 2020, new customer sign-ups increased by 71%, and average order volume and value rose by 15% and 20%, respectively.”
More recently, Weedmaps, in its November 2021 First Data and Insights report, stated in part, “Cannabis delivery among Generation Z consumers increased by 125% year over year, with overall cannabis delivery increasing by 97%.”
And in a November 2021 TechCrunch article on Meadow’s new Dynamic Delivery option, writer Matt Burns also took note of Weedmaps’ data. “There’s a large untapped market in California,” he added. “The state legalized recreational marijuana in 2016, but it’s only sold in 35% of the state. The remaining 65% do not have access to a dispensary. This could be for several reasons, including lack of resources to develop regulations or a legal prohibition on the sale of cannabis in retail stores. However, in a 2020 ruling, a Fresno, California judge affirmed the right to deliver to these areas by dismissing a lawsuit by 24 California cities seeking to ban deliveries.”
One nagging obstacle to the ubiquity of cannabis delivery nationally is the fact that many legal states do not currently allow for home delivery or limit it to medical patients. Like everything else in cannabis, it depends upon the state. And while the delivery landscape will likely remain in flux for the foreseeable future as states debate whether to permit or expand it, in all likelihood there will be no federal guidance on the subject of cannabis home delivery for years to come, if ever, and each state will continue to make its own call.
The post Could Home Delivery Become Dominant in Cannabis Retail? Onfleet Survey Suggests Yes. appeared first on Cannabis Business Executive – Cannabis and Marijuana industry news.
