Cannabis sales made through delivery are a growing share of the overall cannabis market, a trend that the COVID-19 pandemic had accelerated during 2020.
While cannabis delivery remains prevalent, there is reason to believe that it will prosper in the long term to meet the needs of homebound users and those who appreciate the convenience and safety of the service.
If your dispensary or business already offers cannabis delivery, what do you need to know to improve your bottom line?
We looked at delivery data from a few significant Bay Area retailers and found exciting correlations. Take a read below for the data and insights that can help your business.
A consistent though not apparent trend we see is that delivery ticket sizes usually are 2x those of in-store for dispensaries who provide both services.
Compared to those who only do retail versus those who only do delivery, that number trends more towards 1.5x, but pulling in delivery still produces a higher multiple.
Cannabis delivery drivers do not affect the ticket size as the point-of-sale system assigns orders after purchase.
Because of this, we should expect less disparity in ticket size in drivers than that of what we saw with budtenders. Our data shows precisely that.
The difference between the worst-performing budtender to the average was 31%. That number shrinks to 23% for delivery.
Similarly, the overall spread from lowest to highest is 44%, compared to 64% for budtenders. The spread from the average performing drivers to the highest performing drivers is 16% versus 23% for budtenders.
Again, this does not necessarily mean that some drivers are “better” or “worse.” Their service does not influence ticket size. Therefore, the range in delivery represents the overall disparity of ticket sizes.
If anything, this confirms more that budtenders in-store affect ticket sizes a lot more.
Drivers assigned to different routes cause a high disparity in the average time it takes a driver to deliver an order.
Consistently across customers of ours in the Bay Area, delivery times are rarely, if ever, under 30 minutes. Typical delivery times are 45-90 minutes, depending on geography.
The spread for the average time to deliver for drivers is 50%. This spread is consistent even if a delivery service has a lower overall average delivery time. The spread doesn’t have to do with over-exposure of certain delivery services to longer distances.
There is a relationship between orders per hour and delivery times. Across our whole sample, the average driver does 2.5 orders per hour (13 orders in a 10-hour shift).
Thus, this spread is between 1.5 and 3.6 orders per hour. By definition, longer times are drivers that do fewer orders per hour.
Therefore, it would mean that longer times can result in less revenue. However, we see higher average ticket sizes for longer delivery times.
Using cannabis data, like the set we presented above, to inform your delivery service is immensely valuable to your business overall.
It is because making improvements to a cannabis delivery operation relies on evaluating a unique set of conditions.
Foremost, some delivery services may not have a storefront, altering the mode of customer acquisition to strictly online.
Customer satisfaction is also contingent on processing and drive times rather than budtender performance, which means operators should focus on those areas to improve.
Keep reading in the next section for a few data-driven strategies you can use with your business.
Given that ticket sizes can remain relatively unaffected by Zip Code, retailers can strategize communications around those in proximity and begin to inspire loyalty amongst immediate delivery customers.
Loyal cannabis consumers generally order more frequently and at a higher ticket. Therefore, creating a loyal cannabis delivery clientele could result in more significant revenue for your business.
Targeting promotions and communications by Zip Code enables cannabis delivery businesses to retain customers nearby while also potentially expanding delivery market share into areas with longer drive time.
The primary goal with these targeted communications would be to encourage order frequency, which, compounded with the tendency to order higher ticket sizes, could produce sizeable returns.
It’s essential to measure and analyze data throughout the cannabis delivery business cycle, particularly around order fulfillment.
It will help you understand how well your strategies are working and enable you to respond as needed.
Examining delivery driver times is another way to reward excellent service and understand the average time customers should wait for their order.
Some businesses reward drivers for delivering orders quickly, while others will set delivery benchmarks as part of their compensation structure.
Measuring driver times is also helpful for customer service representatives, for they can know how long a consumer should expect to wait before their delivery.
Benchmarking these averages can help them field potential complaints and proactively handle any issues that may arise during delivery.
We’ve seen that our cannabis delivery customers generally order higher tickets, regardless of location or driver time.
That means local businesses can optimize their service based on Zip Code and driver performance to influence order frequency.
What does it come down to? The data!
Of course, you may not have a scientist or employee committed to looking through spreadsheets.
That’s where Happy Cabbage can help.
If you’re looking to empower your delivery business today, contact us for a free demo of our next release, Sirius.