CBD Displays: 10 Keys to Effective Merchandising- Part I

How the Right Display Can Help Build Your Brand, Maximize Sales, and Separate You from the Competition

The CBD market is exploding. Like the 19th century gold rushes that took place in Australia, New Zealand, Brazil, Canada, South Africa and the United States, the CBD gold rush will inevitably follow a predictable lifecycle. Gold rushes typically start with the discovery of gold deposits in a stream bed. The discovery is soon followed by a tweet: “Hey fellas, there’s gold in them there hills.” Once the news spreads that the gold-bearing sediment is larger than a few cubic meters, a stampede of miners with nothing more than simple gold pans head to the river beds seeking their fortunes. The low barriers to entry which give rise to the “rush” result in a general feeling of euphoria, a free-for-all mentality, and income mobility related to the wealth-creation opportunities that abound. However, as the life cycle of the gold rush progresses, there is an inevitable transition marked by progressively higher capital expenditures, larger organizations, more specialized knowledge and skills, and more advanced techniques such as hydraulic mining. Typically, the heyday of a gold rush lasts only a few years before the small guys get squeezed out and are forced to focus on silver and lower value base metals. So, what does the gold rush have to do with CBD displays? A lot actually.

The CBD market is in the early stages of the gold rush. The race is on. Thousands of companies are hard at work creating oils and tinctures, creams and lotions (topicals), capsules and pills, edibles, and vaping products. These natural products are designed to help manage stress and anxiety, reduce pain and inflammation, improve sleep, heal various ailments, and achieve mental clarity. The unprecedented rate of product innovation and proliferation threatens to disrupt a wide range of industries, including pharmaceuticals, beauty/cosmetics, food and beverage, pet, and wellness to name a few. Despite FDA scrutiny, numerous regulatory hurdles, and lack of clinical studies proving the efficacy of CBD, the general population has bought into the promise of health, the industry is attracting large amounts of capital, and consolidation is already underway.

At this point in the industry’s lifecycle, first mover advantage, retail distribution, market share, and brand building are of paramount importance. In fact, Arcview and BDS Analytics indicate in their latest report that as of 2018 licensed U.S. dispensaries accounted for two-thirds of all CBD sales. However, by 2024, they project that 70% of all CBD spending is expected to occur in general retail stores, such as grocery stores and convenience stores. And, while a number of the early industry leaders are stacking their management teams with CPG veterans who know a thing or two about building consumer brands and securing retail distribution, companies like Canopy, HEXO, and Tilray have focused almost exclusively on brand building within the realm of licensed dispensaries. They generally have not developed the expertise and institutional skills required to succeed in the broader, more traditional retail environment.

Competing in a world in which 70% of sales will occur in general retail stores means effective in-store merchandising is a categorical imperative for brands to be successful. That’s where CBD displays come in. We believe there are 10 keys to effectively merchandising CBD products visually and that the right CBD display can help build your brand, maximize sales, and set you apart from your competition. In today’s post, we’ll cover the first 2 keys to success, and then in Part II and Part III of this blog series, we’ll cover the remaining 8.

1. Educational Sale– Because the industry is still in its infancy and the rate of product introduction is high, consumers and retailers lack the information and knowledge they need to make good purchasing decisions. The majority of consumers don’t know the difference between Hemp CBD and Marijuana CBD. They are uneducated about the differences between full-spectrum, broad-spectrum and Isolate CBD. They may be concerned about the dangers of vaping CBD products based on recent news reports. They may be unsure about the effectiveness of certain CBD products because of the lack of clinical studies and the restrictions regarding claims that manufacturers can make. Retailers and their store associates are also largely in the dark with respect to their knowledge of CBD products.

Understanding the importance of educating the consumer at the point of sale is critical in creating an effective CBD display. Because store personnel may be relatively uninformed about your product and CBD products in general, you need to rely on your CBD display to get the job done. Your display needs to be your silent salesman. There are a few ways to accomplish this:

● Point-of-sale literature– Incorporating a tri-fold brochure or other literature format into your display can go a long way in educating a potential buyer. As an alternative to mounting a traditional brochure holder to your display, we also like the clean look of embedded brochure holders like the one shown below that we built into a vaping display.

● Digital Media Player- Incorporating a digital media player into your display can be a great way not only to tell your brand story but also to educate the customer on your product. Our preference for most countertop displays is a 10.1” player since it has more impact than a 7” player and is not hugely more expensive. You’ll need to make sure you can get access to electrical power before choosing this option. Battery-powered digital media players are available, but they are more expensive and the battery packs can be clunky. We designed the Sengled display shown below to help the customer understand the company’s line of smart lighting products. Unlike the example shown below, we also do a lot of displays with embedded open frame digital media players.

● Graphics– Incorporating educational graphics into your display can also be an effective way of teaching the consumer about your product. In general, people are lazy and don’t like to read so we advise keeping your text brief and making your graphics as eye-catching as possible. An example of how we used colorful and informative graphics to explain The Honest Kitchen’s full line of 100% human-grade pet food is shown below.

● QR Code- Another approach is to incorporate a QR code into your graphics and include a call-out encouraging customers to scan your QR code to learn more. The QR code can be linked to a product education page on your website.

2. Induce Trial- The second key to a successful CBD display is creating a way to induce trial at the point-of-sale. This is particularly important with a new category like CBD and with a category where the purchase price tends to be higher and represents more of an investment for the consumer. The beauty industry does a good job of inducing trial. Virtually all of the beauty/cosmetic displays we design have an area that shows the product out of the box which enables the customer to actually touch and feel the product- often the first step in inducing trial. The unboxed product serves as a tester which enables the customer to physically try the product. This approach can certainly work for CBD topicals and may also work for other CBD categories as well.

The example shown below is a countertop bamboo tray we designed for Coola’s line of lip balm. It accommodates both boxed product and a tester row so that customers can try the product.

A second example from the cosmetics industry is the Bodyography cart we designed below. In this case all of the product is shown out of the box, but the pull-out trays are designed to allow consumers to try the product before purchasing.

In addition to physically testing the product, there are a variety of other ways to induce trial such as offering starter packs, test sizes, discount coupons, etc.- all of which are designed to get the consumer to test your product and make a more informed decision before investing the money for a larger purchase.

Designing your CBD display to facilitate customer education while also incorporating techniques to induce trial are two of the key success factors for effective in-store merchandising. In Part II of this blog series, we’ll cover 4 more key success factors so we hope you will take the time to check it out.