Ready to Help Your Cannabis Business Fight Inflation?
June 28, 2022
It’s no secret that inflation has both business owners and consumers on edge. The current inflation rate for the United States is 8.6% – the largest annual increase in over forty years, according to U.S. Labor Department data published in June. Unfortunately, this spike could be a bellwether for higher consumer prices on the horizon. When consumers have less purchasing power, small business owners are often the first to feel the shift.
Rising inflation rates and market constraints ultimately hurt dispensaries’ bottom lines. According to a recent survey, 37% of US cannabis operators say they’re not profitable due to increased operating costs and competition in saturated markets. Consequently, these challenges have left many cannabis retailers scrambling for ways to stand out and establish lasting customer relationships. One of the most effective, but overlooked, strategies to drive sales during inflation is to offer accessible, convenient, and secure cannabis payment solutions.
What is causing inflation?
Before tackling solutions, let’s address inflation itself. Inflation stems from numerous local and global factors. In the most basic terms, it is often catalyzed by prices changing due to a sudden spike in the supply and demand of goods and services or the amount of money circulating within the economy.
These days, the U.S. inflation rate can be traced to ongoing supply chain issues compounded by limited oil supplies. Coronavirus has been one of the biggest influences on the economy – consumers are eager to spend the money they saved during the pandemic but many businesses either closed or experienced significant disruptions over the past two years. As a result, these externalities have trickled into every part of the supply chain.
During times of high inflation, small businesses are faced with a dilemma. If storefronts decide to raise prices in order to make a profit, customers might shop somewhere else. But a business might not be able to absorb the higher costs. Cannabis may be grown and manufactured domestically, but the industry still depends on machinery, packaging materials, and other critical resources from the global supply chain. In order to minimize the economic burden felt by cannabis consumers and businesses alike, dispensaries should consider offering practical solutions to make cannabis purchases as seamless and accessible as possible.
Aeropay can maintain customer spending even during inflation
Adding Aeropay to your business’s tech stack is proven to increase sales. On average, businesses that utilize alternative payment platforms, such as Aeropay, have seen a 25% increase in spend per order, a 30% increase in completed online orders, and a 37% increase in returning online orders. Even with current-day inflation rates, businesses that use Aeropay are still seeing a 25% increase in customer spending with each purchase.
When it comes to competitors in the alternative payment platforms market, Aeropay definitely stands out. The adoption rates are higher, and it is free for customers to use. Customers are also ready to move away from dispensaries’ cash-only structure. In fact, the percentage of cash payments for goods is declining every year, with consumers’ demand for modern and compliant digital payments. Aeropay helps your dispensary stay on the cutting edge while providing the best experience for your customers.
Offer customers a better way to pay
Customers are especially sensitive to additional fees when the price of everyday goods has skyrocketed. If your dispensary offers cashless ATM charges, consumers may be frustrated by extra ATM fees and the need to round the price to the nearest $10.
Prioritizing customer happiness is key. When customers are satisfied, they are extremely loyal. In fact, a 5% jump in customer retention rates can lead to increased profits by 25% to 95%. Higher profits aren’t the only benefit. When a customer is invested in a brand, they’re more likely to tell other consumers where they’ve had a positive experience, leave positive reviews online, and give valuable feedback for improving products.
Of course, this also means unhappy customers can negatively impact a dispensary’s reputation and sales growth. If customers have a bad experience, they are likely to give negative reviews, both by mouth or online, driving away other potential customers. Over 90% of customers say that the most trustworthy way of learning about new businesses and products is by hearing about them from someone else.
One straightforward way to eliminate unnecessary fees at checkout is offering Aeropay, a platform that provides compliant and secure payments for dispensaries. Not only are customers able to pay exactly the right amount for their purchases, but Aeropay also allows dispensaries to accept cashless payments, giving the same freedom to shoppers accustomed to paying with debit and credit cards in mainstream stores. This is because Aeropay is a financial technology company that helps move money electronically via bank-to-bank transfers, called ACH payments.
Customers aren’t the only ones who benefit from Aeropay. Aeropay partners with Safe Harbor, the leading compliance-based banking program for cannabis businesses affiliated with Partner Colorado Credit Union. So, all payments are compliant with federal laws and backed by a secure financial institution. With Aeropay, dispensaries and customers can process and pay for cannabis with peace of mind –just like any other retail transaction.
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