This post originally appeared on Entrepreneur.com - #Growing Your Business
What the rise of the cannabis tool stack means for cannabis retailers looking to grow their business.
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As the legalization movement continues, cannabis dispensaries have become more and more like any other mainstream retail operation, such as a shoe or clothing store, Customers expect a superior and tailored experience and the highest quality products for the best prices.
But there’s one big difference between the two. Unlike other retail stores, cannabis shops must be in compliance and report to state track-and-trace systems. In order to deliver on that experience while maintaining high levels of confidence in compliance, a dispensary owner must hire top talent, implement sound processes and plan carefully in order to optimize and streamline business operations for continued growth. The technology stack that powers today’s modern dispensary is at the epicenter of executing a successful retail operation in a burgeoning industry.
Why the existing solutions fail
All cannabis retailers need a point-of-sale system (POS) to manage the front-end operations such as processing payments and promotions, as well as a back-of-house functionality for inventory management and compliance tracking and reporting. This requires performance-driven technology that arms retailers with powerful data insights and tools to drive their business further and create seamless experiences.
Many of today’s existing POS solutions deliver a “jack of all trades, master of none” approach by providing the tooling and technology for the entire cannabis supply chain. From growing to manufacturing to selling, they’ve developed homegrown solutions that attempt to make the retail owner’s job as easy as possible by relying on only one vendor for everything. On the surface, this is appealing because it removes the burden of having to build and operate a sophisticated tool stack by him or herself.
However, each dispensary has different growth priorities and not all shops operate under the same business models. The sacrifice for a single-solution software is a lack of customization, scalability and continued product innovation. It also presents issues for the vendor, especially on resource allocation and deciding which tools receive the most resources.
Why a platform approach works
Innovation, regardless of industry, is driven by consumer demand and business need— and there is no shortage of either in a market expected to reach $26.3 billion by 2025.
The technology industry has long been gravitating toward an openly-integrated “platform approach” that draws on a complex and rich ecosystem of vendors and partners each providing complementary offerings. It is no surprise that the emergence of the cannatech market should follow the same path as pioneers like Salesforce or Apple by redefining the solutions to modern technology problems.
The world is too vast and complicated for any one company to build the software and hardware that supports the entire cannabis supply chain. Those that try to do so will fail because there will always be someone doing one category of the chain better. From cannabis cultivation to payments to CRM and customer loyalty to delivery, HR, advertising and analytics, new players are emerging as category leaders in each of these sub-markets. The solution is to leverage the growing cannatech ecosystem and partner with these niche market leaders to deliver an extensible POS and inventory management platform that can be built out to support all facets of the supply chain.
The tool stack solution
With the right intelligent POS platform at the core of any retail business, dispensary owners are able to hand-pick the best essential elements of the cannabis tool stack for their business. For instance, they can automatically update online menus with Leafly, power their delivery services through Dutchie, integrate with BDS Analytics to drive better decision making and then track customers through CRM and loyalty rewards software like SpringBig or Sprout.
Cannabis retailers deserve to pick and choose what their cannabis tool stack looks like — from hardware to software — to create the perfect customer experience that aligns with their store’s unique mission and vision. No dispensary takes a one-size-fits-all approach, and neither should their point of sale system.
At the end of the day, it all comes down to one thing: the customer experience. The future of cannabis legalization and medicinal use is bright and as technology leaders and innovators, it is our responsibility to provide the best technological solutions to solve modern challenges that benefit the greater good.