Big data has always been crucial for businesses to scale. This is especially the case to the cannabis industry where U.S. sales in 2018 were between $8.6 billion and $10.8 billion (that’s more than U.S. spending on e-cigarettes, the video game Fortnite, and Goldfish crackers). With U.S. cannabis sales in 2019 estimated to be nearly 35% higher than last year and reach $30 billion by 2023, cannabis retailers are looking to grab a bigger piece of the industry pie by any possible means.
This is where having access to real-time information means the difference between fading into the background or growing into a multi-million dollar per year marijuana enterprise. Predictive analytics derived from big data is a powerful tool for cannabis businesses to use not only to understand what customers want next, but also which way the industry is heading. Let’s review how cannabis businesses can gain valuable insights into their customers by drawing conclusions from big data predictive analyses.
Put on your Hard Hat. It’s Time to Data Mine.
Reliable predictive insights and real-time business intelligence has given companies from nearly every industry the ability to eliminate risks and increase their revenue potential. The cannabis industry is no different. Businesses are already leveraging big data powered via machine learning and artificial intelligence (AI) technologies to gain the upper hand on which trends to follow within the industry.
One of the greatest challenges the cannabis industry currently faces isn’t about the data that it accumulates from its consumers, products, or sales. Instead, it’s about pulling something useful from the data they’re already collecting via data mining and predictive analysis. Although these two tools are often confused for each other, they offer different specialties that can be used for different purposes altogether.
It’s important to realize that even if you have access to massive amounts of data, it’s only useful to your business if the data is relevant enough to where you can derive actionable insights from it. This is where data mining is incredibly valuable and critically important to understanding your customers needs. Once you’ve gained the actionable insights that you need on your customers, your business can structure your product offering to ensure they get their pick of the products that they want.
Acquiring Actionable Insights From Cannabis Customers
The great thing about data mining is that it does more than just learn about what their favorite cannabis products are. If you structure your platform the right way, you can also learn how much your customers are likely spend to get the products that they want which will influence your pricing model. If you’re able to accumulate the right data points, you can use predictive analytics to help you market your business to the right audience at the right time at the right place with the right message.
For example, Miner & Co Studio reported the following demographics based on a survey of 800 cannabis users:
- An average age of 30 years old
- 35% are female
- 65% are male
- 63% are either living with a significant other or are married
- 84% are working in a full-time capacity
- 65% earn a household income of at least $75,000
- 42% are parents with children under 18
- 49% are Democrats
- 45% are Republicans
Now, this data might not all be pertinent to your cannabis business, but if you’re able to map out trends over the course of months or years on these measurables, you can begin to predict which customer niches to focus your marketing on. This can help you address any low-hanging fruit opportunities that will surely give your business a leg up against competing cannabis retailers.