What Makes Cannabis the Perfect Segment for Augmented Reality?
As 2018 comes to a close, it seems clear that the coming year is going to be another big one for augmented reality (AR). While AR has opened up brand new opportunities for many companies, it has also proven to be a perfect complement for many strategies that businesses were already executing.
This is perhaps exemplified best by the cannabis industry. A burgeoning market in its own right, cannabis companies and augmented reality have proven to be an ideal match.
4 Reasons Augmented Reality Is Perfect for the Cannabis Industry
Augmented reality is expected to be a $133.7 billion industry by 2021, a statistic that reflects just how much experts believe it will grow in the coming years.
Much of this growth will come from new adopters. Some of it will come from companies that already use AR but decide to increase their investments in the technology.
While almost every industry will adopt AR to some degree or another, expect cannabis companies to continue being extremely receptive for the following 4 reasons.
1. The Market for Cannabis Is Tech-Savvy
According to the Cannabis Consumers Coalition, 40.79% of cannabis users are between the ages of 21 and 35. In other words, the largest consumer segment of cannabis users is Millennials.
This is important to understand as 68% of Millennials want an integrated seamless experience across channels from businesses. This means that they expect to experience a seamless transition between their mobile devices, phones, and in-store experiences when interacting with a company.
That’s great news for dispensaries, as it dispels the myth that Millennials only want to make purchases online. They’re actually more than happy to visit a physical store to get what they want (their only choice for cannabis), provided that company invests in omnichannel engagement.
Dr. Tim Hilken is a professor of Marketing and Supply Chain Management at Maastricht University School of Business and Economics. In his paper, “Making omnichannel an augmented reality: the current and future state of the art”, he found that augmented reality offers several opportunities that provide a seamless omnichannel journey to customers. As well, it smoothens current obstacles through combined customer experiences that have been embedded, extended, and embodied.
All three of those opportunities are being leveraged by companies with large Millennial markets. Many of them are part of the cannabis industry.
2. Augmented Reality Is Making It Easier to Market Cannabis
Education has been central to the cannabis industry. Educating the public about the realities of cannabis use has been central to its legalization. Education has remained a central strategy for cannabis companies looking to win new customers, too.
Augmented reality perfectly lends itself to this unique requirement. Companies have been using “virtual budtenders” to help spread the word about the different strains they have to offer. These AR aficionados offer a similar experience to the one a customer could expect in an actual dispensary. The professional walks them through various options, explaining their effects. All the while, a sample of the product turns in a 360-degree effect.
In Canada, marketing laws for cannabis companies are extremely limiting, despite legalization. One example of Canada’s cannabis laws is that cannabis is required to be packaged in a single, uniform color, without any other images/graphics except for the logo and health warning. This is based on Health Canada’s guidelines for cannabis packaging.
That doesn’t give companies a lot of options for differentiation. That’s an especially big blow to smaller businesses that don’t have the same budgets as their larger counterparts, many of which have even attracted big-name celebrity investors.
Fortunately, augmented reality may represent a promising workaround to Canada’s stifling laws. Cannabis companies could outfit their products with “augmented reality-enhanced packaging” that could go into much greater detail for customers who are interested in learning more.
3. AR Brings the Amazon Effect to Dispensaries
Every company with a physical storefront needs to content with the Amazon Effect, a phenomenon that describes how customers expect retailers to provide an ecommerce-like experience in-person.
They want all the information they need to make an informed decision.
They want it right at their fingertips.
And they want it without having to actually engage an employee.
So, even after you attract customers into your dispensary, they may want to be in charge of their own shopping experience.
A number of retailers have already embraced AR to sell everything from clothes to furniture to paint and more.
As cannabis remains a product that has to be sold in-person, it only makes sense that dispensaries will invest in augmented reality to not just attract their largely Millennial clientele but also keep them engaged during their visits.
4. The Cannabis Industry Still Faces Unique Challenges
Above, we touched on the major challenges facing cannabis companies in Canada, but there are obviously a number of obstacles south of their border, as well. In the United States, where cannabis use hasn’t been legalized on a federal level, there’s still some taboo surrounding the topic, even in states where using recreational marijuana is no longer a crime.
While more than 55 million Americans use cannabis, just over 40% say doing so is not socially acceptable.
That is to say, one of the driving forces behind AR-adoption in the cannabis industry is easing the anxiety that some customers may feel about visiting a dispensary and going through the formal purchasing process for the first time.
Once again, virtual budtenders to the rescue.
Furthermore, as the industry faces a number of unique challenges – challenges companies in other fields don’t have to worry about – every marketing opportunity should be taken.
Is Your Cannabis Company Ready for Augmented Reality?
As you can see, augmented reality represents a number of powerful benefits for cannabis companies. Whether it’s improving the overall experience you provide customers or simply marketing to them in the first place, AR is a force-multiplier that should not be ignored.
Of course, you may think that it’s also an advantage your company can’t afford or doesn’t currently have enough time to fully invest in and leverage.
At Nextech AR, we’re bringing augmented reality to the cannabis industry and have already experienced success with a number of other companies.
If you’d like to learn how we can help your business grow with augmented reality, contact us today or book a free demo!