VAPE - Vape Customers Show High Degree Of Brand Loyalty
In the cannabis industry, branding (which includes packaging, product makeup and thoughtful analysis of the target consumer among other things) has proven to be a major factor in promoting customer loyalty across a wide range of products. Headset ’s latest report, “Cannabis Brand Loyalty: A Look At California Vapor Pens”, leads off by invoking the archival image of a plastic baggy full of musty weed traded off in parking lots and clubs. But today’s cannabis product packaging runs the gamut from the utilitarian to the wildly creative. With the horizons of the cannabis market constantly expanding, it is crucial for companies to identify the ideal consumers for their products and how to market towards them for maximum profits.
The report defines brand loyalty as the tendency of a customer to continue to purchase from one brand loyalty is the tendency of a customer to purchase from the same brand over time. To this end, using California Vapor Pen brands as a model (a product sector that sees a high amount of brand loyalty), Headset’s report investigates three different ways to measure brand loyalty. Using real-time sales reporting, Headset’s data comes directly from partner retailers. This specific report looks at purchase patterns (or how a customer shops over time) and uses the results to paint a picture of customer loyalty. The report is careful to note that both high and low brand loyalty have their merits, citing companies who have the goal of reaching new customers in the market as those with a deliberate low brand loyalty strategy that can still yield solid profits.
Headset’s first strategy for measuring brand loyalty was looking at repeat purchase rates or the percentage of customers that repurchase a brand in a set time period. In California, 45% of customers re-purchase their products after 6 months. 12.6% of these customers will only re-purchase from a particular brand while 32.6% will purchase other brands in addition to their previously chosen brand. The report highlights this as significant given that people have such varied tastes and there are so many products to choose from. STIIIZY and Plug Play two vape pen brands with markedly high brand loyalty hardware are highlighted here as they both have proprietary hardware that pushes customers to repurchase their brands. However, over 50% of both brands still purchase from other brands even if they have to purchase different batteries, reflecting the aforementioned desire for variety among consumers.
Next, the report measures brand loyalty by looking at switching behaviors, which is when a customer chooses to buy a product from a brand similar to the initial brand chosen. This is a valuable metric as it helps businesses understand their own brands, how they are perceived by their, who their greatest competitors are and why. Headset’s report looks at Legion of Bloom customers and what other brands they are purchasing. The analysis showed that nearly a quarter of Legion of Bloom’s customers purchased a STIIIZY product- valuable information for both brands when considering branding strategies and how to make themselves more competitive.
Finally, the Headset report sought to measure brand loyalty by exploring wallet share across product categories, which is the percentage of a customer’s cannabis spending that goes towards a specific brand. Nearly 40% of the average Vapor Pen consumer’s wallet share is spent on their top brand, which reinforces the high rate of brand loyalty in this product category and may prompt vape pen brands to consider strategies like proprietary technologies to capitalize on this particular market dynamic.