Many cannabis brands joined the ecommerce bandwagon during the pandemic to ensure their offerings were accessible to customers and patients. The biggest dilemma during this transition, for cannabis cultivators and manufacturers of value-added products, has been choosing between an online marketplace and an online brand store.
While an online cannabis marketplace offers instant time to market and an immediate revenue opportunity with guaranteed visitor traffic, it involves significant trade-offs, especially around customer/patient data access and control and brand identity. A custom online store ensures full customer/patient data access, delivers highly personalized experiences, enables loyalty rewards programs, and provides total control over the brand. However, it takes time to build, test, go live, and market.
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Are you having these conversations right now? Here’s our take on the trade-offs between the two to help you make a decision:
Online Marketplace vs. Online Brand Store – A Comparison
| Online Marketplace | Online Brand Store |
| iFrame embedded menu offers only basic UX | Develop a custom UI for superior UX |
| Provides the same iFrame menu for all merchants; no room for brand differentiation | Reinforce unique brand colors and emotions through a custom build |
| Basic visitor analytics provided | Dedicated tracking and reporting of visitor analytics |
| Direct competitors are also listed on the same marketplace | Captive website visitors with no distractions from competitors |
| Offers zero SEO value for your cannabis brand | 100% SEO authority for your brand. Every dollar spent on SEM like keywords, and even blogs, benefit your brand |
| Limited brand recognition as most patients/customers shop for product category or intended outcome | Contributes to high brand recognition |
| Proximity to competition and low brand differentiation may force you to indulge in price wars to attract sales | Absolute freedom to showcase your core brand values like quality, experience and price |
| Less control and access to customer data | You own the customer data including demographics and spend, and customer relationships. Can easily run loyalty programs, retargeting and upselling, creative campaigns etc. |
| Binding contract that may restrict listing on other marketplaces | No limitations. Marketplace becomes supplementary and not a substitute for your online presence |
| Possibility of marketplace-owned brands having an unfair advantage | No competition at all |
| Patients/customers may become loyal to marketplace brand | Patients/customers’ loyalty towards cannabis brand |
| Commission payable to marketplace | Zero commission |
| Dependent on marketplace for uptime, security, performance, and support | Can establish a “best-of-breed” approach and engage the best technology for superlative outcomes |
| Fast time-to-market | Time and resource intensive as a green-field project |
| Guaranteed visitor traffic due to Marketplace brand and SEM | Huge investments needed in SEM and will take time to deliver results |
Increasingly we are also seeing brands adopting an omnichannel approach and investing in multiple touchpoints to engage with customers wherever they are: physical store, online brand store and online marketplace. Merchants need to evaluate priorities, resources bandwidth and opportunity costs before deciding which options to explore.
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