Luxury retailing is undergoing a seismic shift, as seen in the decline of well-established brands and the rapid rise of new competitors, and this tumultuous landscape is a perfect match for retailers in the up-and-coming CBD and cannabis markets. Changing customer demands and the destigmatization of marijuana are creating opportunities to redefine what luxury means, and panelists discussed their strategies during the opening session of the 2019 Luxury Meets Cannabis Conference.
The word “luxury” itself has become a pet peeve for Scott Campbell, Co-Founder of Beboe, which operates The High End cannabis shop at Barneys New York’s Beverly Hills, Calif. flagship. The word has become diluted by becoming a marketing buzzword, and modern brands seeking to carry the torch need to differentiate themselves with more than a famous brand name and a hefty price tag.
“People self-reference themselves as ‘luxury,’ but you’re not allowed to do that. Never trust anyone who says ‘Trust me,’” said Campbell. “Consumers are smarter, and unsubstantiated luxury doesn’t work anymore. You can’t just make it look pretty and sparkly and charge more and have that be a category. People spend politically, and people spend for a passion. So when I say ‘unsubstantiated,’ I mean not substantiated by social change or substantiated by a genuine quality product or story.”
‘Elevated But Affordable’ Beauty Brand Seeks To Break Down Barriers
Dorian Morris, Founder and CEO of skincare brand Undefined Beauty, is familiar with putting clean social impact at the core of the business. That commitment spans the entire operation: Morris only partners with female, minority or LGBTQ-owned businesses across her supply chain, including for labs, labels, design and warehouses. She also has launched Undefined Collective, a pop-up that features CBD and wellness products from local, female, minority and LGBTQ brands.
“Just slapping a brown face on an ad is not going to do it,” said Morris. “I also think that companies should be ensuring that part of their business cycle and plan is thinking about diverse communities and hiring diverse employees so it’s not just one-sided. Especially in [the cannabis] category, which is built on the backs of black and brown folk, giving them representation and a seat at the table is really important.”
Undefined Beauty is also riding current trends with an “elevated but affordable” approach to its product portfolio. The brand seeks to offer high quality products without an associated hike in price — making the luxury beauty experience affordable to a much wider swathe of consumers.
“I think there’s an unnatural barrier that has been driven by retail, and I don’t think it needs to be that way,” said Morris. “The retail landscape is shifting. I hope there will be a day when you don’t need to create a brand for Neiman Marcus and a separate brand for Target.”
Compelling, Holistic Experiences Can Overcome The Need For Speed
The pressures causing some luxury retailers to falter are the same ones weighing on retail as a whole: faster delivery, nearly unlimited product choice and rising consumer expectations driven by online shopping. However, the rash of store closures does not mean e-Commerce alone is destined to dominate the luxury space.
“We know that people still really love to shop — they just want to shop somewhere special,” said Andrew Goetz, Co-Founder of MALIN+GOETZ. “I think if we looked at luxury in the past, people thought, ‘Oh, it’s expensive, it’s hand-crafted, it’s exclusive, I can’t get it so easily.’ With the advent of e-Commerce you can get anything at any time, and now the new luxury is speed and immediacy. How do we compete against that? We do it by opening up really unique stores.”
MALIN+GOETZ designed each of its 15 locations with a different architect, ensuring that each store’s experience is different despite being united by the overall brand. Each store is designed to invoke the feel of a modern apothecary, but modernized and stocked with a portfolio of natural, clean products.
The store also can be used to enhance the experience for shoppers who are interested but unfamiliar with CBD and cannabis products. Standard Dose bases its experience on the combination of education and experience: the CBD marketplace’s “educators” help guide shoppers to the right product to handle their problem, while in-store mediation sessions and yoga classes offer an experiential approach to improving long-term health.
“A lot of our consumers are coming in for pain, stress, anxiety or sleep products; those are kind of the four key pillars,” said Anthony Saniger, Founder and CEO of Standard Dose. “On the education side we want to guide them to the right product, but on the experience side we want to start to solve some of these problems. It’s not just about taking some CBD or smoking a joint and feeling better for the rest of your life. You’ve got to heal the actual problem at the root.”
The most successful cannabis and CBD companies share the same traits as other popular luxury retailers: they embrace social responsibility, offer a compelling experience and offer a quality product at a competitive price. While the upstarts in this space may be selling unique products, their best strategies are applicable to retailers across the industry.