Portal - Consumer - High Social Status Consumers

Executive Summary

• High social status consumers are Millennials or Gen Xers, likely to be married, male and Caucasian or Asian/Asian-American
• Highly connected, but use technology to streamline product transactions, not for social media engagements
• Favor convenience, taste and reliable product quality overall else
• More than half prefer edibles, to only 22 – 23% each for flower and concentrates
• Consume less often, but spend more per week than other users
• Companies should focus on strong consistent branding, childproof packaging and high quality ingredients

That successful, educated individuals and mid-career professionals are willing and able to spend more for various goods - especially those of great quality or reputation - is no secret. This is a phenomenon that has been recognized and capitalized upon by high-end coffee chains, clothing stores, smart phone developers, and countless others; Marketers today are successfully capturing impressive amounts of this cohort’s vast disposable income by targeting them with tailored products and services, sometimes at shockingly high price points.

Vendors and manufacturers in virtually any line of business – especially the rapidly expanding marijuana market – should be keenly aware of this demographic’s behaviors and attitudes, actively developing strategies to appeal to elite users and capture a share of this important market segment themselves.

High social status users make up a fair share – approximately one-fourth – of the over 1,200 medical marijuana patients surveyed by Brightfield Group throughout California in 2016.  Using the survey data collected, the analysis below details the high social status group’s demographic makeup, describes users’ decision-making processes and spending habits, and provides guidance for manufacturers and dispensaries seeking to enter or expand within this market.

High Social Status Consumers: Who are they?

[1] Elite consumers are defined by several characteristics beyond those that qualify them as members of this consumer group – their high income and education levels. Not surprisingly, this group consists mostly of Millennials and Gen Xers, with three-fourths of this cohort between the ages of 26 and 49, presumably those who are in the primes of their careers and receiving peak earnings.   High Social Status consumers are split on religion, with about half identifying as devout and the other half considering religion to be less important. This consumer group is disproportionately male, skewing toward men even more so than is the case among medical marijuana consumers as a whole. 

Where this group truly departs from younger Millennial groups is on relationships and marriage – with about half of elite consumers being married, versus only about 20% of Millennials. The elite consumer group appears to be more committed and settled, and may behave more consistently or predictably versus younger groups. The High Social Status cohort also has a larger Asian and Asian-American base than do many other consumer groups, but as is the case among most medical marijuana users, the group is still largely dominated by Caucasians who make up over half of elite users.

[2] [3] [4] [5]

High Social Status Consumers: How do they live their lives?

• They know what they love and love what they know[6]

Well-heeled users are more hesitant to purchase brands they have never heard of, purporting to be disappointed in many cases when they try a new brand or product - more often than their less affluent counterparts. These consumers appreciate brands and products familiar to them, with about one-fourth of elite users choosing “trusted brand” as their motive for purchasing a product again (behind only taste and dosage).

This skepticism about trying new brands and products is likely influenced by this consumer group’s tendency to purchase edibles about twice as often as flower or concentrates. Given the many factors that go into creating a consistent, quality edible cannabis product (in terms of taste, THC content, consistency, and fat/sugar content), high social status consumers who find a product they enjoy stick to it and will go great lengths to continue to access it. High-status marijuana users are willing to travel farther to a dispensary that carries brands and products they enjoy, and spend more on each product they purchase, than are regular users.

Dispensaries and manufacturers looking to allure this flush-with-cash demographic are encouraged to increase their production, variety and availability of edible products, as well as offering promotions or samples to encourage elite users to give their products a try. Stocking the shelves with specialty brands using high quality inputs, including brands like Kiva and Auntie Dolores, is also recommended. 

• More pragmatic than social with technology

 Elite users show great willingness and preference for purchasing product online over shopping in brick-and-mortar stores.  Nearly two-thirds of high social status consumers report that they will check up on a new product or brand seen at the store using their smart phones before purchasing it.

These users are well connected to various online services as well, and show a strong propensity to use phone apps to their advantage. Interestingly, elite marijuana users tend to utilize social media apps with less frequency than less socio-economically advantaged consumers do, but are frequent users of apps that provide customer reviews, product delivery or services, such as Yelp, Amazon Prime and Uber.

Perhaps their app use is more geared toward productive transactions rather than social interactions because that this group is dominated by mid-career professionals with limited time and bandwidth for social media, and more spending money than less advantaged groups. This leads them to use practical apps such as Uber and Yelp quite often, and social media such as Facebook and Instagram with less frequency.

[7] [8]

Vendors looking to appeal to this demographic should have a plan to either develop or maintain unique app software for their brand, location or product, or advertise and make their product available through app services. Apps should be less focused on incorporating social features (though a user review feature should always be included as these are kindly received by virtually all consumers), and more focused on improving brand and product visibility and availability. This software might offer first delivery free or first purchases discounted, to draw in new customers who are skeptical of trying new brands. It should provide convenient and user-friendly service; a phone app tailored to this demographic should be a practical platform that can be clicked through quickly, and through which patients can order product to their door promptly, securely and discreetly. 

• Economically stable but always on-the-go

[9] [10] [11] [12]

High status consumers have very limited free time – they work many more hours than other groups, with the largest group working 41-50 hours per week, and 17% of them working over 51 hours per week.

Given their limited time, they very much value the luxury of convenience – a luxury that their incomes support. Their preferences and habits reflect their busy lifestyles. Wealthy users are unlikely to use reusable containers (as it takes effort and time to wash a mug at home, even though this is less expensive) or bike to work (as this demands not only extra commute time, but in many cases, time to shower and change); they also watch significantly less TV than regular users.

Given their elevated incomes, high social status consumers are generally financially stable – for example, they are much more likely to own their homes, rather than renting them.

The combination of this cohort group’s having a large disposable income and financial stability, and prioritizing convenience, is significant to dispensaries and manufacturers for two reasons: Primarily, because it means that they are willing to pay more for what they value (convenience and quality), and secondly, because they can be counted on to be consistent. Elite consumers are typically married homeowners – they will not be moving around often, shopping for new dispensaries. Once they discover a location they enjoy in their neighborhood, and brands they can count on and easily access, they will remain faithful customers. The challenge for vendors is to allure these customers and maintain quality, which will gain them regular clients with a healthy income to spend on product.

High Social Status Consumers: What marijuana products are they buying?

High Social Status cannabis patients are most interested in edibles, baked goods in particular. In fact, more than half of elite users prefer edible products, whereas only 23% choose flower and 22% concentrates as their first choice product. With the average medical patient those figures are much more evenly split between edibles (39%) and flower (34%).

Why the focus on edibles? These top shelf consumers are typically mid-career professionals, homeowners, heads of household – one very likely reason they prefer edibles over flower is because they are constantly under pressure to maintain professionalism and marijuana – especially smoked – still has a powerful social stigma in many circles. Edibles, however, look like any other baked good or piece of chocolate and will not draw as much unwanted attention to medical marijuana patients looking to medicate.

[13] [14] [15]

High Social Status Consumers: How much are they purchasing and consuming?

Perhaps also related to social stigma and time constraints, high social status consumers medicate with cannabis much less frequently than their less advantaged counterparts do. Although elite users are purchasing and using substantially less cannabis on a bi-weekly basis, they are spending more than regular users over the same period. High social status users spend an average of $95.40 per purchase, versus regular users who spend only $80.16, highlighting the former’s willingness to invest more money on products and brands they value.[16]

High Social Status Consumers: What are they looking for when buying weed?

Because edibles make up a large portion of high status users’ marijuana purchases, taste is a major consideration when deciding what products to buy, though it appears that organic, gluten-free, and lab-certified products are not held in the same high regard. As is the case among most marijuana users, brand trust and friends’ recommendations are considered important, but with elite users, price is not typically a determining factor in purchasing decisions. High social status users are looking for delicious, consistently quality edibles and will commit to tried-and-true brands and products – even if said products are more expensive.[17]

High Social Status Consumers: How can companies reach them?

• Product Development

Elite users are both selective and willing to invest in a quality product, purchasing fewer goods yet continuing to outspend other consumers. As price is a less substantial factor in determining purchasing decisions among this consumer group, product developers, marketers and manufacturers looking to appeal to them have more freedom to invest in developing quality, attractive products that will draw in (and maintain loyalty among) these users. Though manufacturers should keep an eye to competitive pricing, investment in quality can and should be recovered through moderately higher pricing, and will be well worth initial costs if products developed are successful in this lucrative market over time.

With regard to specific products, edibles – particularly baked goods – are immensely popular among high social status users and within that context, taste and dosage are top priority. For these reasons, cannabis products developed to target these users should be edible, delicious and consistent.  For example, vendors might offer a variety of flavors of brownies and cakes, being careful to ensure that the baked goods’ taste is not negatively affected by the incorporation of cannabis and that dosage is as consistent as possible in each cut of the edible. Those interested in more gourmet or specialized items might consider developing products like bon-bons, macaroons, or cupcakes – creativity in edible product development will help products and brands stand out and sell successfully, so long as they have been tested for tastiness prior to launch.

• Packaging/Product Positioning

Elite consumers are very pressed for time and have healthy budgets and disposable income, thus they tend to prioritize convenience. Product positioning and packaging should thus be designed to save the consumer time and effort. Online apps should make the product available with as few clicks of the mouse as possible, and the delivery radius should be expanded to neighborhoods where elite consumers are concentrated – for example, near tech hubs or universities, or in wealthy neighborhoods, if those do not already fall within delivery areas. Vendors should generate and stock products – primarily edibles – that are clearly labeled and whose THC/CBD levels are consistent and evident. Packaging should be discreet, relatively convenient to hide or put away, and safety-sealed. As half of this consumer group is made up of married people between the ages of 26 and 50 – many may have children and will be interested in restricting their access to – and awareness of – cannabis products in the home.

• Marketing/Distribution

High social status users are looking for delicious, consistently quality edibles and will commit to tried-and-true brands and products – even if said products are more expensive. Vendors and manufacturers should make brands distinguishable and identifiable, consistent, and should not elect to sacrifice quality or appearance for the purpose of saving money. To attract new loyal, elite users, vendors should periodically offer samples or discounts of popular products to customers, and manufacturers offer the same to dispensaries.

As the majority of this demographic is male and the majority are Caucasian, marketing and distribution efforts targeting high social status consumers and regions might focus on this cohort. Given that men are more likely to shop alone and quickly, versus female shoppers who might spend more time perusing and considering options, one successful tactic for marketers might include using bright, attractive labeling that clearly denotes the most attractive qualities of the product, e.g.  “healthy”, “relaxing”.

Finally, besides ensuring products are distributed to regions known to have well-heeled consumers, because elite users are pragmatic in their purchasing habits – often using apps to access services and products rather than social media or games, for example – it is important for dispensaries to make products available online as well. Over time, this will be the source of an increasing amount of traffic, especially from this consumer group.