CBD - Purchase Drivers & Factors

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01
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Part
01

CBD - Purchase Drivers & Factors

Some major (significant) factors currently influencing the purchase decisions of consumers seeking CBD based products include product form, potency, price, familiarity with the brand or company, and ease of access to a CBD product. Other factors influencing purchase decisions for CBD based products include recommendations from friends or family, as well as additional insights discussed below.

Product Form

  • One of the main factors that contribute to or determine the outcome of purchase decisions for CBD based products is its "product form." Product form is the most important factor considered by the most significant percentage (52%) of CBD consumers when deciding on CBD products.
  • CBD comes in various forms such as oils and tinctures, vapes, edibles, topicals, gummies, among other products.
  • The type of CBD product that CBD users are most likely to consider buying is gummies.
  • Some seven among 10 product types of CBD products that users are "most likely to consider" purchasing includes edibles with baked goods (57%) as well as chocolate (45%)

Product Potency

  • The second most important factor that contributes to or determines the outcome of purchase decisions for CBD based products is the "potency" of the product. The potency of a CBD product is considered by 41% of CBD consumers before purchasing it.
  • Two CBD oil samples can both be in 30-milliliter bottles; However, one may contain 3,000 milligrams of CBD while the other may contain 6,000 milligrams of CBD. The stronger CBD oil will be the one with 6,000 milligrams of CBD in a 30-milliliter container, which is twice as strong when compared to the other. Consumers have to utilize twice as much of such a less potent oil to get the same dose.
  • Whenever the stronger CBD oil gets consumed in lesser doses (since the consumed quantity of the more potent oil is less than the amount required of the weaker version), consumers save money by opting for the more potent bottle.

Product Price

  • The fourth most important factor that influences the purchase decisions of consumers seeking CBD based products is its price. The price of a CBD product ranks "as the fourth most common" attribute that gets considered when making a purchase decision.
  • The product price of CBD products matters to consumers deciding on CBD products because the price of a CBD product helps consumers to determine its cost and assess "its comparative value in the market."
  • The cost of CBD per milligram is what matters for consumers buying CBD oils.

Familiarity with the Brand or Company

  • Familiarity with a company affects the decision of one in every three consumers (35%) when they decide on the CBD based product to purchase. About 35% of consumers are more likely to decide to buy CBD products from a company they are familiar with.
  • Familiarity (knowledge acquired) about a CBD product is an essential factor in influencing the purchase decisions of consumers seeking CBD based products.
  • Online knowledge acquired through personal research regarding a CBD product increases familiarity and affects the purchase decisions of about 43% of consumers of CBD based products.
  • The key to selling more quantities of a CBD product is education (educating both consumers, dispensary associates, health store employees, and physicians). CBD brands that are investing by giving consumers the required information for intelligent purchase decisions via trusted sources will find success (influence consumers to buy and sell more) in the future.
  • About 65% of CBD users prefer that well-known consumer product companies provide CBD products for them

Ease of Access to A CBD Product

  • Accessibility plays a vital role by influencing the purchase decisions of consumers seeking CBD based products. Nearly half (43%) of current CBD users want to purchase CBD products that are easier to access.
  • About 31% of users are more likely to purchase CBD-based (infused) products via a CBD brand website that they can access.
  • About 31% of users are more likely to purchase from an accessible cannabis dispensary, 24% from an online retailer, and 21% from a natural health foods store. Close to one in every three consumers (32%) are more likely to be influenced to purchase from a grocery store or drugstore than a dispensary if they have the required access to a grocery store or drugstore.

Promotion Such as Product Recommendations from Friends or Family

  • One of the major factors currently influencing the purchase decisions of consumers seeking CBD based products is related to the adverts/promotion they get relative to a CBD product. About half (47%) of CBD users reveal that dispensary associates are among the most trustworthy source of promotional information followed by friends & family (26%), and physicians (26%). Promotional information from health store employees affects the choice of CBD product to purchase in 23% of consumers, online content (23%), while user reviews affect the product purchase choice of 17%.
  • The promotional source plays an important role in influencing the purchase decisions of consumers seeking CBD based products. These sources include friends or family (39%), promotion via health store employees (16%), and promotion or information via physicians (11%) and knowledge or promotional content delivered via a dispensary associate (27%)

CBD Derivation

  • According to Cannabiz Media, "CBD derivation" is a significant/major (third most important) factor behind product form and potency currently influencing the purchase decisions of consumers seeking CBD based products.
  • CBD has various sources of derivation, including female cannabis crops like hemp and marijuana. However, CBD is found "more abundantly in hemp than marijuana." CBD is also contained (derived) from the trichomes of the hemp plant that mostly have prevalent flowers.

Research Strategy

The study investigates some factors currently influencing the purchase decisions of consumers seeking CBD based products. Cannabiz Media revealed several such factors. The study includes the advantages as well as definitions of the identified insights. Cannabiz Media operates a licensed database, which is the only verified source of leads used by the cannabis industry. The platform contains information relevant to over 56,000 licensed cannabis as well as 27,000 hemp product operators licensed across 42 states of the US. Cannabiz Media is a marketing & advertising company that has its headquarters in Guilford, Connecticut (USA). The study identifies significant (major) factors influencing the purchase decisions of consumers seeking CBD based products via the ranking of most influential factors by experts or the number of consumers impacted or influenced by a factor.

Part
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Part
02

CBD - Product Discovery

CBD consumers use online sources, recommendations from friends and family, dispensary associates, and television to learn about CBD information, including brands. When shopping for CBD, product form, potency, CBD derivation, and price are the four primary factors that go into selecting a CBD brand and product.

Discovering New CBD Brands

Personal Research Online

  • The number one way that consumers find out about CBD and CBD brands is through personal research online, as 43% of consumers stated they conducted research online before purchasing CBD.
  • However, despite the high frequency of online research when searching for CBD information, online sources are only trusted by about 23% of consumers.
  • Consumers are particularly interested in medical journals and other "third-party" information that provides evidence of safety and efficacy.
  • Searches for "cannabidiol" or "CBD" increased by 160% between 2017 and 2018 and are expected to increase another 117.7% between 2018 and 2019.
  • In April 2019, "cannabidiol" and "CBD" were searched a combined 6.4 million times and was the "fourth-most searched health-related topic that month."

Recommendations from Friends and Family

  • While many consumers use the trial and error method of learning about new products (39%), consumers also turn to friends and family when finding information about CBD brands and other information (29%).
  • Friends and family are also the most trusted source of information from 26% of respondents.

Dispensary Associates

  • While dispensary associates are used less frequently for information on CBD (27%), they are considered the most trustworthy source for information on CBD products, with 47% of consumers saying they trust dispensary associates more than any other source.

Television

  • Since the top-selling hemp-derived brand in the U.S. is Stanley Brothers' Charlotte's Web, and this was the brand and product highlighted in the documentary "Weed" by CNN reporter Sanjay Gupta, it is clear that many users discover new brands from television.

Drivers for Switching CBD Brands

  • When shopping for CBD brands and products, most consumers first look at the product form (52%), so brands that offer a variety of forms are going to fare better with consumers who may switch brands.
  • Second, consumers look at potency (41%). Brands that offer products that meet the potency needs for consumers are positioning themselves to capture market share.
  • Following closely behind potency is CBD derivation at 40%. Some CBD consumers want hemp-based products and others want THC-derived products. This will factor into switching products.
  • Price is fourth on the consideration list at 39%. Brands that offer the first three factors on the list at a perceived value to the consumer may convince them to switch.

Research Strategy

To determine who people discover CBD brands and what drives people to switch or try out new CBD brands, we began our research with industry studies from sources such as HelloMD, Brightfield Group, and High Yield Insights. We were able to find information on how people educate themselves about CBD and what drives them to purchase a CBD brand or product, but there was no data specifically on discovering new brands or why they switch to other brands. Therefore, we changed strategies and attempted to find this information from industry publications such as HEMP Magazine, Hemp Industry Daily, CBD Journal, and others. Unfortunately, we only found information on CBD user demographics and the market in general. We then decided to look at CBD marketing publications to see if they had published any data on which marketing methods help customer discover new CBD brands or lead them to switch CBD brands. There were plenty of marketing guides to CBD products and tips for branding CBD products, but there were no insights into consumers discovering brands or switching brands.

Therefore, we decided to assume that people discover CBD brands in the same way that they learn about CBD in the first place, which is the information found in the initial surveys we uncovered. We also assumed that the factors that influence a consumer's purchase of CBD brands and products would also be the factors that drive them to change products. As such, we used the information in the customer surveys to provide the insights herein.
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