Cannabis companies all over the world have been scrambling to obtain market share in the legal space. Despite the growing amount of states becoming legalized gaining new consumers and competing with the black market has been a concern for business owners and politicians. Although there are many roadblocks for legal cannabis companies such as supply and demand issues, high taxation, slow license approval, and U.S. federal legalization at a standstill, the black market continues to be a go-to for many users.
One major issue is that Cannabis Companies are not targeting the most influential consumers in American, African Americans. Regardless of the taxes and higher prices of dispensaries versus the black market, middle-class African Americans have expressed their interest in purchasing from the legal market for convenience and safety. However, there is a shortage of marijuana brands that have connected to the black community, despite the buying power and brand loyalty.
As the Cannabis Industry grows an important factor for companies to gain and maintain market share is by connecting to the largest consumer base in our county, African Americans. African Americans want more for themselves and from corporate America, this is expressed by the dollars that are spent during our consumer journey, from brand awareness to purchase, Nielsen’s 2019 Diverse Intelligence Series (DIS) Report showcases the buying power of the African American consumer. While African Americans make up just 14% of the population, we are responsible for some $1.2 trillion in purchases annually. However, black consumers are showing an outsized influence in several key consumer categories, but are increasingly demanding that businesses do and be better socially and culturally.
According to the DIS Report:
- Blacks are 20% more likely than the total population to say they will “pay extra for a product that is consistent with the image I want to convey.”
- They are also more likely to say they shop at high-end stores including Saks Fifth Avenue (63%), Neiman Marcus (45%) and Bloomingdales (24%).
- More than half (52%) of African Americans find in-store shopping relaxing, compared with 26% of the total population.
- 55% of Black consumers say they enjoy wandering the store looking for new, interesting products.
- When shopping, African Americans are more influenced than the total population by store staff (34% more likely), in-store advertising (28% more likely) and merchandising (27% more likely).
Companies such as Target, Coca Cola, General Mills, Spotify and more have created platforms to appeal to the black community and reaping the benefits of consumer loyalty. However, there are a few key components to building a Like, Love, and Trust with African Americans. By targeting the experiences of African-American communities, brands can establish trust and loyalty among us. African-Americans are Americans, with a unique culture, but don’t forget that they contribute to the overall American culture. By showing African Americans that they are included in your brand, we feel more compelled to show our loyalty. There’s a demand that brands and marketers speak to us in ways that resonate, culturally and experientially, if brands want our business. Lastly, social media has served as a place where African Americans can voice their opinions and broker a seat at the table. By showing the faces behind the logo such as live streaming events and sponsorships at culturally inclusive venues will carry a lot of weight with African American consumers. In essence, cannabis companies will have to do more to gain the Black Dollar.
Despite, whites and blacks using an equal amount of cannabis annually, Black Americans are the most influential consumers in the U.S. and cannabis brands are missing out on building relationships with African Americans.
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