NexTech AR have recently launched their augmented reality (AR) dispensary experience for legal cannabis providers. This technology will allow dispensaries to showcase products and educational information in true AR and 3D. The technology is available as a white label solution that is easily implemented in a dispensary’s website.
To discover more about the digital transformation of the cannabis sector, Digital Journal spoke with NexTech AR’s CEO Evan Gappelberg.
Digital Journal: How fast is the marijuana market growing in the U.S.?
Evan Gappelberg: The marijuana market is growing rapidly in the U.S. as more states legalize cannabis and it becomes more accessible. According to a study by Arcview Market Research and BDS Analytics, spending on legal cannabis worldwide is projected to reach $57 billion by 2027, with the largest group of cannabis buyers residing in North America. From 2017 to 2027, spending on cannabis in North America is expected to grow from $9.2 billion to $47.3 billion, that’s a more than $38 million increase in 10 years.
DJ: To what extent is the cannabis industry undergoing digital transformation?
Gappelberg: According to the Cannabis Consumers Coalition, more than 40 percent of cannabis users are between the ages of 21 and 35, making millennials the largest consumer segment of cannabis users. With the majority of millennials expecting a seamless transition between their mobile devices, computers and in-store experiences when interacting with a retailer, this creates a huge opportunity for dispensaries to create an immersive, informative shopping experience for consumers, both in-store and online through emerging technologies like augmented reality and 3D imaging.
DJ: Does augmented reality feature in this?
Gappelberg: The biggest opportunity for augmented reality in the cannabis industry is to aid in education and the online shopping experience. Both experienced and new cannabis users want to be able to fully examine and consume detailed information about different strains and products, as well as have immediate access to an expert who can answer any questions to help make a purchasing decision. All of this is possible through augmented reality by allowing consumers to have educational resources and a virtual ‘budtender’ right at their fingertips.
DJ: How is augmented reality assisting the cannabis sector in terms of customer experience?
Gappelberg: Any retailer with a physical storefront needs to contend with the ‘Amazon Effect,’ a phenomenon that describes consumers’ expectations of a retailer to provide an ecommerce-like experience in-person. They want access to all the resources they need to make an informed decision without having to engage an employee. This translates to dispensaries because, while they attract customers to the physical store, consumers want to be in charge of their own shopping experience. As cannabis remains a product that has to be sold in-person, it only makes sense that dispensaries will invest in augmented reality to not just attract their largely millennial clientele but also keep them engaged during their visits.
DJ: Can augmented reality help to drive up demand?
Gappelberg: One of the driving forces behind AR-adoption in the cannabis industry is easing the anxiety that some customers may feel about visiting a dispensary and going through the formal purchasing process for the first time. It creates a bridge that brings people into cannabis use by providing the opportunity to thoroughly research and examine products and educate themselves without the pressure that comes with being in-store with a sales rep. If a customer is able to browse cannabis products and learn more on their preferred device from the comfort of their own home, he or she is more likely to follow through with a purchase and return to the dispensary again.
From a general retail perspective, augmented reality has been proven to increase sales across industries. Recent research states 74 percent of consumers expect retailers to offer an augmented reality experience, and one-third reported they would be more likely to buy a product after using AR to preview it.
DJ: Can AR also assist with education?
Gappelberg: Education remains central to the cannabis industry as dispensaries and cannabis companies continue looking for new customers and more states legalize medicinal and recreational use. Augmented reality perfectly lends itself to this unique requirement by allowing users to preview products and access “virtual budtenders” who can provide detailed information on the different strains a dispensary has to offer. This offers a similar experience that customers would expect in an actual dispensary, having a professional walk them through various options, explaining their effects and viewing the products in a 360-degree effect.
DJ: Are there any examples of good AR?
Gappelberg: Recently, NexTech partnered with Cannvas MedTech Inc. to bring AR-powered cannabis kiosks to the Canadian cannabis market. These kiosks offer an AR-based cannabis learning program that will eventually be implemented into their network of learning kiosks across the country. The kiosks initially provided free, interactive educational resources to consumers curious about cannabis, but with the addition of NexTech’s technology, Cannvas plans to lengthen the interactions by creating a more immersive and engaging experience.
DJ: What else is in store for the future of the cannabis sector?
Gappelberg: As the cannabis industry continues to grow at a rapid rate, it will continue adopting emerging technologies to improve customer experience. At NexTech, we’re currently working on artificial intelligence that will use emotion to guide users’ online shopping journey. The AI is able to identify when a user smiles or frowns and will provide suggestions based on their positive or negative reaction to a product. For instance, if a smile or positive reaction is detected, the shopper might be prompted to purchase the product they are currently previewing or offered similar items they would enjoy.
The application of augmented reality will also go beyond dispensaries and online retail as the industry continues to grow and technology advances. There is potential to create experiences that will allow users to ‘visit’ greenhouses and extraction facilities to witness the cultivation process firsthand and gain a deeper understanding of the cannabis lifecycle.
