Editors Note: This story was written by Alanna Zavoico.
Seeing how Gen-Zers and Millennials account for nearly 40% of the entire cannabis market, it is critical for brands to have a deep understanding of these demographics in order to effectively grab their attention and favor. Thankfully, Headquarters (HQ) recently released a study, the HQ Cannabis Brand Affinity Report, in collaboration with The Statement Group, revealing Gen-Z and Millennial top interests, passions and values to better enable cannabis companies to elevate and amplify their marketing strategies.
The good news for cannabis marketers is that Gen-Z and Millennials are very open to being influenced and actually look to outside brands and influencers to lead the way in trends, meaning they play a significantly heavier role in guiding these demographics’ purchasing decisions. This is evidenced by the whopping 44% of Gen-Zers that have made a purchase decision based on an influencer.
“There are influencers with reach and influencers that make an actual impact on their followers. It’s all about deciphering between those two,” commented Danial Abrahami, CEO of HQ. “Wasted ad spend comes from brands that don’t understand which individuals have the most influence, and on a deeper level which have influence on their consumers. This report makes a distinction between these two possible marketing pathways.”
Of the 56 categories identified in the algorithms, Hip-Hop, R&B, fashion, influencers and gaming dominated among Gen-Z and Millennial lifestyle cannabis consumers in 2020. Gaming has always had a strong link with cannabis, but now the connection is concrete. Meanwhile, study supervisors were surprised by fashion’s high level of importance.
Some of the biggest names in Popularity Score, which ranks A-Listers and Top Brands with a large following, include Supreme (89), Virgil Abloh at Louis Vuitton (78) and A Bathing Ape (73). The Best Value fashion brands, or those less relevant to the average consumer but still significant to Gen-Z and Millennials, were Just Don (94), Union (91) and Staple Pigeon (90).
To compile the data, HQ utilized a series of proprietary algorithms that analyze social media connections between brands, influencers, their followers and so on. They ultimately looked at millions – sometimes billions – of connections in terms of what Gen-Zers and Millennials are following and engaging with online, then separated those into 56 different categories. This is broken out into Mindshare Tiers, which measure the significance of one category compared to all 56 categories and interests based on the number of accounts in a specific group the consumer follows.
From that distinction, HQ drills down into which are most important in order to uncover the specific individuals and brands that are highly relevant to each demographic, represented by their Value Scores. These signify the high-value opportunities that cannabis brands can utilize to reach their target audience at an affordable expense.
Their insight goes beyond the age, sex and location of the consumers available through other data providers or in industry overviews. This is the actual audience of cannabis brands in real-time, and who and what is significant to them.
“We dig deeper to lay bare the cannabis icons, top artists and leading brands that your consumers truly love and feel a personal connection with,” added Cory Jones, Founder of The Statement Group. “Their reach ranges from thousands to millions of followers, and it may surprise some marketers to realize that those in the former would provide a higher ROI than those in the latter. When you know exactly who your audience engages with, there is no guessing or wasted spending on marketing campaigns and partnerships.”
Why it’s important
According to Business Insider, Gen-Z spending power hit $143 billion in January 2020 and Millennials spend roughly $600 billion annually. Together they hold a significant amount of power in the market, yet are especially tough-to-reach demographics. This data helps cannabis brands hone in on what is important and where is best to spend their money. Using this report as a guide, they don’t have to spend as much of their budget in their efforts to reach their audience in a meaningful way because they understand which brands and influencers are most effective and relevant to their target consumers.
“In a day and age where building communities around brands and establishing authentic connections is table stakes for cannabis brands, this is extremely critical for brands to consider when putting together messaging and campaigns, and who they are partnering with for marketing,” added Abrahami.