A Definitive Guide to CBD Consumer Insights

Consumers are everything. They drive industries forward, shift them around, and even have the power to phase some out. For this reason, businesses need to understand their current and prospective consumers in order to effectively market their products and grow their company.

 

In emerging industries like CBD, consumers don’t know what products they want because they don’t know what is possible yet. Successful companies bridge this gap by looking at a combination of survey results, social data, market forecasts, and public information to deeply understand consumers and their needs. 

 

Most brands with this approach aim to make decisions from their own consumer data (assuming they can pull insights in a clean manner...or have the time!) However, the challenge comes from ensuring this data is truly representative of the rapidly moving market while extracting the proper insights in the first place. Consumer segments can change rapidly, so it's crucial for brands to identify and understand the appropriate ones that align with their brand.

 

In 2020, industries around the world were severely impacted by the pandemic -  including CBD. The combination of price compression, store closures, and increased CBD use led many consumers to divert their CBD purchases online. This heavily impacted brands whose primary focus was getting in brick-and-mortar stores. However, brands with a strong direct-to-consumer strategy and online presence were well-positioned to capture those consumers moving online. Because many consumers were new to the CBD e-comm experience, they may have brought different preferences and shopping habits that brands had to adapt to.

 

As consumer behavior shifts, brands can use a combination of social listening, survey data, and other tools to properly respond. Consumer insights provide a complete view of the types of people that currently are and could be your next customer. This fuels impactful messaging, compelling products, and potentially lifelong relationships with greater returns. 

 

Who is the Target Audience for CBD? Know Your Consumer Demographics  

A little bit of consumer research goes a long way. Demographics are the basic foundation for revealing deeper customer insights. Segmenting a consumer population by using demographics allows companies to not only determine the size of a potential market, but also make decisions on new products, marketing strategies, and even content. Demographic insights can include: 

 

  • Age 
  • Gender 
  • Income 
  • Sexuality 
  • Ethnicity 
  • Marital Status 
  • Education 
  • Parental Status

CBD consumers of all different demographics will have varying behaviors. This will be seen across factors like product preference, frequency of use, and average spend per product. Married women over 50, for example, may prefer low-dose CBD edibles while married men 20-30 years of age may prefer high-dose tinctures. Changing one or two demographic attributes in your analysis can drastically change what the data tells you. 

 

Analyze Usage and Paths to Purchase 

Millions of consumers are entering the CBD market as it becomes more mainstream. Brightfield Group estimates that by 2025, the CBD market alone is expected to reach $16.8 billion in sales! The amount of interaction between consumers and companies on this level provides more accurate CBD data — specifically a better understanding of how different consumers use and purchase CBD. This means usage rates, dosage preferability, where consumers buy, and what product types they look for. These insights are achieved by breaking down 4 simple questions: How? Why? What? And Where? 

 

How

How consumers use CBD depends on many variables. As mentioned in our previous example, demographics are an important variable in preferences of CBD consumption (e.g., edibles, concentrates, topicals, etc).  Frequency of use is another important factor as brands look to establish a place in consumers’ lives based on how present CBD is throughout their day. Recent data from 2020 shows that the majority of purchasers consume CBD every day (with the second largest segment consuming only 2-4 times per week). 

 

CBD consumer insights

Source: Brightfield Group CBD Consumer Insights, Q4’20.

N=5,000

 

Why

Consumers may use CBD for a variety of reasons. Building a user persona by understanding the ‘why’ can drive everything from your products and brand messaging to distribution strategy. CBD for medicinal purposes is widely prevalent and used to treat conditions ranging from anxiety to epilepsy. The use cases for CBD are steadily increasing as more clinical trials explore its benefits. 

Source: Brightfield Group CBD Consumer Insights, Q4’20.

N=5,000

 

From a brand perspective, consumers consider or purchase a particular brand based on how they perceive it. The attributes and descriptors they use to describe the brand provide insight into this perception. 

 

Top CBD brand attributes include:

  • Reliable
  • Trustworthy
  • Helpful
  • Calming
  • Authentic
  • Popular
  • Caring
  • Wholesome
  • Innovative
  • Fun

Top CBD brand descriptors include

  • Helps with relaxation
  • High quality
  • Helps with my condition
  • Improves general well-being
  • Easily Available
  • All Natural
  • Socially Responsible
  • Eco-friendly
  • Industry Leader
  • Organic

 

This information, combined with understanding customer satisfaction, can provide a CBD brand a detailed look at their competitive set and help them hone in on a stronger brand strategy. The CBD brand landscape is extremely crowded and loyalty is still relatively low (though steadily increasing). If “trustworthy” and “high quality” are highly mentioned across the top brands, those are now table stakes. Those brands, and their hundreds of competitors, need to further differentiate themselves by carving out a brand niche. The eco-friendly, socially responsible brand may still compete with the innovative, fun brand, but they will likely attract two very different consumer segments.

 

What

CBD’s molecular makeup allows it to be very malleable when infusing it into other products. There is a wide range of CBD product types that come onto the market and interest many consumers to purchase for varying occasions. Edibles, for example, can be found in product types like baked goods, drinks, and candies/gummies. Entire sub-categories created from a single product type allow for plenty of consumer choice and room for brand innovation. 

CBD products

CBD can be consumed through various product types.

 

Where

Where consumers buy CBD is ever-evolving. In 2019, we saw the first large retailers bring CBD onto shelves, significantly increasing availability and awareness to the general population. Since the start of the pandemic, brick-and-mortar retail took a significant hit, while online sales soared and continue to hold steady. As uncertainties become more clear, we expect consumers to continue leveraging online channels along with an uptick in specialty retailers, dispensaries, and pharmacies.

 

What are the latest CBD channels  & consumer trends?

 

Understanding the ‘who’ ‘what’ ‘where’ and ‘why’ are very foundational to robust consumer insights (and we’ve only scratched the surface here). Having data-driven insights on the reasons consumers spend their money on certain CBD brands and products is the key to setting up your marketing campaigns and sales strategies to win. 

 

Understand Personality Attributes and Psychological Motivators to Buy 

Buying decisions are both emotional and logical. A buyer (of any product) is dissatisfied with something and they are looking for a solution, even if it is often unclear what that something is. Our brain develops and finalize purchasing decisions while emotions help justify them.  

 

People are more likely to respond to product and brand messaging that speaks to who they are on a psychological level. Each person aligns with a set of psychological constructs that can be tapped into to help drive purchasing decisions. These are some of the most common: 

 

  • Reward & Incentives – Behavior is dictated by a desire for external rewards 
  • Power & Authority – Behavior is dictated by the perceived ability to take action and make changes in one’s life or to influence others. 
  • Belonging & Community – Behavior is dictated by membership, influence, and a shared emotional connection 
  • Achievement & Accomplishment – Behavior is dictated by external or internal goals 

 

From a brand standpoint, honing in on messaging and positioning can relieve gaps in your purchase funnel. If you know many consumers are aware of you but are not buying, then you need to focus on getting them to consider your brand. And that is all about positioning. Positioning can take many forms - the packaging you choose, marketing copy and tone, imagery, channel strategy, to name a few.  Many of these answers are rooted in the psyche of the consumers. Understanding what really motivates them to buy something can inform a stronger brand and product strategy.

 

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Leverage Consumer Interests  

CBD is often a small part of the average consumer’s day. They have jobs, workout routines, hobbies, and social lives. By understanding who they are outside of CBD, you begin to add another layer of deeply relating to your CBD consumers. 

 

From sports, fitness, music, and arts, it is easy to get overwhelmed with how consumers spend their time. It’s important to break them out and categorize them. We took to social media listening to gauge the interests of CBD consumers and this is what we got: 

 

  • Fashion & Beauty 
  • Food & Travel 
  • Health & Sports 
  • Home & Community 
  • Music & Arts 
  • News & Pop Culture 

There are certain categories here that rank much higher depending on various user personas. What is most important, however, is understanding the relationships that these consumers have with specific people, brands, and organizations on the internet. By understanding brand preference (i.e., Target vs. Walmart) across the social landscape, you can drive partnership and content strategies that resonate.

 

Follow the Conversations 

The content that people put out on social media can be a gold mine for brands and consumer insight enthusiasts. Social media gives you the opportunity to understand who and what the conversation is about within the world of CBD. 

 

From managing pain and self-care, boosting fitness, and dietary supplements for pets, consumers are discussing CBD in ways that continue to influence the innovation of new products and product segments. 

 

Social-driven insights on conversations can drive product and consumer-focused decisions as well as influence some of your biggest business decisions.

 

Last updated: Q1'2021