December 28, 2018

Changing Cannabis Retail (For The Better): AMA with Peter Horvath

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Peter Horvath built his career in retail. Working in leadership and C-suite positions in household name brands such as Victoria’s Secret, DSW, American Eagle, and The Limited, he lived, breathed, and learned retail success from the bottom up. And now he’s set his sights on a new industry: Cannabis.

Horvath’s new company, Green Growth Brands (GGB), hopes to upend the current cannabis retail and CBD personal care status quo in almost every way: From the consistency of the products, to the layouts of the stores, to the customer interactions and touchpoints.

His argument is that as cannabis and CBD become more available, the quest will no longer be to simply provide product, but also a store with “emotional branding” and an experience in order for customers to come back again and again. This focus on the retail side as well as the quality of the products is almost revolutionary in the industry, and one he and his executive team of former retail and consumer packaged goods experts are uniquely posed to conquer.

Peter recently hosted an “Ask Me Anything [AMA]” on Reddit to explain how and why GGB’s model and expansion will work to customers’ favor. Here are some of the biggest takeaways.

Question: What differentiates GGB’s approach to brand building within the cannabis industry?

Horvath: We have decades of experience competing for consumers in saturated and mature markets, and coming out on top, building the No. 1 lingerie brand in the world, No. 1 personal care brand in the world, No. 1 specialty denim brand in North America, and No. 1 specialty shoe retailer in North America. Not only have we been on teams that dominated in their category, we were at the leadership table, first developing, then executing the strategies that led to these results. Many of us have worked together two, four, five times, we can finish each other’s sentences, and we have mastered the same process for winning, and keeping loyal customers.

That positions us for rapid growth in the cannabis space. We admire our competitors, some of them have been in this industry a little bit longer than us. But not much longer, and from what we’ve seen, no one has more experience earning loyal customers than us.

Question: What types of cannabis products, services, and experiences do you want to bring into the umbrella of GGB?

Horvath: The strongest brands are not of meaningful scale and seem to be backward looking … anchored in cannabis legacy culture, legacy products, legacy nomenclature. They serve the existing market of legal cannabis users, maybe six million people, but they may not be strong or relevant enough to capture the 14 million new customers entering the category in the coming years.

Our whole focus is to earn customer loyalty with remarkable experiences across all touchpoints—brands are only one ingredient of the recipe. Digital is essential in addressing the functional and technical needs of consumers, but physical experiences (stores, kiosks) are what make customers sticky. And making those experiences emotional and remarkable is essential … and plays to our experience, and strengths.

Making assortments easy to navigate, delivering constant newness, surprise and delight, engaging with customers how THEY want to engage. Surprising, unique, personal, engaging, and repeatable. It’s hard to do, but we have experience doing it over and over in different product categories, and we are primed for another repeat performance.

Another point regarding branding, 72% of consumers don’t trust national brands. 64% of consumers believe that retailers don’t truly know them. Authentic, LOCAL, personal matters the most. That’s why this is the best time ever to introduce new brands, especially if you understand how to make them relevant to the customers that are in our future. If it works for them, it will also work for the existing customers who have been tolerating poor experiences to get product.

Keeping this in mind, you wouldn’t be as interested in patterning Apple, Starbucks, or Amazon. We think Glossier, Lululemon, Sephora, MAC (Cosmetics)make more sense to pattern after.

In fact, our marketing director Dan Z., at The Source in Nevada (a killer local cannabis dispensary) thinks cannabis is more like cosmetics than anything else. If you are out of product, bare cupboards, you are anxious.

Question: Do you feel women are an underserved demographic in this new marketplace? Are you trying to make cannabis more approachable and less taboo?

 

Horvath: We are intent on creating remarkable customer experiences that appeal to ALL consumers, legacy and new.

 

Women are underserved by the current stable of cannabis retailers, some experiences are better than others … Again, experiences thus far are product-focused. By being consumer-focused, you need to recognize the wants and needs of the consumers you don’t have, and you can do so without alienating the consumers you do have.

Question: The GGB team has great branding and business experience, but currently the CBD and cannabis markets are highly regulated. What’s GGB’s strategy for successfully navigating this territory?

Horvath: We are excited to be selling test quantities of our Seventh Sense CBD products in a couple of national retailers right now. The selling is surprisingly good for products in the personal care category, exceeding our sell-through expectations. These are products never before seen, in a brand that’s totally new, and without ANY marketing.

We will be rolling to bulk orders in 2019 and will share our wholesale partners when appropriate. We also anticipate launching our web store and CBD (category killer) kiosks in February 2019.

Regulation and compliance are paramount. It may be a little bit more cumbersome than established product categories, but the growth trend suggests it’s worth it.

The takeaways

Peter Horvath and GGB are ready to take the retail cannabis world by storm by providing quality products to customers within a retail experience that appeals to all users, that is easy to navigate, and is emotionally branded. This is what he’s spent his entire career doing, and what his team has as well.

GGB is getting incredible buzz, and 2019 will be a big year for them. This is surely a cannabis company worth keeping an eye on.

 

Bloomberg Business

"Cannabis Company Backed by Retail Fortune Eyes East Coast Expansion"

The Province

"Opinion: The future of cannabis retail is simple, integrated, and welcoming"

CBC Business

“Unlike big names in production at centre of cannabis frenzy, company plans to focus on retail side of things”

Tech Startups

"Former Victoria Secret executive raises $85 million for cannabis startup…"

The Growthop

"Green Growth Brands completes upsized raise of $85 million to satisfy investor demand."

Benzinga

"Green Growth Brands announced it has completed a raise of C$85 million ($65.7 million) in a private placement…"

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