Case Study: Increasing Margins Without Slowing Sales

Industry: Cannabis Retail

Primary KPI: Units Sold and Category Margin Objective: Increase margins on a specific product category without sacrificing sales velocity

The Challenge

This cannabis retailer needed to improve margins within a specific product category, but demand elasticity was a major concern. In a competitive and price-sensitive market, the risk of raising prices often comes with fears of declining unit sales and reduced customer loyalty. The goal was to increase profitability without slowing sell-through.

The Strategy

Rather than relying on discounting or promotional pressure, we implemented a measured, data-driven pricing and merchandising strategy designed to protect velocity while improving margins.

Key tactics included:

• Implementing a modest, strategic price increase across all items in the targeted category

• Optimizing merchandising to encourage add-on purchases and increase perceived value at point of sale

• Supporting the change with a focused digital marketing campaign to keep the category top of mind with customers

• Ensuring pricing changes were supported by clear in-store presentation and staff messaging

The strategy balanced pricing discipline with visibility and demand reinforcement.

The Results

The results exceeded expectations.

Following the price increase, category margins improved while unit sales not only held steady, but increased. Over the following months, sales velocity continued to climb, demonstrating that the category remained highly relevant and desirable to customers even at the higher price point.

This outcome proved that thoughtful pricing, when paired with strong merchandising and marketing support, can increase profitability without negatively impacting demand.

The Takeaway

Price increases do not automatically lead to lost sales. When executed strategically and supported by smart merchandising and marketing, retailers can protect volume, improve margins and drive stronger overall category performance.