Scottsdale, Arizona – September 13, 2004 - Only 56% of shoppers who fill a prescription actually buy something else in the store on the same visit, presenting major opportunities for retailers, wholesalers and manufacturers alike to better connect with their customers and increase total stores sales according to Leveraging the Connection of Pharmacy and the Whole Store, a new study released by the General Merchandise Distributors Council Educational Foundation. The study was researched and authored by Information Resources, Inc. and WSL Strategic Retail and was sponsored by multiple leading CPG manufacturers and retailers.
The study contends that a new consumer-centric approach, combined with a holistic view of the “whole store” rather than one segregated by merchandise categories, brands or retailer disciplines is essential to generating notable growth.
The study was released this week at the GMDC 2004 Health & Beauty Care Marketing Conference in Scottsdale, Arizona. The key message to retailers, wholesalers and manufacturers is to move beyond internal tactical concerns and focus on consumers and how they manage their conditions, not only with prescriptions, but also with products from the entire store.
“Consumers must be at the center of the programming, not retailers or manufacturers,” said Roy White, Vice President of Education, GMDC Educational Foundation. “This study provides compelling new insights, delivering a solid plan that is fundamentally different from most other approaches that have tended to focus on the condition. Our ‘connection-based’ approach gives retailers an invaluable new way of thinking about their business.”
The step-by-step breakthrough methodology addresses internal barriers, such as organizational silos, the identification of high value medical conditions, determining “connector” products between the prescription counter and the whole store, and building effective merchandising and promotional programs based on those connectors.
The study encompasses extensive consumer and retail research including insights from national and regional food and drug chains. The study leveraged IRI’s RxPulse™ and Consumer Network™ Panels and InfoScan® Point-of-Sale data, focus groups, shopper intercepts and an in-store retail test to provide a data-driven methodology for conceiving, executing, and evaluating programming that will prompt prescription customers to shop the whole store.
“Retailers, wholesalers and manufacturers are all looking for new and innovative ways to secure an increased customer base,” said Bob Doyle, Senior Vice President, Healthcare Solutions Group, IRI. “This research not only proves the opportunity for substantial whole store sales development, including pharmacy, OTC, and other categories, but also strengthens the store’s image as a destination spot for health-related products and services.”
Providing a definitive roadmap for increasing whole store sales, the study outlines a four-step methodology:
- Understanding the Real Barriers to Success
- Focusing on High Value Conditions and Connectors Between the Prescription and the Whole Store
- Creating and Executing Consumer Centric Programs
- Analysis, Evaluation and Refinement
The methodology was tested in drug and food stores, generating positive results. Of the fifteen categories monitored, rate of sales for ten increased, in seven of which the increases were significant. In addition, intercept research indicated that a large number of prescription customers were aware of the test program, said that it changed their impression of the store for the better, and would be likely to increase their purchases throughout the store in the future.
“The approach presented in this report requires new mindsets,” said Wendy Liebmann, President, WSL Strategic Retail. “Retailers and manufacturers have to acknowledge the consumers’ view of their condition. By reorienting thinking, retailers, wholesalers, and their supplier partners will be better positioned to develop an innovative and manageable ‘whole store’ approach based on consumer ‘connectors’ between pharmacy and products throughout the store.”
The complete study on Leveraging the Connection of Pharmacy and the Whole Store will be available on the GMDC Website at: www.gmdc.org and the IRI Website at www.infores.com.
About GMDC
GMDC is an international trade association representing GM/HBC/Pharmacy products to the mass market retail industry, providing industry perspective and information on critical issues to its members. GMDC is meeting the growing demands of the changing marketplace by expanding its retailer/wholesaler membership to include drug chains, mass merchandisers, drug wholesalers, value stores and e-commerce companies, in addition to its supermarket base.
About WSL Strategic Retail
WSL Strategic Retail is a marketing and retailing consultancy that works with worldwide clients to develop shopper strategy. Through its How America Shops® research it helps companies understand the evolution of “shopping life” and how to apply that learning to profitable strategies at retail. Clients include retailers, consumer packaged goods and service companies. More information is available at www.wslstrategicretail.com
About Information Resources, Inc.
Information Resources, Inc. is a leading global provider of market content, analytic services and Business Performance Management (BPM) solutions to the CPG, retail and healthcare industries. IRI's clients include the leading CPG, retail, and healthcare companies in the world. IRI's market content and analytic services provide these companies with market and consumer insights. IRI's BPM solutions uniquely combine its breakthrough enterprise analytics software, market content and analytic models to provide a total view of the market and to enable maximum business performance across marketing, sales and operations. IRI's solutions enable the consumer-driven real-time CPG and retail enterprise. More information is available at www.infores.com.