by Megan Moyer, as seen in Healthcare Distributor magazine
April/May 2013
When a product is in development, meeting the needs of consumers is a foremost consideration. This principle also applies when planning product assortments for pharmacy front-ends. Because shoppers rely on multiple retailers to meet their health and wellness needs, and thanks to personalized technology-enabled connections, consumers are accustomed to retailers connecting with them as individuals. In other words, a one-to-many approach is no longer sustainable. Tailoring the front-of-store assortment to meet the needs of current customers — and to attract similarly focused consumers in the pharmacy’s geographic region — will give them a compelling reason to shop at your stores. The more you fine tune the front-end product selection to meet specific consumer need states, the better.
Recognizing that all stores in a given area are not homogeneous is step one. Step two is accessing reliable information about shopper demographics and preferences. HRG recently completed a research study, Independent Pharmacy Shoppers: Who, What, and Why? sponsored by the Healthcare Distribution Management Association (HDMA) and several of its members, that identifies who is shopping at independent pharmacies, and why. All of the data gathered led to the development of five distinct shopper profiles which are clustered around need states and shopping occasions.
These profiles are generalizations — excellent guides that can be used to segment customers, but not to be viewed as an end-all solution to defining any particular target market. Each store must evaluate its prescription patients and front-end shoppers to define health and wellness preferences and needs, as well as mine for services and general merchandise offerings that would help build sales and widen the customer base.
Once a store has defined and segmented customers, decisions about items and quantities to stock become easier. Demographic analysis of the store’s area offers a view of not-yet-customers, whose needs also must be taken into consideration. Assessing the competition reveals what attracts shoppers to those stores, thus helping the independent pharmacy develop its own niche in the community.
Independent Pharmacy Shoppers: Who, What, and Why? shares relevant insights. Results from independent pharmacy shopper interviews identified where else they purchase OTC products: mass retailers, then chain drug, followed by grocery and dollar stores. These same shoppers identified a similar assortment of retail channels for their personal care purchases: mass, then grocery, chain drug, and dollar stores. Interview subjects shared that the ability to “one-stop shop” and a perception of good prices motivated their retail choices. Inevitably, independent pharmacies must figure out how to differentiate themselves among all of these retailers to win repeat front-end business.
An earlier study conducted by HRG, Growth Drivers: Factors Behind Independent Pharmacy OTC Sales, identified five front-end categories that performed better in independents versus chain drug.
