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Guest Column: Promotion optimization lures shoppers

BY Mike Kantor

A funny thing happened on the way to the cash register. A coveted diabetic shopper intent on saving money saw promotions that resonated with value. She was hooked.

On this trip, promotions influenced her to expand her basket from just insulin to related care items, foot cream and a sugar-free treat. It was as if the retailer and suppliers completely understood her daily regimen, lifestyle, shopping behaviors, willingness to spend and purchase triggers. Indeed, they did.

How? They mastered the process of promotion optimization.

Together they share insights and data; segment and target the audience; strategize; accurately predict demand; establish the right message, price, feature and display; and execute. They work side by side in a refreshing, fully accountable, collaborative manner that maximizes event return. Then they refine for even better results the next time during post-event analysis.

Stores benefit on category and total-store levels from bigger baskets, more cross-purchases and more trips. Stores that optimize promotions differentiate and become stronger destinations.

In the high-performance world of promotion optimization, trading partners grow this way over and over again, through thousands of successes per day. Each is a triple-win for consumers, retailers and manufacturers. The most productive chains and consumer packaged goods companies already are building a competitive edge through this fast-rising discipline.

The evidence is clearer every day. It is documented in compelling research findings from the new “Charting Your Course to Trade Promotion Optimization” study, done by POI with Accenture, Gartner, SymphonyIRI Group and other experts. 

Among the study findings:

  • 90% of trading partners that have fully implemented trade promotion optimization, or TPO, solutions have increased profitability;

  • 60% of trading partners that have fully implemented TPO solutions have increased revenue, improved forecasts and plans, and decreased time spent on promotion-related activities;

  • Retailer and manufacturer profits and revenues increase as companies become more mature in their TPO implementation; and

  • More than 85% of national chains and 55% of super-regional retailers welcome the use of TPO with consideration of data availability.

To help ensure that retailers and manufacturers fully harness the power of promotion optimization into the future, POI has innovated a unique, accredited higher education breakthrough with Saint Joseph’s University. This program certifies retailer and manufacturer executives as Certified Collaborative Marketers (CCM) once they learn to achieve sustainable, best-in-class performance results from their collaborative marketing efforts. The CCM program is designed to teach retail and consumer packaged goods executives how to blend their respective cultures, personnel and technologies to maximize promotion collaboration success, as well as seed future generations of managers with a collaborative mindset that will enable them to act effectively on each other’s business perspective and needs.

The future of marketing and merchandising is a shared responsibility, growing more consumer-centric and collaborative as promotion optimization delivers greater return.

To find out more about the study or the CCM program, contact [email protected]

Michael Kantor is CEO and founder of the Promotion Optimization Institute and a former SVP of Drug World Pharmacies.

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This one’s for you, Aunt Agatha

BY Rob Eder

It’s about 2:30 p.m. on Tuesday. I usually wait a couple more days to write my column, but I don’t need to think any more about what to write.

My first insights into retailing came to me by way of my great aunt Agatha Mastromatteo-Corsello-Langella at the boutique she owned just off the corner of 72nd Street and Broadway, here in New York City. As I write this now, it has been less than three hours since she passed away in the company of her two sons Michael and Glen.

I don’t have any brothers or sisters; neither did my mom. My grandmother did though, and her sister Agatha lived right across the street from her. I grew up less than three blocks away from them. I don’t remember when it was that I first learned that Michael and Glen weren’t my older brothers, but it was quite a shock to me at the time; we were all very close. My grandmother worked at Agatha’s Boutique; so did my mother.

Some of my earliest memories are of life “behind the scenes” at Agatha’s Boutique. For those of you who have traveled to Manhattan’s Upper West Side to sample one of New York’s grandest culinary attractions, Gray’s Papaya King, my aunt’s store was right next door. Today, it’s a Vitamin Shoppe.

But in the ’60s, ’70s and into the ’80s, the signature black-and-white polka-dot sign that marked Agatha’s Boutique was like a beacon of class and dignity on what used to be a pretty rough corner — back when gangs called the Vampires and Egyptian Kings ruled Amsterdam Avenue, and a traffic island called “needle park” was the center of a neighborhood that felt a lot more like the wild, wild west than the Upper West Side. Sure, she’d been robbed before; but she didn’t scare easily.

She had it all — brains, class, grace, beauty. And she had bigger balls than John Wayne. She was tough. She was resilient. She didn’t graduate from college, but you’d never know it; she was a progressive thinker before there was such a thing.

And, at Agatha’s Boutique, she did it all, too. She was the head merchant. She was in charge of marketing. And visual merchandising. Operations and loss prevention, too. She WAS Agatha’s Boutique; the physical embodiment of her own dream self-actualized right before my very eyes. Mary Tyler Moore had nothing on my Aunt Agatha.

And, like her sister, my grandmother, and my mom, man, could my Aunt Agatha cook. If you’d ever tasted her “gravy” with the meatballs, and the sausage and her homemade braciole, her baked ziti, her bacala, etc., it wouldn’t be so hard to imagine a 16-year-old, 295-lb. version of me. Luckily, I was always tall — just like my Aunt Agatha.

At the height of her success, my Aunt Agatha was also a divorced, single mother. And in retrospect, it is easy for me to see today how far ahead of her time she actually was. For my mother, Agatha — like her sons, roughly 10 years older than I, are to me — was like an aunt AND an older sister. She was the portrait of a modern woman, and she was a role model for my mother. When I was a kid, I wanted to be just like my cousins Michael and Glen. I wore their hand-me-downs. I played with their old toys. I followed in their footsteps from the School of the Blessed Sacrament on W. 70th Street to Camp Winaco in the woods of southern Maine to St. Francis Xavier High School all the way downtown. It was the path that Aunt Agatha blazed for her sons, to keep them safe and give them a better life. It was the same path my mother chose for me. So, I can honestly say that I don’t know who I would be today without my Aunt Agatha.

There’s a line in an Elton John song that goes, “I know it’s not much, but it’s the best I can do.” This is the only way I know to make a lasting tribute to someone I think is important. I know none of you reading this ever met my Aunt Agatha, but I wish you had. You’d have hired her to run your stores.

So, excuse me if this column doesn’t have a whole lot to do with the drug store business, but a few hours ago I stopped thinking about what I was going to write.

Rest in peace, Aunt Agatha. I will miss you always.

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Manhattan Institute studies state of clinics

BY Antoinette Alexander

NEW YORK — The Manhattan Institute has come up with a novel idea to help New York state slash its healthcare costs by a hefty $350 million by 2020: Expand access to retail health clinics.

Sounds simple enough, right? Think again.

To discuss the potential costs and benefits of such a move, several experts gathered for a policy forum on Feb. 16 in Albany, N.Y., hosted by the Manhattan Institute and the Empire Center for New York State Policy. Serving as the foundation of the lively discussion: Manhattan Institute’s new research report, “Easy Access, Quality Care: The Role for Retail Health Clinics in New York.”

Under the Patient Protection and Affordable Care Act, nearly half of New York state’s 2.6 million uninsured residents will acquire coverage by 2014, an influx of newly insured that will come amid an already critical primary care physician shortage and an overusage of emergency rooms.

According to the research, citing a 2010 report from Excellus BlueCross BlueShield, there were more than 640,000 unnecessary emergency room visits in 2008 in the 43 counties constituting upstate New York — or 44% of all ER visits in that region. This included more than 20,000 visits for sore throats and more than 22,000 visits for ear infections, two ailments that retail clinics routinely treat.

Despite the dense population and the clear need for easier access to affordable health care, the state has fewer than 20 retail health clinics (all physician-owned facilities) because opening in the state is extremely difficult with the existing regulatory structure.

“The impact that retail clinics have from a cost standpoint are pretty well-documented: 40% less than the cost of primary care or urgent care, and 80% less than the cost of an ER visit. I think the challenge now becomes finding a pathway to allow retail clinics to open and operate on a level playing field,” Lisa Loscalzo, managing director at Solera Capital and president of Solera Clinics, told Drug Store News following her participation in the policy forum.
The solutions to overcome the state’s burdened system, as suggested by the Manhattan Institute, are:

  • Repeal the costly regulatory structure for retail health clinics;

  • Create a licensure process to streamline regulation of one or more existing retail health clinic models; and

  • Allow nurse practitioners to practice outside of the state-required collaborate-practice agreement.

However, New York is not an isolated case. In looking at the retail clinic presence in the 30 largest metropolitan statistical areas, or MSAs, it comes as little surprise to find that seven of the top 10 MSAs with the lowest concentration of clinics by population are located in states with some of the most difficult regulatory hurdles: Texas, California and, of course, New York.

The challenges facing clinics in these states, as well as within Florida and Kentucky, vary — whether it’s constraints on scope of practice, a prohibition of corporate practice of medicine or stringent physician oversight regulations.

“We need to re-adapt our system and recognize places where the reality is patients will consume care in very different ways, find new ways to fit quality care into those places and encourage integration between care providers to raise the quality of care,” said Paul Howard, director and senior fellow for the Center For Medical Progress at the Manhattan Institute.

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