‘Healthcare renaissance’ transforms attitudes
Rite Aid chairman and CEO, and new NACDS chairman, John Standley (pictured above) discussed retailer-supplier partnerships during Sunday’s opening business session.
BOSTON — Chain pharmacy is roiling the nation’s troubled healthcare system with “disruptive innovation” and bringing new, more accessible retail health-and-wellness solutions to consumers, NACDS president and CEO Steve Anderson told attendees during the first part of the business session at the NACDS Total Store Expo Sunday.
Opening the general business session, Anderson praised the contributions of pharmacy retailers and suppliers to the nation’s healthcare system, and said the industry faces enormous opportunities as health care shifts to prevention, patient-centered care and greater accessibility. “Health and wellness — and patient-focused retailing — have gone mainstream,” said NACDS’ top executive. “The opportunity is greater right now than ever before. If this moment in time cannot be called a renaissance of health, wellness and consumer-focused retailing, then no time in our history will ever bear that name.”
Underscoring that, Anderson pointed to NACDS’ most recent “Victory Vision” opinion research survey of likely voters, conducted in July. “We asked whether pharmacies should be allowed to offer a variety of services: vaccinations … checking blood pressure … treating common illnesses through a nurse practitioner or physician’s assistant … administering rapid tests for flu and strep. In just one year, the percentage of people who support expanded roles for pharmacies went up,” he said.
“The acceptance was already high. But thanks to the activities within your companies, and thanks to NACDS telling this important story, today it’s even higher.”
The survey’s findings reaffirmed the importance that consumers place on their interactions with pharmacists. For instance, said Anderson, roughly half of respondents had spoken to a pharmacist about a prescription drug or OTC product over the past 12 months, and “more than 7-in-10 said a pharmacist’s recommendation on an OTC is important to them.” In addition, he said, 3-of-10 consumers surveyed had spoken to a pharmacist about a personal health question. “And — in a powerful statement about the relationship between the pharmacy and the front end — more than half said they purchased food or groceries at a pharmacy,” Anderson added.
A transformation in attitudes toward pharmacy is also underway in government, said Anderson. “Something very interesting is going on in Congress,” he noted. “There seems to be a race to capture the flag of healthcare innovation. And NACDS is positioning the health-and-wellness solutions of chains and suppliers as part of it.”
Value of partnerships
Taking the stage after Anderson, Rite Aid chairman and CEO, and new NACDS chairman, John Standley focused on retailer-supplier partnerships. Forging new and stronger alliances with its supplier partners was critical to Rite Aid’s ability to regain its momentum and to drive new health and wellness innovations, Standley said. And in the midst of a transforming health system and a new, more dynamic role for retail pharmacy, those partnerships will be key to the success of every pharmacy retailer and supplier, he noted.
“Healthcare delivery is undergoing historic change, placing unprecedented demands on our business while presenting enormous opportunities to grow,” said Standley. “As an industry, we have a once-in-a-lifetime opportunity to further support the health and wellness of our communities.”
That transformation “is already taking place,” Standley told TSE participants, “as additional pharmacies offer services like medication therapy management, immunizations and retail clinics. And though we’re supporting the health of our patients in more ways than ever before, … there’s even more we can do heading forward.”
That makes retailer-supplier alliances more critical than ever, he added. “The Total Store Expo gives us the opportunity to change by building stronger partnerships that fuel innovation throughout our companies. At the heart of this process is the relationship between suppliers and retailers.”
Those “supplier-retailer partnerships,” Standley added, have been “critical … to Rite Aid” as it transformed its business over the past four years.”
“Our transformation is unique, but it also has similarities to what’s occurring at other retailers throughout our industry,” he added. “As we continue this transformation, it must be said that NACDS events like the Total Store Expo have been vital to our company’s evolution, and have contributed to the culture of collaboration and innovation we share today with our supplier partners.”
As both major speakers wisely noted, the retail industry does, indeed, have a huge opportunity to positively transform healthcare, not just domestically but internationally. Five large companies have taken an early lead-- two traditional retailers and three, later arrivals: Walmart, Walgreens Alliance Boots, Apple, Google and Amazon. Walmart, and to a lesser degree, WAG/WAB, have one advantage: both have physical, community-based, retail-point--of-entry access, in addition to online entry---something that still counts in the hands on world of healthcare. Apple and Google both have global healthcare aspirations, notwithstanding public statements to the contrary, but Apple has taken the digital market lead and won the early allegiance of physicians, medical device companies and mobile customers. Amazon has online purchasing, supply chain management and delivery capabilities that the others still don't have, but not yet a vision of whether and how to play in the healthcare space. Rite Aid was a leader in recognizing and applying some of the capabilities of telemedicine technology, but is not a national force. Target completely missed the boat in the early 2000s. It had an unfettered opportunity to be the first national retail mover in the healthcare reform field, leveraging its broad customer demographics, its in town witness to what would become MinuteClinic and its creative marketing. Additionally, Target missed the opportunity to use its banking subsidiary and multimillion-issued smart cards to piggyback electronic medical records on the magnetic strip. Finally, it missed its electronic claims and money processing capabilities to clear medical transactions before customers left the store. The big red card, with one's up to date, online, medical history, could have been the credit card customers, patients and physicians would always want to keep-- before cloud storage and online processing came along. (In hindsight, Target's bank cards and management would have failed the sine qua non test for healthcare: privacy and security.) Ron Hammerle Chairman and CEO Health Resources, Ltd. Tampa, Florida
Mack outlines six factors for success
BOSTON — Retail and supplier executives got their start before Meet the Market Saturday morning with Dan Mack, managing director of Mack Elevation Forum, who shared the six factors that make “dark horse” companies — small- to mid-tier companies that have carved out a successful business for themselves — great.
“Dark horse companies are really authentic,” he told attendees of the session titled “Strategies for Success — The Secrets of Winning Dark Horse Companies.” “That’s part of the magic, [and] most of us are dark horses. The best organizations embrace [their dark horse identity], and they embrace feedback — that’s a common theme across the whole dark horse field, they embrace honesty.”
Of the six themes outlined by Mack, successful dark horse companies possess a strong identity, have a corporate culture aligned with that identity, tap hidden assets, pursue co-creation with their partners, create a blueprint to success and possess a culture of grace.
Starting with identity, companies need to identify who they intend to be, not what products they intend to make. “Your identity is actually very fixed,” Mack said. Companies who stay true to their identity are not followers, Mack said, instead they blaze their own trail with a sense of authenticity. “Retailers want organizations that create [a] path,” he said
Companies that are not true to their identity fall out of alignment, Mack warned. “Only 13% of employees think that they’re company is aligned to win. Most companies are really not relevant — 75% of organizations really don’t create value when you talk to the customer,” he said. There are four common blind spots that companies out of alignment have: their products are not unique, they underestimate the competition, they don’t know their customer’s agenda and they don’t listen.
Dark horse companies also exploit their hidden assets and share them with their partners, such as tapping collective knowledge, creating unique experiences for the consumer, bringing relationships to bear or manufacturing custom solutions. “The best asset you have may not be your products; it may be your intangibles,” Mack said.
“Intangibles and hidden assets lead into this other thing that dark horse companies do,” Mack said. “They co-create with the retailer; they co-create with partners; they listen to ideas [and] are really good at stimulating ideas.”
Mack noted that successful dark horse companies pull all of this together into a blueprint that helps them stay the course. “The blueprint uncovers your story [and] helps you learn your customer’s story,” he said.
In all, more than 700 companies, including 44 retailers and 22 suppliers participated in Meet the Market.
For more photos from Meet the Market, click here.
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Affordable indulgence for the value-driven shopper
BOSTON — The search for value continues, but it doesn’t always mean cheap. It means “make my life better.” And when it comes to the $45 billion beauty market, the opportunities are aplenty. That was a key message from Sunday morning’s Insight Session “Putting the Polish on Your Value-Oriented Shopper.”
To help retailers and suppliers see how this trend is playing out within the dollar store segment, presenters Larry Levin, EVP of IRI, and Jessica Kalinger, Coty Beauty’s director of consumer marketing and shopper insights, shared how they collectively identified value-driven consumers to understand their shopping preferences
It is no secret that today’s consumers remain cautious and that their shopping behaviors have been altered to reflect a “new normal.” What this means for shoppers — especially beauty shoppers — is that value is extremely important. In fact, as Levin pointed out, today’s wealthiest shoppers love deals, those economically concerned shoppers want accessible indulgence and new innovation, and beauty shoppers are trading down from premium brands.
“It is chic for people to drive a Mercedes in front of a dollar store. Dollar stores delivered 4% growth, significant growth in beauty because people saw the value,” Levin said.
Added Kalinger: “This growth trajectory has been going on for the past three to four years. So a couple of years ago, my team noticed this trend and took a step back and investigated what within beauty was causing these dynamics.”
Coty found that year-over-year it was the same three segments really growing the category within the dollar store channel:
- Hair care, mainly shampoo and hair coloring, is the leader bringing in two-thirds of the total dollar growth within the last year;
- Nail enjoyed 3.8% growth, representing $4.2 million — thanks, in part, to increased points of distribution; and
- Color cosmetics grew 2.7%, representing about $6.4 million.
Other points included: innovation sparks excitement, so innovation must remain strong; connect with your savviest shoppers and know your segmentation; and don’t forget about
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