NACDS Successful Selling hosts nearly 200 vendors
LINCOLNSHIRE, Ill. New and emerging consumer packaged goods companies and brokers and sales and marketing executives battled the frigid Chicago weather to attend the NACDS Successful Selling & Walgreens New Vendor Days event held here this week.
The sold out event attracted just over 400 people, including nearly 200 vendors, more than 60 brokers and sales and marketing companies and about 40 Walgreens executives. The program, held at the Lincolnshire Marriott, officially kicked off Monday morning with an “Industry Overview” by Jay Forbes, vice president of Lebhar-Friedman, the parent company of Drug Store News. It concludes Tuesday.
The program was provided as a service of the NACDS Advisory Board through the Outreach and Business Development subcommittee to emerging niche manufacturers and others interested in entering or gaining additional traction at food, drug and mass.
Forbes’ presentation was followed by a robust lineup of speakers, many from Walgreens headquarter office, who shared unique business practices and the expectations of Walgreens as niche players work to bring their products to market.
“I think it is a very valuable industry service. We want to brand NACDS as a resource for learning how to bring product to market and want to take it to the next level,” Fitz Elder, NACDS chief member relations officer, told Drug Store News.
NACDS held its first such event, then dubbed Successful Selling to Drug, Food and Mass Retailing, last March in Chicago.
This year’s event afforded new and emerging companies with 20 minute meetings with Walgreens executives. It also enabled brokers and vendors to meet.
To help niche players gear up for their meetings with Walgreens executives and learn how to successfully bring their new products to market, the event featured a lineup of speakers. Among the highlights was a presentation by David Van Howe, corporate vice president of purchasing for Walgreens, who offered “The Retail Perspective.” Catherine Lindner, divisional vice president of marketing development of Walgreens, and Carrie Merritt, consumer marketing manager of Walgreens, discussed “Building Consumer Awareness and Consumption—Getting it Rung at the Register, The Role of Advertising and Promotion.”
Selling strategies ease Stick Scents entrée into mass
Beauty Bureau actually had made its first forays into the mass channel in the year before attending the National Association of Chain Drug Stores’ inaugural Successful Selling conference in 2007—the company made its mass market debut at NACDS Marketplace 2006. “Our prior experience had just been going to the gift-market shows,” said Laura Benz, executive vice president of business development for Beauty Bureau. “While we were very well received, some things we learned the hard way.” “Successful Selling really taught us how to differentiate our brand from other brands.” The show also gives new companies a feel for how to appeal to the large chain buyers—including expected advertising support, co-op fees, slotting and an assessment of what capital is necessary for a successful launch.
Following that Successful Selling show, Marketplace 2007 was a much more productive experience, Benz said. “I was more prepared to have my advertising and marketing for the product line presented to the buyers,” she said. “Because I [better] understood the value of the real estate I’d be taking up in the warehouse, as well as on the shelf.”
Knowing your customer—the retailer, as well as the consumer—also helps with the sell-through, Benz said. For instance, knowing what percentage general merchandise (in the case of Beauty Bureau) contributes to the overall retail revenue stream can help better position the product for that particular retailer, not to mention better manage promotional spends on a regional basis.
For new-to-the-channel vendors, Benz suggested test-marketing as an ideal way to get your toe into the water. “Don’t go for all 1,600 stores,” she said. “Your exposure is limited when you’re doing a test. If you do well, you can move forward more confidently.”
Beauty Bureau’s innovation was the introduction of a luxury product—a reed air-freshener diffuser—which is part of the trend toward greener products and priced for the mass market. And to make its product offering even more attractive to mass merchants, Beauty Bureau made exclusive fragrances available to retailers as part of its negotiations.
Maryann Mihalopoulos, who founded Beauty Bureau, started her business in 2001 after visiting Greece. According to Mihalopoulos, the air fragrance market was flooded with candles, incense and sprays that could be unsafe and/or toxic, suggesting that the greener, more decorative reed diffusers, to be branded Xela Aromasticks for the specialty channel, might be able to enter the market.
Originally positioned for luxury and specialty retailers, such as Dillard’s and beauty.com, Beauty Bureau later developed Stick Scents, the mass market equivalent, and cut production costs by using less-expensive packaging. Stick Scents launched with a suggested retail price point of $20 for an 8-ounce reed diffuser. The specialty market equivalent prices for $40, Benz said. The difference between the two brands is most apparent in the packaging, Benz noted. “Xela is not packaged for mass—it has more of an open [facing], so if it were to be dropped, it could actually break. Stick Scents is in a clear plastic tube,” Benz said, which is more amenable to the rigors of a mass market supply chain.
There is also a difference in the formulation, Benz added. Xela features more expensive aromatherapy oils versus fragrance oils in the Stick Scents.
Pharmacy gets reprieve in side-effects rules
ALEXANDRIA, Va. —Pharmacy leaders are breathing easier after the Food and Drug Administration agreed last month to postpone a new patient-information mandate.
The National Association of Chain Drug Stores hailed the FDA’s decision, which effectively gives pharmacies some breathing room in their efforts to comply with the regulation.
In an interim final rule published Jan. 3, 2008, in the Federal Register, the FDA reported it will give pharmacies until Jan. 1, 2009, to comply with a requirement to provide patients with an FDA-maintained toll-free number to report drug side effects. Pharmacies also will have to provide patients with a statement to contact their doctors for advice about side effects.
The newly published rules also give pharmacies some flexibility as to how they distribute the side-effects statement to patients.
The original rule, as proposed by the agency, required that information on a medication’s side effects be included in FDA-approved Medication Guides. “We also proposed that the side-effects statement be distributed with each prescription drug product…and dispensed to consumers by pharmacies and authorized dispensers in an outpatient setting,” the agency noted.
However, the FDA acknowledged the difficulties pharmacies and other health stakeholders would have implementing the new rule, and said it would hold off on the mandate until Jan. 1, 2009. “The FDA continues to anticipate that affected entities, including manufacturers of drug products, authorized dispensers and pharmacies, will need time to comply with the new requirements,” the agency reported last month. “Therefore…the agency does not intend to take enforcement action with regard to this interim final rule before that date.”
The FDA’s change of course perhaps reflects an improved climate for more effective dialogue between the chain pharmacy organization and federal health agencies. “NACDS worked closely with the FDA on the impact of this rule, and we are very appreciative of the agency’s sensitivity to pharmacies in complying with a measure that would impact the millions of prescriptions they fill each year,” said association president and chief executive officer Steve Anderson. “We look forward to continuing to work with the FDA to help chain pharmacies meet the requirements by next January.
“We also emphasize the need to raise awareness among patients that the toll-free number is for the sole purpose of reporting side effects, and that it provides no mechanism for patients to obtain medical advice,” Anderson added.