Omnichannel is everywhere
As the editor of DSN, I decide what stays in print and what gets cut. Spatial limitations dictated that this snippet from our Amazon story had to go. But in the age of the omnichannel shopper, where every retailer competes against everyone else for a bigger share of the customer’s wallet, how can you do an in-depth profile on the world’s largest online retailer and not talk about omnichannel?
Amazon, even without stores, faces many of the same challenges as any other retailer. "It’s certainly a concern," Chance Wales, director and category leader of U.S. health and beauty, told DSN as part of a wide-ranging interview. "Wherever the customer wants to be when they want to make a purchase — we want to be there."
While Amazon tests some pickup at retail solutions like Amazon Locker with such brick-and-mortar retailers as Rite Aid and others, its work with mobile is probably a better indication of where Amazon thinks it can win in health and beauty in the omnichannel space. "Our mobile app allows you to do a lot of the things you can do on the normal site — things like subscribe to an item, manage your subscriptions, etc.," all by scanning an item with a mobile device.
Why is Amazon on the cover of DSN? Amazon has redefined the customer experience in many categories and is becoming a force in health and beauty. In this issue, DSN takes a deeper dive into what it means to do business with Amazon and what success looks like in an all-digital environment.
Active promotions drive sales
SHELTON, Conn. — Actively promoting an over-the-counter medicine outside of the retail box not only drives foot traffic, but it helps increase sales across households with a higher income and also more heavily indexed OTC product consumers, TABS Group CEO Kurt Jetta told attendees of a webcast covering a recent TABS Group Consumer Value Study. And while passively promoting at the shelf also pushes sales higher, the return on promotional investment is not nearly as robust.
The average shopper regularly takes advantage of two passive promotions — including everyday low price, store brand, bonus/value sizes. Comparatively, the average shopper regularly seeks out 2.2 active promotions — including limited-time offers, coupons or FSIs.
"There are a lot of shoppers out there actively searching for deals," Jetta noted. "[While] mainstream tactics are still the predominant ways that consumers search for value," he noted, almost half of the consumers who actively "shop for deals" are people who strongly agree that they will switch their outlet of choice to find a better value for the products they like.
That’s important because those active deal seekers buy considerably more products as compared with shoppers who only seek value at the shelf, Jetta said. "There is a very strong relationship between the number of purchase occasions and the number of active deal search tactics that consumers use," he said. The heaviest active deal seekers represent 14% of the buyers and 19% of the purchases, "and they make twice as many purchases per buyer as the lowest [active deal seeker] group, which represents 22% of the buyers and 14% of the purchases."
"There is no more efficient path to appeal to heavy users than frequent and aggressive promotional support," Jetta noted. "The key is to structure promotions so that they are profitable."
Conversely, retailers who go to market almost exclusively with passive promotions, such as the everyday low price tactics employed by chains like Walmart or dollar store operators, may be missing out on the heaviest OTC buyers, according to Jetta. "[EDLP players] are capturing a lower share of the heavy-deal buyer, and the data is suggesting it’s because they are not providing these active deal tactics," Jetta said. "Only one-third of those shoppers are content with EDLP or one other passive tactic. Two-thirds of them employ at least two active search strategies, meaning that EDLP alone will not maximize your quest to appeal to that heaviest buyer group."
Out of 1,000 consumers polled in March, 87.5% self-described as heavy OTC users and accounted for of OTC purchases.
The beauty of health and wellness
While beauty may be in the eye of the beholder, this month’s Patient Views seeks to better understand beauty in the eye of the patient. AccentHealth viewers — 73% of which are female — were surveyed as to the relationship between health and beauty, as well as their purchasing of personal care products in the areas of hair care, body care, oral care, cosmetics and more.
Results from the nearly 700-person study, fielded in April 2013, show a meaningful correlation between consumers who are proactive about their health and caring for their physical appearance. Sixty-one percent of respondents indicate that looking their best is an important part of how they measure their overall health; however, this grows to 73% among those who are most proactive about wellness. Among those most proactive, 94% assert that physical appearance is important to them.
Due to this relationship between wellness and beauty, consumers consider the "health quotient" when making purchase decisions. According to respondents:
- When asked about attributes associated with personal products, "health and wellness" is the most common response, followed by confidence.
- In addition, health benefits are among the top characteristics playing a role in personal product selection.
AccentHealth finds that more than half of viewers make personal product purchases when filling a prescription at the pharmacy. This is likely attributed to the fact that these types of purchases are most often made at locations of convenience and health destinations — mass merchandisers and chain drug stores. Showing signs for further growth, 69% indicate they would make a personal product purchase at a chain drug store in the future.
The expansion of wellness from pharmacy to the beauty aisle appeals to consumers surveyed. Approximately half of respondents indicate they would take advantage of beauty services (e.g., manicures) offered in-store. Of those, 56% would switch their pharmacy to gain access to such services.