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Retailers sue Federal Reserve

BY Marianne Wilson

NEW YORK — A coalition of retail organizations, including the National Retail Federation, the Food Marketing Institute and the National Association of Convenience Stores, have filed a lawsuit charging that the Federal Reserve failed to comply with a new law requiring it to reduce fees bank charge retailers when shoppers use credit cards.

The law, which went into effect Oct. 1, said that banks could charge a maximum of 21 cents when consumers use a debit card, down from an average of 44 cents per transaction.

The retail groups argue that the Reserve Board’s rules "have allowed big banks to continue charging unjustifiably high swipe fees" and are discouraging price competition among credit card networks, contrary to the requirements of the law.

The lawsuit alleges that the Fed — under pressure from the banks and card industry — included costs in that calculation that were barred by the law.

"Doing so has deprived merchants and their customers of the full extent of the swipe fee relief to which they were entitled," NRF said in a statement.

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All signs point to growth for convenient care industry

BY Antoinette Alexander

WHAT IT MEANS AND WHY IT’S IMPORTANT — In recent months there have been a string of key milestones within the convenient care industry, and now the new Rand Corp. study indicates that clinic usage climbed tenfold between 2007 and 2009 — impressive growth and a clear message that retail-based health clinics are a significant player within the U.S. healthcare system.

(THE NEWS: Study: Retail clinic usage rose tenfold from 2007 to 2009. For the full story, click here.)

As the article states, the study examined 2007 to 2009 claims and enrollment data provided by Aetna for its 13.3 million enrollees in 22 markets in which there are retail clinics. Of that number, 3.8 million enrollees made at least one clinic visit between 2007 and 2009. The utilization rate during the study period rose from a monthly rate of 0.6 visits per 1,000 enrollees in January 2007, to 6.5 visits per 1,000 enrollees in December 2009.

Among the key predictors of clinic usage: convenience, age and income. Those enrollees who live close to a retail clinic, are between 18 and 44 years old, and have a higher income are more likely to use a retail clinic.

It also is important to note that the American Journal of Managed Care, which published the study, stated that if the trends within the convenient care industry continue, then health plans can expect to see a dramatic increase in clinic usage.

In fact, just within the past week or so, CVS Caremark’s MinuteClinic has announced that it now is a provider with Blue Cross Blue Shield of Arizona. Furthermore, during the third quarter, MinuteClinic entered its 11th clinical affiliation and, on Nov. 21, announced an affiliation with Emory Healthcare in the Atlanta metro area. Oh, and don’t forget that MinuteClinic has surpassed its 10 millionth patient visit since its inception.

All of these factors, in addition to other developments within the industry, undoubtedly point to growth for the convenient care industry.

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Well-prepared is half sold: How to get your product noticed

BY Dave Van Howe

Getting a product noticed by a retail buyer or a paying customer in today’s environment is difficult to say the least. Unless you are a Fortune 100 company or you are lucky enough to have a mega-media budget, just getting an appointment with a retail buyer can be difficult. Today’s buyers are so time-starved they have to be very selective in who and when they see new suppliers and products. Some of the best tools for getting in front of a buyer have been trade shows like ECRM, National Association of Chain Drug Stores Marketplace, Global Market Development Center conferences and others. In those venues, you have a few precious moments to make a quick, positive impression. Outside of these shows, direct buyer contact can be more difficult and frustrating.  A recent SymphonyIRI insight study showed that less than 18% of the new products launched in 2010 failed to achieve sales of greater than $7.5 million. This illustrates how hard it is to break through to buyers who are charged with managing inventory turns, as well as sales and profit. Therefore, you will need a strategy to break through.

It is important to understand that relationships matter.  You may want to interview and hire a sales/marketing organization that has had success in bringing new products in your category to market.  Either way, you need to make sure you are prepared to make a lasting impression at that first meeting.  In preparing for your first encounter, there are three critical things you should have ready:

  1. Shopper insights.  Do your homework: understand what makes your product different from what is already available in the marketplace. Why is it appealing to shoppers?  How can it create incremental sales to the retailer?  Today’s retail buyers are looking for true category growth, not just shifting share among brands.
  2. Know the retailers.   You will need to understand how each retailer goes to market.  There are some pretty dramatic differences. Seek to gain an understanding of their merchandising tactics.  How do they approach retail pricing in the category?  How do they speak to their consumers?  What are their consumer dynamics?  Do they match your target consumer?  How can you illustrate that your product will be incremental to the category?  You may even want to go as far as creating a forecast based on syndicated data and your knowledge of the consumer.  Forecasts can be tricky, so be careful you don’t over promise and under deliver.
  3. Create the "wow" factor.  The "wow" factor must be a point of difference.  This can be accomplished in many ways without blowing the budget.  In today’s world of Internet messaging, social media and online shopping, there are a number of ways to reach consumers without blowing the budget.  You also should make sure you are prepared to participate in the retailer’s programs, such as weekly circulars, off-shelf merchandising and loyalty programs.

These three basic factors may seem automatic, but throughout my years of retailing, I was always amazed at how many new suppliers were less prepared than I thought they should have been.

Retailers expect and respect suppliers that are knowledgeable about them and the consumer, and who are well prepared to bring their product to market.


As VP and general manager of MPG Drug, a new division of Crossmark, Dave Van Howe and his teams are focused on supporting CVS, Walgreens and Duane Reade. MPG Drug/Crossmark provides industry leading headquarter sales and in-store retail merchandising services for the drug channel. Van Howe leverages his past experience from more than 30 years in retail to help retailers and manufacturers alike develop winning go-to-market strategies. Before arriving at MPG Drug, Van Howe was the corporate VP of purchasing and new business development at Walgreens. He was responsible for all merchandising, promotional planning and category management across every front end category. His resume includes years with Walgreens, CVS, Arbor Drugs and Kmart.

MORE ARTICLES FROM DAVE VAN HOWE >

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