RetailNet Group CEO addresses retail survival in 2010 at NACDS Marketplace
BOSTON Not only is the economy on the skids and bringing retail sales down with it, but there is a generation rotation taking place in the modern trade, all of which means that retailers must stay ahead of the curve and adapt to change in order to survive. That was a key message RetailNet Group CEO Dan O’Connor had for attendees of Tuesday’s morning business session.
During his presentation, titled “Survival Retailing 2010,” O’Connor set the stage by explaining how, historically, retail sales have grown about 5%, but in today’s current economy, that growth is nonexistent as people are spending less and their purchasing power shrinks. To top it off, shelf prices are falling as retailers shift more of their focus to private label, and cash-strapped consumers increasingly migrate away from premium stores to discounters.
O’Connor also told attendees that, looking ahead, the Web likely will lead to in-store category reduction and that the future of retailing will be more about services versus merchandise. A perfect example: retail-based health clinics. “The clinics are perhaps the most important thing [being done] in this industry in a long, long time in terms of the impact it will have on the underinsured and the availability of health care,” O’Connor said.
Meanwhile, there’s a generation shift taking place at retail, which O’Connor likened to beer drinking. Think about it, O’Connor said: When people are young, they are much more experimental and will try anything (to get their hands on that beer), but as people grow older, their eagerness to try new things narrows. This next generation, which relies heavily on word-of-mouth and lives on the Web, is arriving.
O’Connor suggested that, in order to thrive, retailers must “win search.” Today’s shoppers are precise in their buying habits and expect to find retailers on the Web, a listing of products and the price. This is especially important given the ease of using online price-comparison tools.
The fundamental question is: How long will this economic environment last?
“There is no indicator that tells us we will be out of the woods in the next 12 months,” said O’Connor, who thinks it will be more like at least 18 months. “… We suggest it will be a 36- to 48-month cycle from beginning to end when we will see back-to-back quarters [of rising retail sales].”
NACDS Marketplace Conference kicks off with Meet the Market format
BOSTON It was a cool and crisp day as attendees filed into the Boston Convention & Exhibition Center Sunday to take part in the National Association of Chain Drug Stores Marketplace Conference annualized Meet the Market format, which this year represented more than 8,000 face-to-face pre-arranged appointments, including 270 retailers representing some 80 companies.
The Meet the Market format, where smaller and new suppliers are able to secure 10-minute meetings with their category buyers, takes on greater value in a recession economy, where many retailers are cutting more SKUs from their planograms than they’re slicing in, noted Larry Lotridge, NACDS VP conference services. “We know when the economy’s tight you still want to get in front of the retailers,” he said, “because our industry is still selling.”
Lotridge noted one supplier last year negotiated a 100-store test run in Walmart after an initial meeting at Meet the Market. This year, Lotridge said, that supplier is likely to secure full distribution with the mass marketer. “You want to be the company with the product on the shelf,” he said.
And such formats as Meet the Market are opportune to help new or small companies accomplish just that.
NACDS, NCPA endorse Rep. Mike Ross’ MTM legislation
ALEXANDRIA, Va. Two pharmacist organizations announced their support for H.R. 3108, the Medication Therapy Management Benefits Act of 2009, sponsored by Rep. Mike Ross, D-Ark.
The bill was introduced on June 26, and immediately was referred to the Committee on Energy and Commerce and Committee on Ways and Means, two House committees with jurisdiction over comprehensive healthcare reform legislation.
Pharmacist-provided medication therapy management involves a licensed pharmacist’s work with a patient to review, monitor and identify problems with a patient’s medication plan.
“We appreciate the hard work and dedication of Rep. Ross as he continues to advocate for pro-patient and pro-pharmacy healthcare reform legislation in Congress,” stated National Association of Chain Drug Stores president and CEO Steve Anderson. “Rep. Ross’ bill signifies the importance of pharmacist-provided medication therapy management for improving medication adherence, enhancing patient health and reducing long-term healthcare costs.”
National Community Pharmacists Association EVP and CEO Bruce Roberts also supported the bill, stating that MTM improves patients’ adherence and their outcomes through the utilization of pharmacists’ expertise. “H.R. 3108 will expand the pool of Medicare Part D patients that can access this valuable service and recognize pharmacists for the savings they provide to the healthcare system,” Roberts said. “We thank Congressman Mike Ross for introducing this bill, and urge other members of the House to support it. We call on the Senate to introduce similar legislation. Ultimately, for healthcare reform to be fully successful, it must include proposals such as this to improve quality while lowering overall costs.”