Editor’s Note: Jumping the shark
We can throw a pity party for Bed, Bath & Beyond, the suddenly-beleaguered home furnishings retailer that has become the latest poster child for declining traditional retail sales and prestige. Maybe a better idea would be to just learn from the giant merchant’s mistakes and try not to imitate them.
The chain has been one of the great retail success stories of the last 30 years. Using a brazen strategy that combined a perceived notion of value based around its ubiquitous 20%-off coupons and a store chock full of products, BB&B came to dominate its retail arena like few other chains.
Competitors fell by the wayside, either because they did not have the right merchandise or the right value perception. BB&B seemed to have clear sailing ahead for years, maybe even decades.
Well, that happy story lasted until just a few years ago when more and more consumers figured out that Amazon could offer better pricing and an even better assortment of merchandise than BB&B online, and some traditional retailers offered competitive pricing in their stores. Since then, and despite a still-healthy financial ledger, BB&B’s stock price has fallen by nearly 80%.
Even worse, industry gurus and, of course, Wall Street talking heads are calling for BB&B officials to start closing stores by the dozens and pay a lot closer attention to its online digital strategies instead of focusing primarily on its brick-and-mortar stores.
There is only one problem here. BB&B has put a great deal of effort into its digital operation, even buying a couple of online shopping sites to help kick-start its online efforts. The issue is that these purchases did not work very well, and its own marketing efforts to boost its website have faltered behind some more aggressive competitors.
One lesson here is that traditional retailers must place a greater effort on their digital marketing strategy. Developing a well-maintained site is one thing; making it shoppable is a different issue, but one that may be much more important.
The second is to never lose focus on your core customer. From this angle, at least, BB&B officials started to drift from the chain’s original business philosophy over the years. It went from being a home furnishings and housewares store carrying almost anything that might sell. Shelves and displays became too crowded and jumbled.
That confusion — some may say sloppiness — always leads to the worst diagnosis of all for any retailer: Consumer indifference. And, even 20%-off coupons cannot make up for that.
Gen Z will put retail disruption on steroids
The good news is that retailers have finally made progress in figuring out millennials. However, just as retailers are cracking the code, a new generation is emerging that will ensure a steady supply of disruption.
The first Gen Z consumers were born around the mid-1990s, and many of the oldest members are about to advance from college to the workforce (or just did, depending on how you define this group). These consumers are highly diverse and multicultural, and I’ve been tracking their story great interest, partly because I’ve got a Gen Z daughter at home that I’m still trying to understand. But more importantly, it’s becoming clear to me that retailers — whether food, drug or mass – need to prepare for what’s about to hit them.
Dollar spending figures are putting Gen Z on the retail map. These young consumers already influence up to $600 billion in spending, according to a recent presentation by Lynne Gillis, principal, IRI.
Millennials were trailblazers for introducing a range of new shopping behaviors. With Gen Z, so many of these behaviors will be on steroids. Gen Z speeds everything up. Using a Z word, let’s call them the Zoom Generation (not to be confused with Nike Air Zoom Generation!). If their parents used one or two screens at a time, members of Gen Z use three or four. They are always moving faster.
For example, millennials like to experiment, but for Gen Z it’s just a way of life, as IRI research on Gen Z points out. Variety is mandatory, whether it’s in food, beauty, tech devices, or anything else. That’s not great news for retailers trying to rationalize store SKUs, unless of course, they leverage endless aisles to extend shelves.
Speaking of virtual shelves, millennials helped to usher in the omnichannel era, but with Gen Z, it will likely be seamless. Omnichannel is assumed by this generation, and they “expect a level of fluidity that’s unparalleled,” asserted Gillis.
Not only that, I doubt omnichannel is still the right term for this group. These younger consumers don’t recognize channels. They just want everything to work together for total convenience. You better not inconvenience them.
Convenience will also be crucial in payments. There are already some forecasts that the decline of cash will speed up to suit this generation, which will probably just want to pay with mobile devices.
Meanwhile, a number of observers have pointed out that authenticity and transparency will be crucial to Gen Z. My first reaction is, haven’t we been through this before? How much more important can it be to Gen Z than to millennials? However, it seems Gen Z will raise this to a higher level. Remember the wrath that fell upon companies accused of “greenwashing” by making unsubstantiated environmental claims? Gen Z, which was born into the social media era, is ready to tar and feather organizations across social media for these kinds of violations.
It’s with technology that these younger consumers are truly ready to accelerate, noted a recent NPD report. They will be willing retail customers for augmented reality, artificial intelligence, and lots of other technologies. They will embrace personalized offers. They may not care that you have reams of data about their lives.
One thing members of Gen Z won’t be doing is reading this column. Most are too young to be focusing on business media. They probably don’t care how their retail experiences impact the industry.
However, retailers are reading, and hopefully starting to think about these challenges. They need to address the demands of Gen Z, including greater variety, a more seamless shopping experience across platforms, convenient payments, enhanced authenticity and transparency, and deeper technology experiences.
Solutions will vary by retailer and market. However, it will be crucial to gear up for this generation, because these consumers are about to zoom across the retail landscape.
As adherence incentives expand, pharmacies weigh point-of-care options
Medication nonadherence is a major problem that results in significant consequences to our healthcare system. Between $100 and $300 billion of avoidable healthcare costs have been attributed to non-adherence annually. This represents 3-to-10% of total U.S. healthcare cost in the forms of increased service utilization, preventable hospitalization, and development of comorbidities.
Payers and PBMs have grasped this drain to the system, responding with incentives for medication adherence. Just last month [April 2018], Express Scripts announced a pilot program that rewards retail pharmacies that fill prescriptions and demonstrate an improvement in members’ medication adherence for such conditions as diabetes, high blood pressure and asthma.
These performance-based pharmacy incentives for better outcomes — which often include withholding payments, too — surely have your attention by now. Hopefully you are also paying close attention to the data that supports the use of medication adherence risk scores to segment member cohorts expected to have costly outcomes resulting from non-adherence.
Success of using SDOH
Studies show that social determinants of health (SDOH) — the conditions in which we are born, live, work and age, according to the World Health Organization — account for as much as 50% of health outcomes. This information provides insights into the social, economic, and environmental factors that influence health.
A Med Care study looked at how SDOH impact diabetes patients. Researchers found that cost-related nonadherence was prevalent in people with diabetes—half of adults with the disease perceived financial stress, and 20% reported financial insecurity with healthcare and food. Nonadherence in these chronically ill patients brings significant complications much faster than if the disease was naturally progressing in coordination with treatment recommendations.
If the pharmacist could know his patient’s financial stress, perhaps, when filling the medications, he could go back to the physician asking about lower-cost options or discuss strategies for adherence with the patient. Screening to identify challenges is imperative for better communication as the pharmacist’s role on the patient care team continues to grow. Consider that the pharmacist sees these chronically ill patients monthly and can leverage the benefits of both frequency and ease of access. Since patients can walk right up to the counter, they may be more willing and likely to communicate with their pharmacist than with any other provider.
In another case, LexisNexis matched data attributes to SDOH categories identifying correlations with healthcare outcomes. Through public records data on individuals’ court records—including felonies, misdemeanors, liens, judgments, bankruptcies, and evictions—higher numbers of crimes or financial issues were associated with lower medication adherence. Other SDOH data, such as proximity to relatives and education level, can also be used with advanced analytics to provide additional information that could impact future outcomes.
Scores at the point of care
The SDOH information can be used to determine medication adherence risk scores, in the format of a numbered scale or color-coded system such as “red, yellow, green” indicating severe, moderate or low risk. Risk scores trend in the same direction with several outcomes dependent on medication adherence. LexisNexis found those expected to be nonadherent to have a three-fold increase in ER visits. On the other hand, those predicted most adherent were twice more likely to follow up with office visits two weeks after an acute event. These follow-up visits also reduce the likelihood of readmissions, decreasing overall costs.
These types of predictions and the associated scoring will be available at the pharmacy counter soon enough. Realistically, physicians and insurance companies do not have the bandwidth to follow up with every patient individually to remind them about taking their medication and determine if there are additional challenges coming into play. By identifying patients who may be at risk for nonadherence, pharmacists can easily grant them some added attention and communication that reinforces the importance of their medication regimen. As the frontline point-of-contact, pharmacists can help patients understand their condition and how and why the medicine helps them.
Already, we’ve seen through medication therapy management programs that pharmacists are expected to fulfill this role: From adherence to synchronization to reconciliation of medications, it’s the pharmacist’s responsibility to make sure that medications are working to improve health.
With just the click of a mouse, the pharmacist has the medication adherence score, as well as key information about the patient’s socioeconomic environment that enables him to quickly and easily determine what may be driving challenging behaviors and putting that patient (and his health) at risk. At the point of care, the pharmacist has better understanding about the patient’s risk and, therefore, what level of engagement would be optimal.
This all can integrate right into the pharmacy workflow at the point of care. An example is the real-time prescriber verification solution VerifyRx that is used by the majority of retail pharmacies.
The future of healthcare demands an insightful understanding of patient challenges and the provision of accompanying solutions. For example, in March 2018, Allscripts and Lyft, a rideshare provider, partnered to provide non-emergency transportation for patients to get to medical appointments5.
What do our pharmacy patients need for support? If the adherence risk data indicates transportation is a challenge for a patient, could we seamlessly schedule a ride share for them in one month when their next prescription refill needs to be picked up?
Consider the potential of solving our patients’ biggest challenges with a synthesis of data, technology and the personal communication skills that got you into the business!
Dr. Anton Berisha is senior director of clinical analytics and innovation, health care, at LexisNexis.