For a large number of retailers, 2020 was the nail in their brick-and-mortar coffins. The growth of e-commerce and other factors had been eroding sales from some stores for several years, but last year’s rapid transition to online shopping — or not shopping at all for some products — forced many to close their doors for good.
In the drug channel, traffic and sales eroded to some degree after an initial surge last spring, and it remains to be seen how much of that lost volume will return.
Many consumers who defected from the physical drug store channel during the past year apparently consolidated their shopping trips in other channels, including traditional supermarkets, or shopped online instead. Even those customers who remained loyal to their local pharmacies often opted for the quicker, safer, click-and-collect and curbside pickup options, which minimized their potential for in-store impulse buying.
Some front-of-store categories, such as beauty care, saw significant sales declines, as homebound consumers spent less on such items. And widespread mask wearing and social distancing, intended to slow the spread of the coronavirus, had the side effect of also keeping the flu at bay during the past year, which sharply curbed sales of the OTC products that consumers traditionally buy throughout the fall and winter.
Creating an In-store Experience
Gabe Trahan, senior director of store operations and marketing at the National Community Pharmacists Association, said retailers need to understand the mindset of their customers in order to drive traffic to their stores. “First and foremost, prioritize having a sparkling clean store, both inside and out,” he said, suggesting that retailers create a video of staff cleaning the store entrance and posting it on social media.
“Along with cleanliness, the want for personal space is not going away soon,” Trahan said. “Police all your aisles so there is a clear path of 4 ft. to 5 ft. This means you may have to remove floor displays.”
The area between the pharmacy bench and the first over-the-counter fixture needs to be at least 6 ft. apart, he said, and if the pharmacy is busy — more than 200 prescriptions per day — even more space may be required.
“This means you may have to remove a section of a fixture or replace an endcap with a banner that promotes your services,” Trahan said.
Asked how retailers can drive bigger baskets during in-store visits, Trahan said, “Well, have plenty of clean baskets available.”
“Customers stop shopping when their hands are full,” he said.
Other advice Trahan offered included:
- Prepare to cross-merchandise immune boosters, impulse items and high-end merchandise with signage; and
- Understand the value of the most-viewed areas of the store — the first endcap customers see to their right when entering a store, all endcaps facing the prescription department and the shelving in front of the prescription bench.
Dara St. Louis, senior vice president and founding partner of Toronto-based Reach3 Insights, which conducts consumer research on behalf of brands, said that shoppers still are concerned about their health and safety when they visit physical stores. “One of the biggest things that drug stores can do is just show that they’re prioritizing the health and safety of their customers and their employees,” she said.
Her company’s research shows that shoppers still want to keep their shopping trips as brief as possible out of concern for their health, St. Louis said. “Less often are people going in just to browse around,” she said. “They want to get in and out quickly, but they still want to have that connection to the pharmacist, and to feel like they are shopping in a safe store.”
Connecting Online and in Store
Kantar’s Antenore said he expects drug retailers to leverage their loyalty programs to help drive sales both in store and online. “We know that with the length and duration of COVID that new consumer habits were formed,” he said. “So not only will it be about reminding drug shoppers of why they shop the channel and why they enjoy it, but it’s also about addressing those new habits and really responding to them.”
Many consumers have switched to mail-order prescription fulfillment from the major drug store chains during the past year, for example. “It’s going to be tricky to get those people to shift back, but that’s going to be an incredibly important challenge and consideration for major drug retailers,” Antenore said. “They need the kind of traffic that comes from the Rx trip.”
One option could be offering a personalized discount linked to in-store prescription fulfillment, he said.