With the retail environment evolving faster than ever, it’s crucial to constantly innovate and find new ways to improve upon the customer experience, says CVS Health. That message was delivered by Kevin Hourican, executive vice president for CVS Health and president of CVS Pharmacy, at Shop.org, the National Retail Federation’s annual conference, which took place in September of 2018. A key lesson Hourican drove home was the importance of creating a compelling place to shop. “If your store’s not vibrant, if there’s not a reason to come, they do not come.”
The three key elements he believes are critical to success in today’s retail environment:
Leading with Purpose: “You can choose to do lots of things in your life,” Hourican said during his presentation, “I recommend doing something that matters.” CVS Pharmacy has used its purpose to guide the decisions that have become some of the most important moments in the company’s history.
Customer-Focused Innovation: Prioritizing innovation that is customer-facing is critical. Put customers at the heart of what you do and work to find solutions that address consumer concerns. Make your store a compelling place to shop.
Wherever, Whenever, However: Hourican explained that the definition of convenience is changing, which means customer options need to as well. Think 24-hour store locations, drive-thru pharmacies, and store-specific apps.
There is a need for innovation, but Hourican also stressed the need to stay true to your company’s core values. “You can’t try to be too many things to too many people. Do what you do well, and do it relentlessly.”
The bottom line? Retail is not dead. Bad retail is dead. For CVS? It’s all about creating a relevant and accommodating shopping environment.
Another place that continually learns from these lessons and improves their shopping environment? Grocery stores and supermarkets.
Don’t Forget the Bacon…and your prescription at the grocery store
Today, the world of food retail is diverse. The Food Marketing Institute (FMI.org) reports “from the independent operator to the supermarket chain, from the pharmacy to the warehouse club store, our research suggests consumers are shopping multiple channels.” According to FMI’s U.S. Grocery Shopper Trends report in 2016, on average, shoppers are using around three different shopping channels fairly often. Supermarkets were listed as the primary store for 49% of the respondents.
Given the store traffic as a whole, fewer people enter the specific drug and OTC aisles, but the daily traffic of your average Safeway or Jewel Osco is BIG. So it’s crucial to not ignore grocery chain pharmacy stores when considering your next omni-channel marketing move.
Think about it: shoppers are constantly making purchases in a variety of channels. When was the last time that you ran to the store to purchase cold or allergy medicine? If that wasn’t the only purchase you needed to make that day, would you choose your local retail pharmacy or a supermarket/grocery store/mass merchant “big-box store” to make that purchase? Consumers shop in a variety of different retail outlets based on individual needs, and product accessibility and convenience are significant factors in purchasing decision.
And it’s not just your stereotypical mother of two shopping. FMI.org shares the most popular grocery shoppers:
These consumers are shopping the aisles of supermarkets every day. According to FMI, total supermarket sales reached $682,716 billion in 2017 with the median weekly sales total hitting $496,186. Average per-transaction totals? $34.61.
Drug Store News reports that there is no doubt that the food channel is a force to be reckoned with in the pharmacy business. “Most new, and many remodeled, grocery stores outside of truly urban markets feature a pharmacy counter, and many grocery retailers have made it clear that they see an opportunity to grab market share from traditional drug stores in this segment.”
“There is no doubt that many grocery stores see the pharmacy as a magnet to draw consumers into their stores, and to offer a valuable service that also makes money for the retailer,” said a senior merchandiser at a Northeast-based supermarket chain. NACDS found that the number of supermarkets with pharmacies increased by nearly 300 between 2014 to 2016 according to Drug Store News; supermarkets accounted for 13.6% of retail pharmacy prescriptions in 2016 — a 6.5% increase over 2015.
The bottom line? Supermarkets are doing a lot of business in drug…and their consumers are satisfied.
The Proof in the Customer-Satisfaction Pudding
Food retailers are increasingly being identified as health care destinations, and as such, are focused on creating a “whole health environment” where health and nutrition programs are offered in store (in addition to the increasing number of prescriptions that are filled each year).
Grocery stores are expanding patient care services too — pharmacists and dieticians are taking the lead and offering heart-healthy coaching, nutrition counseling for diabetes management, and smoking cessation programs that are driving additional traffic to the supermarket.
“The pharmacist is one of the most important frontline healthcare professionals available to most consumers. Sue Borra, chief health and wellness officer at the Food Marketing Institute is quoted in Drug Store News. “A supermarket that effectively utilizes a pharmacist and a dietitian can be a genuine health-and-wellness destination,” she says.
Supermarkets are leading the field among brick-and-mortar retailers when it comes to pharmacy customer satisfaction too, according to Supermarket News. They site a J.D. Power 2018 U.S. Pharmacy Study which polled 10,749 customers who filled or refilled a prescription in the previous three months and gauged pharmacy customer satisfaction with chain drug, supermarket, mass merchant, and mail-order pharmacies using a 1,000-point scale. They reported similar findings to their 2017 study: “the supermarket segment this year posted the highest overall pharmacy satisfaction rating with an average score of 863, compared with 846 for chain drugstores, 845 for mass merchants and 859 for mail order. Supermarket pharmacies also accounted for seven of the top 10 brick-and-mortar players.” J.D. Power’s research also showed that retail health clinics boost a key metric of pharmacy customer satisfaction: the availability of health and wellness services, which is associated with a 66-point improvement in overall satisfaction.
Why wouldn’t you want your brand messages to be seen there?
Need to add Grocery and Supermarket Shoppers to Your List?
Rx EDGE’s network includes a significant number of supermarket retailers and adding these types of outlets to your store list allows you to gain more brand exposure in your target markets. Why not reach your audience in supermarkets as well as in the major chain drug stores and traditional drug stores? Leverage the full value of the retail channel as a part of your media mix. Reach out to Michael Byrnes at 610.431.7606 to get started today.
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