By David Shukri, Client Service Director, Australia
What should you be taking to your next pharmacy retail meeting?
Many years ago, I was a buyer for one of the big UK supermarkets.
My suppliers would come and see me to tell me all about their brands, their wonderful NPD, and all the reasons why consumers loved their products.
My question to them would always be the same…
“What about the shopper who shops in my stores?”
And this was typically when things got a little tricky for them. Because, often, they didn’t know the answer to that.
They came looking for more shelf space for new listings but overlooked something important.
The element of collaboration.
This would have made them more influential because it would have meant we were committed to a shared purpose and a common goal.
Put simply, we’d have collaborated around trying to do a better job for the shopper.
This principal is no different in pharmacy retail.
If that’s something you and your team can see the value of today, here are three things you should be taking into your next meeting with your pharmacy retailer.
1 – What needs work
The foundation we tend to find with most collaborations between suppliers and retailers is establishing a common starting point.
In other words, how are things today and what should we focus on together for improvement?
In terms of shopper satisfaction, pharmacy retailers do pretty well.
Their overall satisfaction score (a measure of the average of satisfaction ratings across all measures surveyed, weighted by their importance) is 60%
For comparison, the equivalent score for Coles and Woolworths across all categories is 53%.
Sticking with that comparison for a moment, pharmacy shoppers are particularly happy with delivery on price measures – including offers, delivery of fixed low pricing and products prices themselves.
Breaking that down further, Chemist Warehouse top performs at 66% overall satisfaction, Priceline at 62%, and traditional pharmacies bring up the rear down at 49%.
That’s a good starting point but clearly you’ll need to go deeper to really get things moving.
You need to specify not just the things that under-index on performance vs. other retailers, but also what over-indexes on importance.
For example, shoppers of allergy products don’t feel the category delivers that well in terms minimal impact on the environmental, but equally, they’re not really expecting it to.
What they are expecting is more compelling offers and better delivery from premium allergy products.
2 – What drives growth
Once you know where you’re starting from, next you need to align to a common purpose, or growth objective.
In essence, you can target growth by increasing traffic to the retailer or increasing the amount shoppers spend once they’re there (or a combination of both).
The most appropriate combination of these levers is going to vary from retailer to retailer.
Your overarching brand ambition may be to drive basket spend with more premium products, but if, when they shop in retailer X, they tell you they’re less inclined to pay more in your category, that simply isn’t going to be an effective strategy that the retailer can get behind.
Comparing pain relief products in different retailers underscores this point.
For Priceline shoppers, the overriding desire in this category is not to run out. As a supplier to Priceline, the has to be the primary objective around which you galvanize your efforts with the retailer.
Spotlight great execution and great availability. Work on those aspects together.
Where traditional pharmacy retail is concerned, however, another opportunity appears.
Keeping in stock is still important, but for this group of shoppers, there is a material opportunity to drive spend by encouraging them to buy something that’s better quality.
So you have a very different strategic approach that must include ranging and visibility of premium products alongside comms to explain their benefits.
3 – What triggers the purchase
So, if you’ve aligned on the basic category challenges and the strategy to drive growth, one more element needs to fall in to place for effective collaboration to flourish.
You’ve got to get razor sharp about how, when and where to capture the shopper on their path to purchase.
What does that mean?
Some categories in some retailers are more planned than others. The shopper in that case is more likely to have made their purchasing decision at category-level before they set foot in the store.
There’s little value to you or the retailer then in debated end space, displays, point of sale material and so on.
Take toothpaste as an example.
In Chemist Warehouse, more than two-thirds of toothpaste shoppers planned to buy the category before the got to store and they say the catalogue, both paper and digital, is a key influencer of that decision.
By contrast, nearly half of Priceline shoppers didn’t plan to buy toothpaste until the were in-store, so there ought to be far greater emphasis on displays and promotions at shelf in this situation.
I hear about a lot of opportunities missed because suppliers and retailers aren’t on the same page around shopper marketing and in-store activity.
It pays to get the facts, be prepared to move with those facts and keep your common objectives front of mind.
Collaboration is a wonderful thing to behold, but it needs some process, some trust and above all, some solid inputs to make it happen.
When it does, you’re sure to feel the benefit!
Follow David Shukri on LinkedIn for regular Australian shopper insights.
This article was originally published in Retail World Magazine and reposted here with permission.