CHICAGO — The numbers in pharmacy are huge and so are the opportunities for supermarkets, said Thom Blischok, president of IRI Global Retail and Strategic Consulting, Information Resources Inc. here.
While spending on health care will nearly double from $2.2 trillion in 2006 to $4.1 trillion in 2016, the number of prescriptions will grow from 1.6 billion in 2006 to more than 2 billion in 2010, and pharmacy is the fastest-growing category in the supermarket at 8% last year, challenges remain, he said.
Blischok spoke at a session jointly held by the FMI Show and the co-located FMI Pharmacy Conference here this month.
“The pharmacy shopper spends twice as much in the store as the non-pharmacy shopper does, and the pharmacy customer shops close to 25% more times per year than the non-pharmacy shopper,” Blischok said. However, 44% of pharmacy consumers leave the store without picking up anything besides their prescription, and supermarkets are not getting as much of the estimated $1,200 in average annual savings that Medicare Part D patients are receiving at drug stores and supercenters, he noted.
“To capitalize on this opportunity, we think most retailers are struggling with how to develop the health and wellness platform,” he said.
Among Blischok's suggestions for taking advantage of this business: stronger tie-ins with Center Store categories; more creative merchandising of health and wellness-related items; adding in-store clinics; and making the pharmacist more accessible to customers.
“Clearly the pharmacy and the emerging in-store health clinics are touch points that lead shoppers to the store,” he added. In particular, the pharmacist is the best-recognized health provider in many stores.
Blischok spoke of the remerchandising of pharmacy as “shape-shifting,” and suggested that retailers identify three to five disease states, such as high cholesterol, high blood pressure and diabetes, and focus their marketing and merchandising on them. “Any retailer that chooses to keep their health and wellness categories and displays the same as they are today will lose,” he said.
A retailer panel addressed remerchandising products while tying pharmacy in with the rest of the store.
Since putting the first pharmacy in K-VA-T Food Stores, Abingdon, Va., 10 years ago, the company now has 67, noted Richard Gunn, vice president of merchandising. In that time, “we have completely remerchandised the entire store and remerchandised HBC so all the internals are around the pharmacy, while the externals are somewhere else,” he said.
To achieve success integrating pharmacy with the whole store, “you have to break down all the walls [between departments], break down all the barriers so that you keep the customer in your store making those purchases and helping your store be successful,” said Donald Clark, K-VA-T's vice president of pharmacy operations.
“You've got to build the model around the total store,” Gunn added. “Make sure you include all departments. Get the expertise of the produce director, the meat director, bakery-deli, grocery, and try to package that up as a total store initiative.”
Blischok pointed out that the synergy between pharmacy and the whole store and pharmacy has been spoken of for years, but now is coming to the forefront.
“For the first time, we have seen the pharmacy side of the business become more embraced by the rest of the store, and the value of those pharmacy customers has never been greater,” said Curtis Hartin, senior director, pharmacy, Bi-Lo, Greenville, S.C.
“Health and wellness is almost a mind-set. It's not any one particular focus. It's becoming a way of life,” he said.
“I don't know of anybody who doesn't want to be healthy, although I know a lot of people who have absolutely no idea how to be healthy,” Clark noted.
“The way you capture that health-conscious customer is to provide solutions for them on how they can be healthy. The store that does that best is going to win in this, and people are going to seek them out and continue to shop there,” Clark said.
“If you are going to become successful in this business, [health and wellness] really has to become part of your brand,” Hartin said. “It's more than a program. It's more than a flash in the pan. It has to be something that everyone in the store lives and breathes.”