Channel-crossing can be brow-raising in food, drug and mass retail

Channel cross-shopping is alive and well.

New research reveals that drug stores aren’t consumers’ go-to destination for over-the-counter medicines and health and beauty care (HBC), and shoppers head to drug stores for groceries and other items about as much as for prescription drugs.

Of 1,102 U.S. drug store shoppers polled by CPG/retail sales and marketing firm Advantage Solutions, 58% cited mass merchants as the venue where they typically buy OTC medications and health products, compared with 49% for drug stores, 24% for supermarkets and 15% apiece for warehouse clubs and dollar stores.

The drug retail channel, though, holds a commanding edge for prescriptions, with 64% of those consumers naming drug stores as their top destination for prescribed medications versus 32% for mass merchants, 17% for supermarkets, 11% for club stores and 8% for online pharmacy providers.

Source: Advantage Solutions “Beyond the Pharmacy” Pulse Survey report

“Despite their popularity for prescription filling, drug stores aren’t shoppers’ first choice for over-the-counter medications or other health care and personal care items,” Advantage Solutions said in its latest “Beyond the Pharmacy” Pulse Survey report. “Nearly six in 10 U.S. adults (58%) who shop at least once a year at drug stores are regularly choosing a mass merchandiser for these items. About half say they regularly buy these products at drug stores, and one-fourth say they typically buy these items at supermarkets. Still, with budgets in mind, 15% regularly shop at dollar stores and/or club stores for their OTC medications and other health-related products.”

Mass merchants also dominate as the primary store for other key-category products, according to Advantage Solutions. Drug store shoppers pointed to mass retailers as their main destination for household items (67%), general merchandise (64%) and beauty care products (58%). Supermarkets came in second among drug store shoppers as the place where they normally buy household items (33%) and general merchandise (28%), while drug stores were No. 2 for beauty products (29%).

“For products in the general merchandise and household item categories, fewer shoppers are regularly going to drug stores than they are mass merchandisers, supermarkets, club stores and/or dollar stores,” Advantage Solutions noted in the study.

Source: Advantage Solutions “Beyond the Pharmacy” Pulse Survey report

Lingering inflation, despite declining to about 5% nationally compared with a year ago, also has made mass merchants top-of-mind for many consumers, the report said. Looking ahead to the next six months versus the previous six months, 39% of drug store customers polled said they expect to shop mass merchants more frequently, followed by supermarkets and club stores at 20% each, chain drug stores at 18%, value grocers and dollar stores at 17% apiece, and specialty grocers at 13%

Specialty grocery stores led as the retail destination these consumers plan to shop less frequently over the next six months, cited by 20% of respondents. Nineteen percent aim to shop dollar stores and chain drug stores less, while 18% expect to do so for supermarkets. That compares with 17% citing wholesale clubs and 16% naming value-focused supermarkets as venues they likely will shop less often.

“Nearly 40% of U.S. shoppers said they expected to make more trips to deal-offering mass merchandisers like Walmart, Target and others in the next six months,” Advantage Solutions explained. “If shoppers’ behavior mirrors their intention, other channels—including drug stores—won’t experience significant net gains in trips. Specialty grocery stores as a segment may experience a bit less traffic.”

Source: Advantage Solutions “Beyond the Pharmacy” Pulse Survey report

More channel crossing

Findings from Kroger’s 84.51° data analytics arm also reflect significant cross-shopping in the HBC arena. In the 84.51° March Consumer Digest, shoppers cited supermarkets as their primary in-store purchasing destination for personal care (61%), OTC health care (60%) and beauty care (46%).

That compared with 52% in personal care and 48% in beauty and OTC health for in-store transactions at mass merchants, and 44% for OTC health, 29% for beauty and 28% for personal care at drug stores.

Less than 30% of respondents said they typically buy HBC products online from a mass retailer, while 15% or less regularly make such purchases online from a supermarket.

“When choosing where to shop for health, beauty and personal care items, shoppers typically browse in-person at grocery, mass or drug stores, and top factors driving retailer choice include price and product standards,” 84.51° stated in its March Consumer Digest.

Indeed, 72% of consumers named price as the chief factor in determining where to buy HBC products, followed by 62% citing “product meets my standards.” Other factors included convenience (62%), retailer location (51%), sales and promotions (50%), and brand availability (45%).

Source: 84.51° March 2023 Consumer Digest

Sizing up drug store shoppers

Brick-and-mortar stores generate the majority of sales in the drug store channel, retail/brand sales and marketing specialist Acosta Group said in its “Drug Store Channel Shopper Insights Study,” released on Thursday. The report noted that one in three shoppers live less than a mile away from a drug store, and most belong to retailer loyalty programs.

Of 1,134 primary household shoppers surveyed, the top in-person purchases at drug stores cited were prescriptions (71%), health products in the pharmacy area (70%) and front-end products (69%), including groceries, personal and beauty care, candy and snacks, and household items like paper goods.

“We heard repeatedly from drug store shoppers that convenient location, discounted pricing and one-stop shopping are appealing drivers in choosing drug stores over other retail options,” Kathy Risch, senior vice president of consumer Insights and trends at Acosta, said in a statement.

Interestingly, when it comes to online drug store purchases, groceries and other household items were the top category, cited by 61% of those polled in the Acosta study. Next were prescriptions for pickup or delivery (55%) and other items from the pharmacy area (49%). About 60% of drug store shoppers said they have made online purchases from a drug retail site, led by Millennials and Gen Z consumers.

“We are focusing on the importance of the omnichannel experience to grow opportunities within small format retail,” according to Shannon Hodock, senior vice presidnet of client development at Acosta. “Critical to success in drug stores is bridging the gap between the physical and digital shelf to meet the way consumers want to shop this channel.”