DSN Industry Issues Summit: Eliminating retailer, supplier blind spots
Panelists on Dan Mack’s “Look Closer: Eliminating Retailer & Supplier Blind Spots” at Drug Store News’s 24th annual Industry Issues Summit discussed ways to improve relationships between retailers and suppliers.
The executives weighed in on innovation, how expectations have changed, enterprise relationships, the future of health and wellness, emerging growth ideas and how to manage difficult conversations.
Moderated by Dan Mack, managing partner of Mack Elevation, the panel included Mike Wolf, senior director/ divisional merchandise manager OTC at Walgreens; Maya Bowie, vice president of marketing at Walmart; Pat Mooney, vice president, health & beauty, general merchandise at Wakefern Food; Jennifer Cowell, vice president of DMM baby, HBA and OTC at Sam’s Club; and Mike Wier, senior director of consumer health and wellness at CVS.
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How can suppliers create a broader, more holistic partnership?
Emphasizing that Sam’s Club is member-obsessed, Cowell said, “It starts with truly understanding what item you are trying to get a merchant to buy. If you’re coming in knowing everything about our member, you are showing us you have skin in the game and want to work with us because we’re a limited SKU environment. If you can show us you really took the time to know who our members are, that is what starts to set a foundational relationship and we can move into joint business planning.”
Mooney pointed out that trust and communication are foundational to any relationship.
“From there, when you run into rigidity and issues, you focus on the consumer and that friction goes away,” Mooney said. “The pressure in the room comes out and you have this third party you focus on. Talk about the customer and the purpose of your organizations. Open your doors, give us access to your teams. Don’t bring us a one size fits all class of strategy. Let’s listen to each other and reduce some of the rigidity.”
On the subject of the future of health and wellness, Wolf emphasized that the labor market is tight. “There’s less folks to go around so having the right talent will be important in the future from a supply standpoint; the future will be planning around those things,” he said, noting that offering a seamless experience for customers also is critical.
Wier pointed out that there are big industry changes on the horizon as we talk about category evolution, notably the future of Rx to OTC switches. “Increasing access to non- prescription OTCs has helped our customers,” Wier said. “With that there are some complications. We need to ask ourselves, how are we thinking about the customer experience to enable that? As many products go OTC that involves a digital health assessment or video required by the FDA. How are we coming together to allow for this scale to happen from a technology perspective?”
Emphasizing that as a result of COVID there has been an adoption of self-testing, Wier said, “We’re excited about how diagnostics will pay a role on its own and how consumers will take momentum at home to test and treat and consult and create a broader health and wellness journey.”
Next, Bowie advised that we need to be more outcome-based and help patients manage conditions to become healthier.
“Think about Walmart. It’s a large food and consumables business, with pharmacies and clinics and value-based care partnerships,” Bowie said. “We have to work across silos. Outcomes of helping customers manage their health in a more affordable way is the future dream state,” she said.
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Bowie also pointed out that by 2026 Gen Z will make more than 60% of purchase decisions via social media. “Where does health care play? How do we leverage these content platforms and even the metaverse?”
How can suppliers and retailers be more fluid and agile?
Mooney noted that for Wakefern it’s about nimbleness and setting objectives for 90 days. “We go and execute, and go back and look at what worked, what didn’t? What’s moved beneath our feet?” he said. “It’s about setting that objective with the expectation you are going to come back and revisit it, and reducing the rigidity of some of our guidelines.”
Pointing out that the pandemic made merchants and suppliers be vulnerable with each other and made people have conversations they wouldn’t have before, Cowell said, “As we evolve out of the pandemic I hope we don’t lose that muscle of being vulnerable.”
What emerging growth opportunities are we not investing enough time discussing? Mack asked.
“We understood customer needs and developed research to identify an opportunity to create a broader platform to engage customers around women’s health,” Wier responded. “We took a stand on the pink tax, giving a rebate on the menstrual tax for products in 13 states, decreased the price of menstrual care products 25% on our CVS brand, and opened a broader suite MinuteClinic and virtual care services for women’s health.”
Bowie moved the discussion to how personalization is growing in importance at Walmart. “We have 5,000 stores and sell in stores and online. We don’t have enough conversations about personalization and data. Customer centricity will be the future. The more relevant and more tied to customers’ needs, goals, past purchases and decisions, the more growth they will see.”
For Walgreens, developing teams is crucial. “We have to teach, mentor and have relationships. Are you fostering those?” Wolf said. “In addition, customers’ need for ultimate convenience and speed will be a core need. Keep pressuring ourselves as retail and supply organizations to get it faster.”
Lastly, Mooney advised that you have to treat every supplier differently, since they have different capabilities and needs. There’s also a finite amount of money. “Figure out, if this is how much money, what’s the best way we can spend it together and give you the best ROI?”