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DSN Industry Issues Summit: Eliminating retailer, supplier blind spots

Dan Mack’s panel tackled how to improve relationships between retailers and suppliers.

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. 

[Read more: Legislative Reform: Opportunities for action at both state, federal levels on issues important to retail pharmacy]

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How can we reimagine relationships and identify where the blind spots are?

Commenting on the fact that innovation is the source of growth for Walmart’s partners and retailers, Bowie said, “We’ve all gotten more sophisticated. True transparency in collaboration. You have to be honest about what is important to our business and cus- tomers and have real conversations about where innovation comes from.” 

She also noted that being customer-centric and truly solving customer problems is crucial. 

“When you take a customer pain point and brilliantly solve it, that is what customers react to and what drives growth,” Bowie said. “Recognizing that you sit in a category of consumer space that is important, but as one of your partners, Walmart has a focus. Becoming purpose driven is a key part of our mission. We help people save money so they can live better.” 

Wolf chimed in, stating that when customers walk into a store or go online they expect products. “We need to think differently about supply,” he said, adding that curiosity and the pace of change won’t slow down.” 

Wolf went on to say that customers demand fast and easy access to health care. He advised that we have to think differently and ask the right questions. “Are you solving a customer problem in a new way? Be courageous. Change is hard and change is happening. Our buyers don’t have infinite aisles. Are we being bold together, making hard choices?” he said. 

Wier took the discussion further, noting that CVS talks about innovation internally and with suppliers. “Supply is stable stakes,” he said. “We need to think about the customer first. Is this innovation going to be incremental to the customer experience? Is the brand the right type of brand for this product, and at the right inflection point to come to the masses? Is the brand extension appropriate for the category? Most critical is the brand plus innovation combination.” 

Wier also noted that when he sees success, it’s about a net innovation that is incremental to the category. “Does it appeal to the customer from a brand perspective or is it the same recipe? Sometimes we see innovation that doesn’t have a brand that can cut through on the shelf,” Wier said. 

Pointing out that people think about their business metrics, Bowie said, “If you start with the customer problem, the solution will drive those sales.” 

[Read more: In the coming years more retail pharmacy brands will adopt technology to gain a competitive edge]

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. 

[Read more: Mass Appeal: How marketers are winning the skin care game]

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?” 

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