Like many retail businesses, drug stores today are not immune to economic downturn, inflation and supply chain challenges. Drug stores also have a small window of opportunity to capture shoppers’ attention when they are in the store or on the website compared to most other retail businesses.
That’s why they need to make the most out of existing loyalty data. Doing so allows them to achieve two things: target shoppers with hyper-personalized offers proven to build loyalty, and build more collaborative relationships with partners to gain insights to drive a better shopper experience. However, most legacy platforms aren’t built to make the most out of loyalty data – let alone enable collaboration with suppliers and partners. That’s why the modern drug store needs modern tools to help deliver targeted, impactful offers.
One way to achieve the right mix of offers is by enabling better collaboration opportunities with CPG partners as well as supplementing current loyalty efforts with AI-enabled insights that drive speed to value and prescriptive insights.
What Should Collaboration Look Like?
The answer to collaboration frequently revolves around technology. It does add immense value, but there is more to it than delivering computer capacity to crunch millions of lines of data in the fastest time possible. After all, if two competing retailers use the same data analytics solution, then it could be argued they should reach the same answers. However, we know this isn’t the case because myriad other variables influence outcomes.
It’d be easy to simply say that people are that variable — or at least one of them — but the reality is more nuanced: people can be either a good variable or a bad one. Obviously, collaboration requires the involvement of people, but for it to be a good variable, CPGs and retailers also need to know how to use that same data to make mutually beneficial decisions.
Think of it this way: You and a friend both decide to learn the same foreign language using a language learning app. If after a couple of months, you both have only done the lessons but not practiced speaking the language, you won’t make the most out of the experience. This collaborative process is no different: Retailers and CPGs both may have access to similar data, but if they don’t ‘practice’ with each other (i.e., jointly discuss the information to make decisions), all they have is data that may or may not make sense to each other.
How to Create Irresistible Offers
The relationship between retailers and suppliers takes time to build, but the challenge now is that the economy isn’t giving anyone much time, and impatient shoppers are quick to find alternative retailers if the right product at the right price isn’t available from the first store they check.
To accelerate this relationship building-process, drug stores need to look at AI/ML to analyze data to uncover insights more quickly, make decisions and execute customer-centric retailing tactics. AI/ML also has the added benefit of continuously learning from the data they ingest to increase confidence in the suggestions and data. For instance, that data can be used to guide personalized omnichannel marketing campaigns, which are increasingly difficult to get right due to shoppers’ dynamic channel preferences. A drug store can also collaborate with its vendor partners to quickly create customer-centric planograms with tailored assortments for its customer base.
The Win-win-win Model
Without AI, data can be a liability. Every drug store has more than enough of it, but if they can’t use it to get to know customers better, then competitors will swoop in. Retailers must be able to customize messages and offers to each customer by incorporating a 360-degree view of shopper attributes with predictive analytics.
The relationship between retailers and CPG partners was once a one-sided affair, with most vendors looking at collaboration programs as revenue-generating initiatives instead of true collaborations.
Modernizing the definition of collaboration in retail sets up the foundation for a win-win-win collaborative model that leads to an increase in incremental sales and profit for both suppliers and retailers by taking a more deliberate approach to driving more trips and growing baskets while rewarding shoppers for their loyalty.