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Generation next: Capturing millennial, Gen Z shoppers

How does retail pharmacy capture spending of millennials and Gen Z customers who seek convenience and digital connectivity?
Mark Hamstra

With their expanding range of in-store and online healthcare offerings, retail drug stores are well-positioned to meet the healthcare demands of today’s young consumers, according to some observers. Other product categories, however, such as beauty care, may pose more of a challenge for drugstore retailers, who compete against category specialists that are favored by young shoppers.

“We know that consumer expectations are shifting across the board,” said Garry Marshall, director of pharmacy strategy for clinical effectiveness at Wolters Kluwer Health, which provides a range of technology solutions for pharmacies. “However, the younger generation of healthcare consumers have grown up in a more ‘on-demand’ society.  It is natural that they would have the same expectations of healthcare.”

Given retail pharmacies’ abundant presence in their communities, it makes sense that young consumers will want to turn to these convenient locations to get a diagnosis for a minor ailment, for example, he said. Wolters Kluwer’s Pharmacy Next survey found that more than half of Gen Z and millennials (56% and 54%, respectively) have visited a pharmacy for care in the past year, compared with 40% of Gen X and 35% of baby boomers. The survey also found that 78% of younger consumers are open to having medications such as antibiotics prescribed by a trained pharmacist.

doctor pharmacist virtual care web

Providing an omnichannel experience

Young consumers will expect their healthcare experience to be flexible, with a digital experience augmenting their in-person care, Marshall said.

For example, younger customers have a digital-first mentality and are more video-and text-
centric than older consumers, he pointed out. That means information provided to young consumers will potentially be more effective if presented in digital formats, he said.

“Pharmacies that adopt ways for [consumers] to get their information on demand via QR codes, texts, or video ... are going to see more traction and loyalty,” said Marshall.

Younger generations are using technology to inform, influence and secure their purchases across all industries and product types, said Phyllis Houston, VP of pharmacy enablement and performance at Cencora (formerly AmerisourceBergen). Houston oversees the development and implementation of Cencora’s pharmacy quality performance and clinical strategies for community pharmacy customers, including those that comprise Cencora’s Good Neighbor Pharmacy network.

[Read more: Forecasting the future]


According to the 2023 Good Neighbor Pharmacy Voice of the Consumer shopper research report, younger generations take an omnichannel approach to shopping. They value convenience and leverage technology to search for products and services through mobile apps and websites. The report found that social media, internet search and YouTube ads are the top ways that young shoppers discover new products.

“We also know a large portion of Gen Z are buying products based on an influencer’s recommendation,” Houston said, citing research from Hubspot’s U.S. State of Consumer Trends Report.

In addition, consumers want to use digital services to have 24/7 access to retailers, including pharmacies, according to GNP’s shopper research. “The quality and competitive price of products, as well as user experience, are also top of mind,” said Houston. “While price is important to everyone, today’s younger generations use technology to compare prices prior to making a purchase.”

“The younger generation of healthcare consumers have grown up in a more ‘on-demand’ society. It is natural that they would have the same expectations of healthcare.”
— Garry Marshall, director of pharmacy strategy for clinical effectiveness, Wolters Kluwer Health

Online education and information

Pharmacists can use digital channels to engage with their local community by providing education and healthcare information around products and services to support health, wellness and prevention of disease, said Houston.

“Being able to access this type of information, at their convenience and when pharmacies are closed, could also help earn the trust and loyalty of new, younger customers,” she said.

Houston also agreed that offering more wellness services, such as health screenings, immunizations and point-of-care testing, presents a key opportunity to bring younger shoppers into the store.

As pharmacies add more healthcare services, they will need to rethink their staffing and processes in order to meet the expectations of these young consumers around convenience, accessibility and the ability to schedule appointments online, for example, said Marshall of Wolters Kluwer.

“We saw some concerns by Gen Z and millennials about whether pharmacies have the capacity to become the new primary care hub, so providing such services for common ailments, such as testing for strep or sinus infections or administering flu shots, will require a bigger or realigned headcount,” he said.

Creating workflow efficiencies using tools that support clinical decision-making and provide patient education and engagement can help with the staffing challenges that drug store retailers will face, Marshall said.

Meeting Young Consumers Where They Are

With younger consumers relying heavily on digital connectivity in nearly every aspect of their lives, some drug store operators have stepped up their online efforts to attract and retain these customers.

“It’s no surprise that younger generations shop and engage with pharmacies differently than older generations,” said Shahida Choudhry, pharmacy manager at Palms Pharmacy, a Health Mart pharmacy in Tampa, Fla. “Not only do they rely heavily on social media for information, but it also has a huge influence on what they buy, who they trust and where they shop. You have to capture their attention in such a way that they will listen.”

As a result, Choudhry, who has been featured in the Pharmacy Podcast Network’s 50 Most Influential Leaders in Pharmacy Awards, focuses on reaching younger customers via digital platforms, including social media and e-commerce.

“We’re on all social media channels, though I would say our biggest push is on Instagram for younger customers and Facebook for older generations,” she said. “We work hard to provide education, but it has to be fun also. We’ve been successful posting about fun and trendy topics, and following with an informational post about weight loss or ADHD. These posts generate interest and questions, and then they’ll start following us, liking us—and ultimately, they start trusting us.”

Young consumers are investing money in themselves and in their own wellness, and that provides opportunities for both in-store and online sales, Choudhry said. The retailer uses Shopify as its e-commerce platform, and includes a “Shop Now” link in every social media post and in notification text messages.

“We also have a QR code on postcards in our delivery containers to make it as easy as possible,” Choudhry added. Palms Pharmacy’s recent post on energy supplements had more than 10,000 views in just three days. This led to questions for the retailer and engagement with the pharmacy, as well as increased sales, she said.

“In order to attract younger customers, I would encourage other pharmacies to get out there,” said Choudhry. “Enlist a clerk, a technician or a younger person on your staff and give them ownership to create and maintain an online presence.”

Young consumers are seeking the ease that online purchasing provides, and if retailers have an online store, these shoppers will use it, she said.

“Pharmacists are known as one of the most accessible and trusted healthcare providers,” Choudhry said. “It’s my passion to connect with my patients and see their progression. The connection that starts online should in no way change the way I deliver my expertise or the accountability I have to their health and well-being.”

Opportunities for OTC products

Given that young consumers are prioritizing the importance of living a healthy lifestyle, drug store retailers should stock health and wellness products that align with this desire, said Houston. She cited products such as vitamins, minerals, supplements, and organic and natural local products and noted that retailers should also promote the online availability of these products.

Marshall said that the use of pharmacy-based healthcare services among young consumers should carry over into the OTC department as well. “Growth in these categories will likely organically accompany growth in consumer health market share,” he said. “With convenience as the name of the game, stopping in the community pharmacy for a quick strep test, prescription, and a few other needed items will appeal to all consumers, as well as online ordering for store pickup or home delivery. We are going to have a generation of consumers who are going to see this as a standard for shopping.”

Consumers following up on healthcare appointments and following their doctors’ guidance could be interested in buying products such as vitamins and sunscreen to procedures such as Cologuard to support their treatment and recovery, Marshall said.

Beauty care and Gen Z

Among younger consumers, Gen Z (those born between 1996 and 2010) has already emerged as a distinct group, especially when it comes to beauty and personal care products, said Alison Schilling, managing director and partner in L.E.K. Consulting’s consumer practice. 

“Gen Z has different values, they shop differently, and they’re getting information differently,” she said.

A recent research report from L.E.K. Consulting found that Gen Z consumers clearly prefer to shop at beauty specialist Ulta for beauty care products, as cited by 82% of consumers. Amazon followed at 75%, and then Walmart and Sephora were close behind at 74%, and Target came in at 68%. Drug store chains CVS and Walgreens lagged these retailers by double digits, with scores of 55% and 54%, respectively.

[Read more: Target, locked]


Claire Davies, managing director at L.E.K. Consulting, pointed out that despite their comfort with digital platforms, Gen Z consumers actually enjoy shopping in brick-and-mortar stores.

“The role of the store is still alive and well, and actually Gen Z wants to shop in-store almost more than the prior millennial cohort,” she said. Almost all Gen Z consumers, however, will start their shopping research online, even though they end up buying the products in-store. This is especially important in the beauty categories, where consumers want to experience the products in person after researching them online, but before they make their purchases, said Davies.

“For drug stores, it becomes a matter of what your store is doing to win out for their footfall,” she said.

The value of personal recommendations

A key point of differentiation for Gen Z shoppers in the beauty category is the value they place on personal recommendations, said Schilling. 

“Everyone wants a good value, but they actually want things that work, and they want to have proof that they work,” she said. “They believe social media, they believe the microinfluencers, and they believe their friends and family. They are really looking for that personal recommendation.”

One of the challenges that drug store retailers face when it comes to attracting young consumers is the product assortment they offer, said Schilling. Gen Z shoppers are not always as interested in some of the mass market brands that drug stores tend to carry, she said, and are attracted to the wider range of brands and products available at retailers such as Ulta and Target.

ulta beauty at target

“Target has expanded their range, and made it more applicable to a wider variety of consumers,” she said. “I think we’ve seen some of the drug stores try and do that, but it just hasn’t been to the same degree that we’ve seen in places like Ulta and Target.”

In addition, if a consumer’s online search experience begins with a retailer such as Sephora or Ulta, for example, it follows that the consumer will look to make its purchase at those retailers as
well, said Davies.

This reinforces the need for drug stores to provide the kinds of digital experiences that can drive young consumers to translate their online research into in-store visits and purchases.

“Gen Z has different values, they shop differently, and they’re getting information differently.”
— Alison Schilling, managing director and partner, L.E.K. Consulting’s consumer practice.

The challenges of private label

Companies such as Ulta also offer private label beauty care products that are outside the realm of what most drug stores are merchandising, said Schilling.

“Drug stores do a great job with private label in the non-beauty categories,” said Davies. “But there’s a question in my mind around whether the [drug store] brand is going to resonate from a beauty perspective. A company like Sephora is known for beauty, so consumers trust it.”

The challenge for drug stores seeking to attract young consumers with private labels in categories such as color cosmetics is that these products require significant investment, said Schilling.

“It’s like a high-fashion business,” she said. “There’s a lot of churn. You need to reinvent your color scheme every season, and launch new products. There’s a lot of investment that goes behind all of that.”

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