Consumer-generated content is critical to competing against Amazon in private-label OTC

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Consumer-generated content is critical to competing against Amazon in private-label OTC

By Cheryl Sullivan, PowerReviews - 09/12/2019
The ever-increasing competition from Amazon looms large over most drug and pharmacy retailers. Amazon’s private-label strategy and the decision last year to launch an exclusive line of over-the-counter health products threaten to cannibalize sales from drug and pharmacy retailers both online and in store.

It’s no surprise Amazon chose to move into the private-label OTC space. According to the Private Label Manufacturer’s Association, one in every four products sold in the United States is a private-label brand. Private-label sales have reached 4.4% of total sales, adding $5.5 billion in sales to reach $125 billion, and as high as $170 billion. Given the competition, how can your company ensure that it keeps and grows its share of the private-label marketplace?

With the proliferation of shopping options, a vast number of products and the expansion of e-commerce, consumers can be overwhelmed when it comes to making decisions about prescription and OTC medications. Increasingly, consumers have become strong self-advocates for their health. This trend, coupled with the growing loss of trust by consumers in retailers and brands, has made consumers increasingly reliant on their social communities and customer reviews for critical insight when making OTC decisions. Consumer-generated content has never been more important and valuable.

Take a Tool from the Amazon Toolbox
One of the most powerful tools Amazon has is the ability to provide ratings and reviews to their shoppers, including for OTC products. PowerReviews conducted a 2019 health and beauty consumer study across 2,000 consumers and found 22% of shoppers said consumer reviews motivated them to choose Amazon over another retailer, while 15% preferred Amazon due to the consumer videos and images. Nearly half of shoppers said they start their search on Amazon, and 40% of shoppers reported they faithfully read reviews every time before purchasing health and beauty products online.

Brick-and-mortar retailers can’t dismiss the importance of reviews and ratings in Amazon’s looming threat to them. According to this study, 78% of consumers said they read ratings and reviews while shopping in store. Reviews can be a game-changer for retailers, especially when it comes to new product launches or private-label products.

Build a Powerful End-to-End Content Program
If you’re just starting your consumer-generated content program or wanting to ramp it up on specific products, rapidly building reviews can be challenging. Taking advantage of an advanced user-generated content platform enables retailers to quickly build up their authentic reviews and other content. In addition, they can increase their product launch success rates by “testing the waters” through sampling campaigns that provide retailers rapid feedback on product issues.

Sharing content effectively demands a comprehensive, integrated platform — one that incorporates a robust syndication network and surpasses legacy platforms’ basic ratings and reviews capabilities.

The platform must provide:
• Authentic reviews that are free of fraud or inappropriate language, such as profanity;
• Reviews that are moderated using technology and advanced algorithms, coupled with people reviewing the content thoroughly;
• FDA guideline compliance for prescriptions and OTC products; and
• Licensed pharmacists as part of a human moderation team capable of reporting consumer reactions and trends, and quickly raising concerns. For example, if any adverse effects with medications exist, these issues need to be escalated quickly.

Your consumer-generated content program should extend far beyond reviews and ratings, and enable you to enhance the customer experience by interacting with your customers, answering questions, and even remedying poor reviews before they post. These actions can improve your review performance by 120%, sales conversion rates by 114%, and result in customers purchasing four times more products, according to studies conducted across PowerReviews customers.

For drug store retailers to remain relevant in today’s competitive landscape, they need to step up their game and provide their customers with a broad range of authentic consumer-generated content, which includes reviews, ratings and visual content, while tapping into social and key influencer communities. When done right, this content can raise conversion rates, drive increased loyalty and positively impact financial performance.




Cheryl Sullivan is the chief marketing officer of PowerReviews.