Opportunity for drug chains lies in upgrading baskets

6/29/2009

LAKEWOOD, Colo. —During this recessionary period, shoppers may be abandoning the convenience of the stand-alone drug store format in favor of their mass merchant or grocery pharmacy; it’s one less trip, according to 33% of shoppers who reported that they are consolidating trips as a cost-saving strategy.

Overall, 37% of American shoppers have reported purchasing less across all categories at drug stores, with 20% buying fewer prescription drugs compared with last year. In addition to trip consolidation, 44% of respondents to a recent consumer survey conducted by the Integer Group and MARC Research reported that discount or loyalty programs have prompted them to relocate their pharmacy business.

Pharmacy operators have a few options to stave off consumer erosion, advised Andrew Morse, director of insight and strategy for the Integer Group. “[For example], as more monthly customers seek discount prescription alternatives, one thing to do is reinforce the role of the drug chain as a trusted health adviser, not just a place to drop off and pick up prescriptions,” he said. “The success of WebMD and the MinuteClinic model suggests that accessible, affordable, basic health information is in demand.”

And drug stores do enjoy some advantages, such as a high shopper conversion rate of 83%. Visitors to drug stores don’t just come to shop—they buy. “In department stores, home stores and electronics stores, for example, shoppers are more likely to be browsing, planning a future purchase or [engaging in] competitive pricing,” Morse said.

“In drug stores, like grocery and convenience stores, most visitors have at least one shopping objective in mind when they walk in the door,” Morse continued. “The opportunity for drug chains is, simply, once the shopper walks in to buy one item, how can they upgrade that basket?”

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