10 Truths of OTC No. 5: The customer journey is in continual flux
Truth 5: The customer journey is in continual flux
How consumers buy healthcare products is ever more complicated, with on- and offline channels proliferating. Traditional OTC thinking envisages consumers making purchase decisions at physical points of sale, but this reality is eroding.
Offline still dominates, but online is growing fast. BI Intelligence suggests that online sales made up just 7% of the U.S.'s health and personal care market in 2015, but will grow by 13% CAGR by 2020. In the U.K., 12% of respondents purchased medicine online in 2016, more than doubling from 5% in 2012, according to the Office for National Statistics.
Other online disruptors include direct-to-consumer offerings from niche and independent OTC brands not sold at physical retailers and convenience-led subscription box companies, particularly in the fast-growing VMS category. Hello Day offers a personalized, seasonal supplement box in the U.K.
It’s not hard to see how health subscription boxes might be co-opted, extended and personalized by big online health retailers like Walgreens/Boots, DocMorris and CVS to suit various consumer types and their needs. But the million-dollar question is: Which brands get to be in the boxes?
And who can forget online retail behemoth Amazon? Its Dash button already allows consumers to repeat order healthcare brands including Mucinex, Estroven and Ensure. And it recently launched its own private label supplements brand called Elements.
Further competition and complexity comes from new offline wellbeing distribution channels like gyms, yoga centers and multi-level marketing companies like Forever Living.
Even as sales channels proliferate, the ongoing role of HCPs cannot be underestimated. Accent Health’s report "The Value of Physicians in the OTC Marketplace" found that 65% of consumers said they act directly on doctor’s OTC product recommendations. But in the same study “physicians report limited availability of OTC samples, with only 49% indicating they have OTC samples on hand.” P&G, RB and McNeil have dedicated HCP engagement websites for their healthcare brands, but many don’t – a real missed opportunity.
Pharmacy isn’t resting on its laurels against the online challenge. Many chains integrate their on- and offline offerings into a true omnichannel customer journey. In the U.K, Lloyds Pharmacy’s Perfect Prescription service enables click and collect for Rx and OTC purchases – customers may buy a particular branded product once and then automatically stick to it in perpetuity, unless something truly disruptive happens.
Expanded pharmacy services are also emerging in many markets, including vaccinations and screening facilities for blood disorders, cardio-vascular problems and early-stage diabetes. By the end of 2017, Accenture projects there will be more than 2,800 retail clinics in the U.S., a 47% increase since 2014. This, combined with a squeeze on frontline healthcare budgets, means pharmacists remain key influencers of OTC product choice. Large chains like Walgreens focus on their own private labels, another threat to branded products.
It’s clear that the point of purchase moments – where OTC brands can stand out and influence the consumer decision – are ever-changing. What’s also clear is that OTC brands must adapt to this complexity and engage in a language and manner that suits every touchpoint in the customer journey. If they don’t, something else will certainly replace them.
Over the last 20 years, DewGibbons + Partners has helped design some of the world’s most iconic and successful OTC brands, resulting in a deep appreciation of the visual and physical cues — and regulatory limitations — in the self-care and OTC marketplace. The need to challenge those cues and limits is becoming far more frequent.
This is the fifth truth in a 10-part series from Sara Jones and Nick Vaus of DewGibbons + Partners, which has worked for the last 20 years to help design iconic and successful OTC brands. The series, “10 Uncomfortable Truths that OTC has to deal with to survive and thrive in the 21st century,” will publish weekly and feature in the DSN Health and Wellness newsletter every week.
The first truth was recognizing there’s a problem in the first place.
The second truth unveiled that OTC medicines are more often in the brand-building business as opposed to the pharmaceutical business.
The third truth spoke to the duality of technology, the pace of technological advances may leave some OTC brands behind even as those same advances are seized as opportunities by new brands.
The fourth truth addressed the evolution of OTC offerings from acute sick-care to preventative health and wellness solutions, mirroring a health system that's becoming more outcomes focused.
Next week's truth concerns placing a focus on the end-user in OTC product development initiatives.
Sara Jones
Partner and client services director, DewGibbons + Partners
Sara runs DewGibbons + Partners alongside NickVaus, and heads up the client services team, leading branding and communications programmes for household names in OTC and health care. She’s always had a bit of a secret passion for OTC branding. Her Grandma was a pharmacist in London’s West End, leaving her with an abiding curiosity about active ingredients and how medicines work. She’s (in)famous for reading patient information leaflets cover to cover. Email her, follow her on Twitter or connect on LinkedIn.
Nick Vaus
Partner and creative director, DewGibbons + Partners
As well as running the agency with Sara Jones, Nick leads the studio in providing solutions that are innovative, creative, economic, and effective. Powered by Beautiful Thinking – a unique combination of right and left brain thinking that seamlessly binds together strategy, design and brand communications – he ensures that his clients’ businesses, brands and consumers are at the heart of each and every brief. Email him, follow him on Twitter or connect on LinkedIn.