Ideas in Action: Perfecting an omnichannel approach

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Ideas in Action: Perfecting an omnichannel approach

By David Salazar - 03/28/2019
It’s no secret that retail has changed — and it’s even less of a secret in the industry that retailers and suppliers are constantly rethinking how they can capture share of the consumer’s mind and wallet. Though it can often feel like a moving target, a panel of retail executives in the OTC category convened at the 20th Drug Store News Industry Issues Summit in New York late last year to discuss some of the “Ideas that Matter” when it comes to building retailer-supplier partnerships in an effort to win consumers over.

“There’s more ambiguity and uncertainty than ever before — and that’s why we’re having this conversation,” said moderator Dan Mack, founder of Mack Elevation, a coaching and strategy consultancy in Chicago. “When you think about the big digital and cultural shifts that are occurring, all of us are experiencing more change than ever before. We’re all living in a world where embracing agility and speed is the ultimate core competency.”

That, combined with the rise of what Mack called the “reputation economy,” consumers’ gravitation toward purpose-driven companies and the still widespread importance of word of mouth — about 13% of OTC dollars comes from a personal recommendation — creates an environment where knowing one’s customer, delivering on their needs and intimate relationships with brands are vital to business success.

One area where communication between brands and retailers can be especially important is in marrying the digital with the physical to create a seamless omnichannel experience. Because of the way that consumers undertake product discovery and do their shopping, brands must rethink their approach, according to John Peine, Target’s senior divisional of health care and optical.

“We’ve been saying for years now that the new front door to Target is through your mobile phone,” he said, highlighting the growth of digitally native brands, including Harry’s, with which Target partnered for a retail launch after it had established itself in the online men’s grooming space. “In this day and age, every brand should view themselves as digital natives because if someone has not yet purchased your products, the first exposure they’ll have is likely online or on their phone.”

Peine said that having detailed product information that includes ratings, reviews and multimedia should be part of that. The question for suppliers, he said, is “What does your digital footprint say about your products, and how does that come to life throughout the creation of the purchase process?”

AmerisourceBergen’s Doug Trueman, vice president of consumer products and strategic global sourcing, echoed Peine in highlighting best practices to help reconcile digital and physical, particularly in the independent pharmacy space, where he said that the need for brands there is “to extend care.” To do so, he said that brands should focus on inventory, as out of stocks and customer service are a key friction point.

“In this technical age, there’s so much emphasis on innovation and the next disruption. While this is incredibly important, it’s also essential to remember the basics: standout customer service and in stocks,” Trueman said. “A sick patient that walks into a pharmacy wants to feel confident that the over-the-counter medication he or she needs is going to be right there in the cold and flu aisle. On top of that, they want their pharmacist to be knowledgeable, prepared with answers, and supportive in product selection. More simply, the patient is expecting quality care.”

Trueman also said that images make it easier for independent pharmacists to order the products on Good Neighbor Pharmacy’s ABC Order platform, as well as insights that highlight what the product can provide.

“To me, being a good distribution partner means being a champion of a brand’s story. A branded consumer product has a long journey from production to the shelf and to a shopper’s basket,” Trueman said. “At AmerisourceBergen, we aim to make sure that a product’s value proposition and story is seamlessly pulled through the entire supply chain and ultimately through to the patient at checkout. This means we’re invested in making sure that the product is well represented in places like the aisle and on digital sites, such as the pharmacist’s ordering platform.”

Success also can come from the logistical side, according to Annie Walker, Walmart vice president of OTC merchandising. She said that as Walmart builds out its omnichannel offerings — from pickup towers to online grocery and beyond — suppliers can help retailers ensure that it works in two ways: testing it out for themselves to identify potential hiccups, and by having a buttoned-up supply chain.

“I believe that the vast majority of the problems that exist are where, down the road, there are some logistics gaps that occur within your supply chains,” she said. “I encourage you to really have a good understanding of tracking and knowing where your goods are, how they’re flowing — and being confident you know the extent of your supply chain and how it flows.”

Two components of the omnichannel experience that offer avenues for tandem navigation between manufacturers and merchants are around localization and personalization.

Part of this is because the online arena has created the need for retailers to adapt their approach to localized assortments, according to Robert Tompkins, Walgreens group vice president and general merchandise manager of health and wellness.

“Localization of course has been redefined now because of e-commerce,” Tompkins said. “You have to understand that localization now is a digital phenomenon, and you can create incredible efficiency by getting niche items online — and suppliers enabling that and being nimble enough to get even niche products online helps us a lot.”

Tompkins said that Walgreens has implemented regional merchandise managers, who are able to get local products on the shelf. He also said that Walgreens no longer has a “one size fits all” mentality because each store’s customer base — and ROI — are different, and suppliers that understand this are particularly helpful. “We really look to suppliers to push us on this,” he said. “We need your intelligence in helping us understand what we can sell and where we can sell it. Help us make a good, efficient decision upfront in getting products into the right stores, where they can succeed and you can grow from there rather than pushing too far up front.”

George Coleman, CVS Pharmacy’s senior vice president of merchandising, said that the human factor plays a key role in personalization, which is why he said the company has invested savings from the recent tax cut into front-line employees. “The people who have the biggest impact on the impression of a local, personalized place is the pharmacist and pharmacy tech,” he said. “It can’t be really personal without human beings really feeling that at the retail level.”

He said that while another part of personalization is reaching out through CVS Pharmacy’s Extra Care loyalty program at the right moments and proactively communicating with customers, the ultimate f

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