Chain Drug Review, August 26, 2019

PERSPECTIVES FRONT END CHAIN DRUG REVIEW 2019 TSE unites the industry for a powerful experience By Steve Anderson Expo was announced in 2011 and when it was launched in 2013 the power of the event was known to be its ability to bring together diverse team members from retail and supplier companies The key is having pharmacy health and wellness CPG supply chain operations and many many other professionals together at one place and at one time Why is this so important It Attendees tell NACDS these meetings often prove to be game changers comes down to efficiency and experience Consider the efficiency of the NACDS Total Store Expo This industry event would present tremendous value if this point were considered on its own Retailers and suppliers have the opportunity to conduct an incredible number of meetings over the course of a very short time However the value related to efficiency goes much deeper than that In addition entire teams have the opportunity to conduct meetings that overflow in quality and quantity alike It is commonly known that the larger suppliers have representatives who live and work near the headquarters of the larger retailers In this Private label manufacturers Are they getting the message By Todd Maute manufacturers in pursuit of a common goal developing innovating and leveraging powerful store brands in the health and wellness space By aggressively pursuing store brands that speak to health conscious audiences drug stores stand to acquire these valuable customers for a lifetime It is a change that needs to happen From a private label perspective the convenienceoriented part of the store sandwiched as it is between beauty pharmacy and an explosion of new medical and quasimedical services remains relatively unsophisticated To be sure chains have made Already seeing the next wave in CPG packaging some progress CVS Health for one now offers the likes of Gold Emblem Abound Dried Organic Pineapple But by and large the national chains are still taking an old school approach to private label one built around a typical price value message In a recent column Chain Drug Review editor David Pinto described the 2019 NACDS Annual Meeting this way In an ever changing retail universe a world where todays bright hope is tomorrows used to be the NACDS Annual Meeting held each spring remains the standard by which retail meetings are or should be judged To borrow a well known phrase to those who regularly attend the NACDS Annual Meeting no explanation is necessary to those who do not no explanation is possible The same is true for the NACDS Total Store Expo The industry will unite in Boston August 24 to August 26 for the natural progression of the work accomplished at the NACDS Annual Meeting and for new opportunities Even if as David Pinto puts it no explanation is necessary I feel compelled to attempt an explanation for the extraordinary value that the NACDS Total Store Expo presents When the NACDS Total Store way they have the opportunity to collaborate on an ongoing basis However only at the NACDS Total Store Expo can this collaboration feature the insights and engagement of a more full array of team members across disciplines Attendees tell NACDS that these meetings often prove to be game changers and that they otherwise would not occur depriving these partners of their benefits Entire teams from companies of all types and sizes can meet with a highly significant number of business partners throughout the NACDS Total Store Expo Beyond efficiency tremendous value exists in the ability of entire teams to experience the conferences offerings together The NACDS Total Store Expo is much like a laboratory From the Insight Sessions to the Exhibit Hall collaborators within companies and across companies can experience and discuss new ideas and concepts instantaneously This creates an explosion of interaction that cannot be replicated in a conference room I am often asked What will be new at this years NACDS Total Store Expo That is a question that goes directly to the experiences that teams will have as they immerse themselves in the conference together So much of what is new at the conference is a direct result of the new products and services that exhibitors put on display The same is true of the priorities and strategic direction that are shared by retailers Through their very engagement the participating companies create what is new In addition the topics presented in the Insight Sessions and in the other formal conference programing are selected strategically The focus is on presenting compelling content that is best experienced on a cross functional basis Topics covered in this years programming include redefining shoppers digital and physical experiences eliminating friction for mobile first shoppers retail differentiation strategies consumer empowered health the ever changing multicultural consumer market current thinking on purpose driven brands the outlook for CBD pharmacys opportunities in preventive care pharmacy regulatory compliance and much much more The opportunities for teams to experience all of this together and to discuss and debate it real time create a tremendous opportunity for all those involved Thinking again about David Pintos words that for those who engage regularly in NACDS meetings no explanation Steve Anderson is necessary I think that has a lot to do with the fact that there is something unique about these meetings for each company All of the conversations that take place at the NACDS Total Store Expo are probably quite different from each other because companies are pursuing strategies that are somewhat unique to their companies From the standpoint of the NACDS Total Store Expo what matters is that diverse team members are being brought together in an efficient way which fosters unbeatable experiences That is the explanation that I feel compelled to offer even if one is not needed Steve Anderson is president and chief executive officer of the National Association of Chain Drug Stores Todd Maute As drug stores remake themselves under the banner of health and wellness they are taking a second look at anything that may strike consumers as off brand In this regard one major loose end continues to be the center of the store packed as it is with potato chips soft drinks candy and other items widely seen as unhealthy This discordant note will only get louder as brickand mortar pharmacies start to look and function more like holistic health care centers So how can drug stores balance an appeal to the current elder consumer value and convenience oriented shoppers who in many cases are looking for bread cereal and other basics with the need to attract newer and younger consumers The latter group after all is less brand loyal seeks a healthier lifestyle and likes having holistic store brand experiences Fortunately the answer is already within reach Taken together the top chains operate some 20000 stores across North America That means they have the scope and scale to forge strategic alliances with With greater commitment to healthy store brands drug stores could drive enough demand to satisfy large manufacturers minimum volume requirements and perhaps spur the rapid growth of niche specialty manufacturers focused on meeting or creating that demand as well Some might think of Whole Foods Market or Sprouts Farmers Market as having scope and scale but combined they operate only about 800 stores Strategic partnerships with manufacturers would with time grow and develop the entire supply chain infrastructure needed to maximize better for you store brands at national drug store chains Remember the opportunities here are enormous Organics are only part of the picture Todays consumers are looking for products that are free from pesticides yes but also gluten animal products sugar genetically modified ingredients high fructose corn syrup BPA exploited labor and much more There is broad potential to introduce not just new pricing tiers but also innovative approaches to sustainable packaging of food and nonfood items We are already seeing the next wave in consumer packaged goods packaging call it the War on Plastic and it is bound to gather momentum The health of the planet affects human health and it may become increasingly important for shoppers and patients Store brands are or should be an extension of the retailers brand purpose They are marketing tools not mere marginenhancers They allow drug stores to set themselves apart reinforce their brands purpose cement shopper loyalty improve price perception boost the bottom line through higher gross margins and tell their customers a holistic wellness story In leveraging their enormous portfolios and great locations chain drug stores could mainstream private label health and wellness products on a grand scale This would create some serious competition for specialty grocers However drug stores will need store brand manufacturers as partners To the extent that drug stores embrace fresh convenience and grab and go food as is happening in much of the c store sector they will also need access to fresh cold supply chains The time is now to start leveraging scale rebuilding the logistics side of the business developing products that are better for you and making lasting commitments to brand right private label strategies By forging new relationships not just with customers and joint venture partners but also with manufacturers and suppliers the national chain drug stores stand to drive traffic sales and loyalty for the healthfocused future that is already emerging Todd Maute is a partner at CBX the New York based brand agency and retail environments consultancy He can be reached at tmaute@ cbx com 26 Chain Drug Review August 12 2019