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Contributing Editor Christine Blank is a freelance writer based in Florida.
Consumer shopping habits have changed in the new economy and some of those habits will have an impact on purchases of prescriptions and OTC healthcare products for the next few years.
Consumer shopping habits have changed in the new economy and some of those habits will have an impact on purchases of prescriptions and OTC healthcare products for the next few years, according to Thom Blischok, president of consulting and innovation for Information Resources Inc. (IRI).
“By the middle of 2010 unemployment will have stabilized. But we will see a new, conservative shopper among all income segments,” Blischok said during an NACDS and IRI-sponsored webinar this week.
He said the new conservative shopper consumes six percent to 10 percent less across all product segments, makes more of his or her purchasing decisions at home, is looking for the best value on products, and is buying more private-label merchandise. Already, the “best value” proposition is affecting shoppers' purchases of healthcare and beauty products.
Over the last six months, 23 percent of consumers who have incomes of $35,000 a year or less said they had decreased their spending on healthcare products. And 17 percent of people who earn $35,000 to $55,000 a year said they have cut back on buying healthcare products.
Personal-care product sales have also been affected: 25 percent of those earning $35,000 a year or less have cut back on spending for personal-care products and 19 percent of those earning $35,000 to $55,000 a year have cut back, according to IRI.
Consumers surveyed by IRI also made these statements about buying healthcare products in this economy: “I look at the specials a lot more,” “I use coupons,” “If I get sick, I don’t have insurance, so I just get something over the counter,” and “I try to buy in bulk or ‘buy one, get one free,’ especially antibiotic creams…”
Another factor affecting healthcare product sales is that shoppers across all income segments are increasingly making their shopping lists at home, rather than making impulse purchases in stores. A whopping 83 percent of Americans are making their purchasing decisions before they go into stores. In the OTC healthcare realm, 67 percent of consumers surveyed by IRI said they are making purchasing decisions about pain relievers at home, along with 66 percent of people deciding about digestive aid products at home, 65 percent choosing vitamins and supplements at home, and 54 percent choosing over-the-counter cold medications and antibacterial creams at home.
“What does it mean for the retailer? You have to recognize how you are going to get into the home more. The internet plays a much more important role in helping people make decisions. The FSIs [freestanding inserts in newspapers] have to be retuned to be relevant to shoppers…and in tune to overall health and wellness. And signage in-store must match what is given on the Web,” Blischok said.
The trend toward private-label purchases is also affecting many OTC healthcare categories, with shifts being seen primarily in OTC allergy and sinus medications, pain relievers, bandages, and antibacterial ointments.
For example, over the past year, 15 percent of healthcare shoppers said they have switched from branded allergy and sinus medications to private-label versions, and 11 percent switched to buying a lower-priced brand. Three percent of healthcare shoppers have stopped buying allergy and sinus products altogether.
Blischok expects the “conservative shopper” trends to last for the next 18 months to four years. The good news is, however, that the conservative shopper will be spending more on certain healthcare segments in the future.
This conservative shopper is focused on preventive-care solutions, such as healthy food choices and weight management. These represent a significant opportunity for retailers who offer a comprehensive preventive-care program. “Preventive care is [worth] $100 billion and growing, and no one [retailer] has centered around affordable preventive care,” Blischok said.
In other good news for drugstores, shoppers are turning to drugstores when they're ready to buy their healthcare products. Fifty-five percent of approximately 720 consumers surveyed said they will visit drugstores for their healthcare needs over the next year, while 65 percent will buy their healthcare products at supercenters.
“Drugstores are the new convenience stores for women. You can go pick up your healthcare products, get a drink at some places, food at some places, and your prescription,” Blischok said.
Shoppers who talked to IRI said they shop at drugstores because in some cases they provide better value. “You can earn CVS ‘Extra Bucks’… Every little bit helps in this day and age,” one shopper said. Another shopper said she shops for healthcare products at a chain pharmacy because she “trusts the people there.”