Stockchecker on smoking cessation
The Hamacher Resource Group provided the information for this article. The Milwaukee company provides marketing services and business intelligence to the healthcare industry. Wholesalers, manufacturers, and retailers partner with Hamacher Resource Group to improve their profitability. For more information, visit www.hamacher.com .
For some smokers, nicotine can be as addicting as cocaine, so kicking the cigarette habit is not easy. According to the National Center for Chronic Disease Prevention and Health Promotion, only 4.7% of those who quit smoking in the past year were able to abstain for three to 12 months. On average, a smoker who wants to quit will try five to seven times before succeeding.
Preliminary data for 2001 indicate that smoking continues to decline among adults. In 2000, 23.3% of adults were considered smokers. In 2001, that number dropped 0.5% to 22%. The only group that did not register a decline? The 18- to 24-year-olds--the age when many people typically start smoking.
Both sales dollars and unit shares for smoking cessation products increased in drugstores over the past year. Sales grew 7.56%, while unit sales climbed 2.2%. The category as a whole rose 4.35% for the 52 weeks ended Sept. 8, 2002, according to Information Resources Inc. (IRI).
Drugstores, with their 74% market share in dollar sales, are the obvious outlet of choice among consumers.
|Sales (000)||Market share|
One manufacturer, GlaxoSmithKline, produces the brunt of category sales. Its Nicorette and Nicoderm lines dominate both unit and sales volume, although private-label products, the majority produced by Novartis, are siphoning off some of GlaxoSmithKlines market share. Also, Phamacia is entering the mix with its revamped Nicotrol line, featuring the first 16-hour patch.
Private-label (PL) products are making significant strides in the smoking cessation category. PL products represent 27% of total category sales and 34% of total unit sales, according to IRI. Within the category, the percentage of PL dollar share has risen compared with last year, increasing 80% for antismoking gum products and 19.6% for antismoking patches. Thats great news for retailers because PL margins in the category are typically 7% to 10% higher than the national brands.
Not only are PL products financially rewarding, they also strengthen your pharmacys pricing image. Customers are looking for economical alternatives in this category, and PL products offer the same results as name brands at a price thats more affordable. The average cost per day for PL nicotine patches is $2.60. The average cost for a pack of cigarettes is around $4. Health benefits aside, these numbers make an economically compelling case with customers who believe smoking cessation products are too expensive.
At Hamacher, we used to include smoking cessation with our Health Maintenance department. After further research, we concluded that a separate four-foot-wide display is a better choice, allowing retailers to position the department wherever they see fit. However, we strongly suggest that you locate the department as close to the pharmacy as possible. Keeping such high-ticket items near the pharmacy helps deter theft.
In merchandising the categories, we keep brand families together. Nicorette deserves the best shelf placement, followed by Nicoderm, Nicotrol, and private label. Stock at least four private-label items in a 16-linear-ft.set (thats four shelves by four feet wide). If you decide to place the private label to the right of the brand, use "compare-and-save" signs to highlight the savings.
With the multitude of choices and varying strengths of gum and patches, customers are bound to have questions for the pharmacist. Heres your chance to help with product selection. Another way you can help quitters is to support their effort, offering words of encouragement or providing reading materials. The American Lung Association has a great Web site with a listing of the various benefits of quitting. We suggest you visit the site and print out a few copies to distribute to your customers. This handout can be found at http://www.lungusa.org/tobacco/quit_ben.html .
Provide whatever support you can. Your efforts will help build a stronger relationship with these customers and win their loyalty for your drugstore.
|Linear Feet Number of SKUs Estimated sales per year Estimated inventory retail Retail inventory turns||16 34 $17,500 $3,100 5.6|
Use this partial never-out list to monitor your in-stock condition. The items listed can account for more than 50% of the dollar sales in the smoking cessation category. An out-of-stock on any of these items represents a significant loss of sales.
____ Nicoderm CQ Step 1 Patch 21 mg 14 ct
____ Nicoderm CQ Step 1 Patch 21 mg 14 ct Clear
____ Nicoderm CQ Step 2 Patch 21 mg 14 ct
____ Nicorette 2 mg Starter 108 ct
____ LiteN Up Smoking Filter 90%
Sandra Levy. Smoking cessation: When being a quitter is a good thing.