A quick fix on Pharma Retailing

FUTURELAB

A quick “fix” on Pharmacy Retailing beyond 2009 Prepared by: Scott McLaughlin, Melbourne, Australia.

November , 2009

1

FUTURELAB

In the last 15 Years Patients have become Prescribers

Access to information has broken traditional models

Single channel solutions are no longer relevant

‌‌and its costing every body.

FUTURELAB

Consumers are taking health care into their own hands

FUTURELAB

Healthcare

As self care and self diagnosis are more accessible 4

FUTURELAB

And “Big Box” retailing is accelerating commodity and “leaving it up to me”.

FUTURELAB

RITE AID: Based on our spy mission to Rite Aid, it was immediately clear that the drugstore is winning with its store-branded merchandise………………………

But Rite Aid appears to be struggling with its premium products………….

CVS: ……a smaller selection of store-named products…..

Still, consumers in our store would find their deals on better-known names like Neutrogena and Herbal Essence, which allowed CVS to score high in the cosmetics/ hair care category. It also featured a huge 50% to 75% off promotion on cosmetics like Revlon and Physicians Formula.

WALGREENS: ……..the best job "tricking" its consumers with its "Compare & Save" campaign. ….Throughout the store, Walgreen-branded merchandise is strategically placed next to comparable name-brand items. ………tight inventory control……………….,, shoppers looking for some of their favorite brands may be disappointed. http://www.thestreet.com/story/10530482/2/the-shopping-spy-inside-the-drugstores.html

NONE OF THE ABOVE:

Its not what you do, it’s the way that you do it…….

Earning consumer trust.

6

FUTURELAB

When choosing a non-prescription medicine, what factors are important to you?

Global vs Europe

Is this why I am just as reliant on “my opinion� as the advice of a Pharmacist?

7

FUTURELAB

What do you think will be the main way your usage of non-prescription medicines will change?

And why people are seeking to lower risk through safe alternatives?

8

FUTURELAB

• More US adults use the internet than they use doctors for obtaining health and medical information.

• Consumers are much more likely to begin their quest for health information with a search engine rather going directly to a website.

• Consumers who visit product sites are nearly three times more likely than the average US adult to request prescriptions by name from their doctors.

• When consumers use search engines for pharmaceutical or health information online, they are most likely to search by the name of a specific condition/disease or the name of a specific product.

The critical role of Search is just an example

• The most common situation for which they use a search engine for this purpose is when they have symptoms for a condition.

• Approximately three out of four U.S. nurses recommend health websites to patients

And continue to search for objective and well informed views to help their own diagnosis 9

FUTURELAB

• Approximately two-thirds of ePharma Consumers think they can tell if a medical site is from a credible source prior to clicking on the search result, indicating that consumers feel that they are proficient searchers and are able to parse out relevant content for themselves.

………and they’re not afraid to use it 10

FUTURELAB

Can manufacturers be objective?

Shouldn’t retailers be more accessible?

Good advice matters to me, but who is helping me decide on what's right for me 11

FUTURELAB

……. they think Pharmacies will be increasingly important 12

FUTURELAB

As long as its within reach 13

FUTURELAB

Most people who suffer from arthritis, asthma or cardiovascular disease are aware that their well-being can be affected by the weather. Developed to warn them in advance, MediClim emails registered users when changes in humidity, pollen count, barometric pressure and temperature might change how they feel.

And I manage the relationship 14

FUTURELAB

If Doctors are less relevant

And they are helping me , not selling me.

15

FUTURELAB

It’s a journey to Customer Centricity 16

FUTURELAB

The right idea, executed by the right stakeholder will make the difference

Can Pharma get the offer right?

17

FUTURELAB

Pharma is trying…… but integration with Retail is …….

18

FUTURELAB

There is a lot being said, but……..

Digital / Social: use only as subscribed 19

FUTURELAB

Media "Tough economic times cause marketers to be held more accountable for spending and measurement," says Bard. "With over 145 million consumers online for health, new media offers cost-effective ways to reach and engage target audiences.�

Making media accountable, knowing one size does not fit all 20

FUTURELAB

So‌‌

If Doctors are less relevant

And Pharmacists advice is less accessible and less relied upon

Who is going to help me make informed choices?

Who can I rely on and how will they engage me on my terms?

What I need, When I need it, How I need it!

21

FUTURELAB Customer Journey

Customer Journey

Fighting in Commodity

Future Store Concept • Breadth of Range • Speed of Service • Impulse and complimentary up selling • Keen Pricing • Loyalty Discounts

VS

Value Adding and Profitable

Future Store Concept • Total Health Management • Focussed “Health only” range • Accessible & Consultative • Private / Personal • Vertically integrated offer across multiple channels

Retailers adding value to customers and profit to the bottom line 22

FUTURELAB

Traditional Retail Concept Design 1.

2.

3.

4.

Brand Immersion Consumer & Staff engagement Ideation / Idea Scanning Outdoing great Ideas

Futurelab Retail Concept Design 1.

2.

3.

4.

Consumer Immersion & opportunity identification Ideation and Brand Fit Profit Architecture Shape the multi-channel execution

Developing something consumers can swallow.

23

FUTURELAB

FUTURELAB

Athens Brussels Bucharest Chicago Hamburg Helsinki Iasi Kiev Melbourne Miami Milton Keynes Moscow Shanghai The Hague Valencia

FUTURELAB

Who We Are We are marketing strategy consultants that drive profit through customer-centricity & innovation.

At Futurelab, we believe that true shareholder value comes from growing revenues, rather than cutting costs.

That is why we want to be a source of new profit opportunity for your business.

20+ world-class associates acting as “one global team”

In-house desk research and trend analysis resources

International publications & thought leadership

We can support with: • • •

practices to grow customer equity marketing that makes money innovations that are competitive

We focus on the end result, not the report.

Like an architect, we add to your vision and – if required - manage your agencies and vendors towards the desired result.

Along the way, we challenge any convention, corporate habit or industry dogma that prevents you from doing what is right.

For further information about our services, please go to www.futurelab.net.

• Remarkable practice research • Social Media Analysis • Presentation Development • Innovation Studies • Trend Analysis • General Desk Research

• • • •

75K regular blog readers +100,000 readers of presentations & papers regular speaking & media appearances on a mission to change the marketing profession

A selection from over 100 credentials

25

FUTURELAB FUTURELAB

What We Do Like an architect, we add to the vision of our clients and manage their agencies and vendors towards the desired result.

Maximise the return on your marketing investments

• • • •

Media Optimisation Digital & Social Media Communication Strategy Advocacy/Word-of-Mouth

Connect to customers in a more profitable manner.

Innovate with meaning to the customer and the bottom line.

• • • •

ProfitScans Proposition Design Sustainability Crowdsourcing

• • • •

Retail/Shopper Marketing Customer Insights Customer Journey Customer Economics

FUTURELAB FUTURELAB

How We Are Different

Traditional business consultants that write thick reports and let you worry about it afterwards.

No-nonsense, strategic pragmatists that help you make bold strategic moves and stick around until the results are in.

Business Model

Business Model

•

Project assignments aimed at maximising short term revenues

•

Long term customer relationship mindset

•

Extensive use of juniors

•

•

Leveraging same (secret) knowledge over various clients

Seasoned expert teams for client assisgnments, juniors for back office work

•

Mix creative & analytics with common business sense

•

Open to (partially) result based compensation for LT-contracts

•

High analytics/low creative

•

No vested interest in eventual business result

Creatively inspired vendors and advisors who seek peer recognition, awards and maintaining a status quo in the industry.

Business Model •

Campaign mindset aimed at maximising short term profit

•

Locked-in to industry set ways of working

•

Premium on creativity over business results (low analytics)

•

No vested interest in eventual business result

FUTURELAB

What We Do We help businesses identify new profit opportunities.

Some questions we (almost) always ask

For this we always start from the customer’s perspective and look at ways to become more relevant, engaging or reputable.

In our experience, this approach typically leads for clear opportunities to monetize the existing reputation of a business, and develop opportunities for future growth.

$

•

Which are the steps in the customer journey (from the customer perspective)?

•

What are the choice drivers that make people move from one step to the next?

•

Which underlying rational/emotional insights need to be taken into account?

•

Who are the influencers that matter, how important are they and what do they think?

•

When, how and where is the best moment to influence customer behaviour?

While our services takes us to every area of the marketing mix, in this document we focus on four which we believe may be of interest/relevance.

Digital & Social

Media Optimisation

Retail

Innovation

28

FUTURELAB

Digital/Social

Our Capabilities

We make sure digital/social “works” for your brand.

We help you formulate “what great looks like” We work with your agencies, vendors and teams to “make great a reality” Futurelab ‘s digital associates have a track record in international digital at both senior and operational levels.

Their assignments have involved complex user engagement programs for companies ranging from FMCG to research & consultancy, implemented efficiency award winning interactive campaigns, optimized region level interactive marketing strategies and launched large-scale ecommerce initiatives.

All to say, that when we propose solutions, they are designed by interactive specialists for your interactive reality.

Some brands our associates have helped in building digital relationships:

Research • Cool hunting • Influencer profiling • Online reputation scoring • Online reputation indicators • Influencer Mapping & profiling • Usability assessment Engagement • On & off-site user engagement • User journey strategy • Social media strategy • Advergaming strategy • Customer advocacy • User relationship management Evolution • Digital spokesperson identification & training • Digital relationship consultancy • Digital crisis management • Content management Monitoring • Social media tracking • Brand alerts • Periodical reports Monetization • Revenue modeling • ROI analysis for digital initiatives • Opportunity identification • Partnership brokerage 29

FUTURELAB

Media Optimisation

Our Capabilities

We help you to increase the return on your media spend

MediaScan • Effectiveness analysis • Efficiency analysis • Cost & quality performance benchmarking • Opportunity identification

We ensure your various media & agency partners deliver what they should We identify underperforming media and help you focus on those with highest ROI

Futurelab ‘s media associates are senior level experts which have collectively influenced over ! 10 billion in budgets on a global scale.

Are billboards a waste of money?

Did you pay a fair price?

In this, they have built a track record of ensuring savings and adding value for a host of international blue-chip advertisers.

Today, we deliver media management programmes through a network of over 40 independent media consultancies spread across 4 continents.

Some brands our associates assisted in media matters:

Media Strategy • Customer Centric Media Modeling • Transmedia concept development • Media integration planning • Creative & business strategy integration • Commercial impact forecasting Budget optimisation • Rightsizing of media budgets • Intelligent budget reduction • Optimising budget allocation Agency Management • Selection (& transition) • Briefings (creative & media) • Contract & fee negotiations • Performance Related Incentive Programmes • Agency capability audits and enhancement (processes & skills) Compliance and transparency • Investigation of current compliance levels • Recuperation of agency volume bonuses • Invoice auditing establishing debts/credits • Rightsizing of agency FTE allocation • General media auditing 30

FUTURELAB

Retail We help maximise the return per customer and square meter.

We help you formulate “what great looks like” We work with your agencies, vendors and teams to “make great a reality”

Futurelab ‘s retail associates have a track record in international retail at both senior and operational levels.

Our associates have operated stores from Ireland to Kazachstan, implemented global visual merchandising programmes, optimised retail marketing programmes and launched large-scale e-commerce initiatives.

All to say, that when we propose solutions, they are designed by retailers for your retail reality.

Some brands our associates have helped on retail & customer matters:

Our Capabilities Retail Strategy • Strategic planning • E-commerce integration • Customer journey mapping • Shopper insight research • Roll-out planning Retail Development • Concept development • Retail innovation services • Customer centric retail design • Flagship development • Brand/Format integration Retail Operations • Space optimisation • Retail Presence Audits • People alignment • Visual Merchandising Services • Staff Training services Buying and Merchandising • Merchandise mix optimisation • Retail sales forecasting • Marketing initiative impact analysis • Upsell & product affinity planning Retail Marketing • Retail marketing planning • Agency selection, briefing & management • Multi-channel traffic generation • Shopper activation • Loyalty and word-of-mouth programmes • Narrowcasting implementation 31

FUTURELAB

Innovation We identify new profit opportunities for your business

Our Capabilities Innovation Methods • Creative Deconstruction • Innovation Landscaping •

We provide inspiration to your teams We identify opportunities to enhance your business and reshape your industry

Futurelab’s ProfitScan brings a fresh eye to your business, products and markets. Help you short-cut your innovation efforts.

Using your existing pipeline & our own resources we deliver 10-20 new profit opportunities in a timespan of a week. Some will have a small impact. Some will reshape the foundations of your industry.

If you are truly committed, you can then be up and running in months, perhaps even weeks.

...

Desk Research • Trend Analysis • Best practice reviews • Competitive Intelligence

Inspiration Days

Corporate Thinktank • ...

Some brands our associates have helped on profitscans matters:

Logos of sanoma, ispa, heineken, Teleatlas ... And other profitscan clients

Profitscan • ...

32