The Evolving Relationship Between Pharmacy and Patient 

The late ‘90s and early 2000s called for a resurgence in the market for one-stop shops that were properly curated to the consumer that walked the streets just outside their doors. It was a ‘warehouse’ of sorts that carried everyday essentials with large selections with many options to choose from, and even the little something extra you didn’t know you needed until you hit the cash register. The stores were carefully curated with bright lighting and dangling savings cards to make the consumer feel at ease through their shopping purchase. This includes popular names such as CVS, which in 1990 had just 750 pharmacy locations and now has more than 9,000 pharmacies worldwide including those found in Target. Other giants weren’t far behind with the rise of Rite Aid, Walgreens, and many others lining local streets. Today, these chains can be found on city street corners, in local neighborhoods, and everywhere in between.  

Along with this evolution said goodbye to the mom-and-pop pharmacies who just couldn’t compete. Small in square footage with minimal product, the allure of these bigger retailers and the cheaper pricing they provided was too great to handle. However, with this expansion over the last twenty years, major retailers failed to realize the consumer base in many of these neighborhoods. This led to a reduction in sales of CPG and OTC products, loss in revenue, and a rapid rate of stores closing at just over 7% per year for the last two years. This then left underserved neighborhoods without access and in need of travel to get their prescriptions.  

What has changed… 

Over the last five years major costs have been incurred by these retail chains. Several major retailers as a result of the opioid crisis were ordered to pay out over $13 billion dollars to resolve several state and local government lawsuits. Along with this came soaring inflation rates, the highest we have seen in over forty years at 9.1% rapidly slowing the purchasing of OTC and CPG items by everyday consumers who could feel the tightening of their wallets, especially in lower income neighborhoods. Here comes in the ‘straight-forward’ business decision. Stores that were hurting the bottom line due to the reduction in sales and basket size are now going to be closed. By the end of 2024, CVS will have closed more than 900 stores while Walgreens will have a total store closure just north of 4%, most of which come in underserved communities. Without the proper understanding of the consumer base in these areas, large footprint stores with high rental rates can’t sustain and those communities are left with the need to travel for prescriptions. 

Other major challenges… 

Another major story in the news has been the walkout of pharmacists from major retail chains. While this is told as a wage concern, there is a much larger concern here. As retail pharmacies require additional services to be brought to their customers (Covid vaccine administration, flu shots), they are not increasing staffing needs. This is leading to increasing rates of burnout from pharmacists who are shuffling back and forth to fill prescriptions while still administering services on the floor. This all comes with a decrease in stores hours and minimum script fulfillment quotas that need to be met. This has led to major store walkouts and many individuals without access to their medications. This was yet another oversight of some of these major retailers who will now incur the cost of hiring additional staff members, increased wages, and a much larger overhead. With a similar train of thought to the problems provided above regarding size of store, etc. this may lead to additional stores closing furthering the problem for the patient population.  

Is there an answer… 

Digital ecommerce programs are going to close the gap and create a bridge for underserved individuals. They are by no means going to replace brick and mortar store locations or a consumer’s desire for in person contact. However, there is no need to have a mindset for one or the other. These two are complimentary, omni-channel commerce. In areas where there are major store closings, retailers are showing that they are not going to leave people without a means to get their prescriptions. Opportunities for OOH, programmatic, search, social, and more are becoming available in the space to properly communicate with patients. Major retailers such as Amazon are opening digital pharmacies, packing and fulfillment programs, and fast shipping to help support underserved communities. This trend has continued across other big names such as Walmart, Walgreens, and CVS hoping to find new means of creating awareness, delivering insights and information, and hopefully efficiently providing medications to those who need them. This is just scratching the surface as we have seen advancements from organizations like Uber’s Uber Health providing rides to patients to get to doctor’s appointments for those that can’t drive themselves and lack options in close proximity to their homes. Partnership is going to be key to continuing to deliver new means for patients to learn about new medications, deliver timely and effective marketing, and help patients to adhere to the products they need.  

Going “Phygital”… 

CMI Media Group has developed strong, strategic partnerships with these major retailers over the last two years. We have pushed for new marketing opportunities, ways to target, and additional measurement options while remaining compliant and keeping patient PI confidential. Many retailers listed as well as several others have even come to CMI Media Group for insight and help in where we see the landscape shifting. Our focus is to deliver omni-dynamic programs for our clients that provide connection from the physical store location to a digital experience and vice versa. This is a term we are calling going ‘Phygital’. As we continue forward, our Point of Purchase department’s key areas of focus will include contextual shopping in store and online, delivering messaging to consumers on retailer websites, and cross channel connection opportunities from audio, tv, and more. With longstanding relationships with major retailers, we will continue to bring these innovative, first-to-market opportunities to our clients and help to close the gap between their products and the patients that need them. 

What to keep your eye on… 

There are many advancements on the horizon. They come in all shapes and sizes and are not as apparent as you may think. Pharmaceuticals will take on common retail thought leadership focused on the patient. These advancements will include BOPIS (buy online, pick up in store), faster delivery (drones, two-day shipping), and cost savings programs (existing, but will become more readily available and transparent to the patient). These steps forward will require a heavy focus on supply chain management, proper merchandising, and a deeper focus on margin requirements for manufacturers. By working closely with our partners, CMI Media Group is able to uncover and influence new opportunities for brands to reach their audiences in these emerging spaces.