Understanding Retail in 2024 

There is a massive collision about to take place that hasn’t been seen since the recession. This boom comes by way of inflation that continues to soar and the desire of Americans to continue to support the economy through discretionary spending. This combination always creates a volatile environment in retail. Generally, some businesses thrive, double down on product investment, shore up their pricing models, and enhance the store experience to generate foot traffic. Others see an exodus of employees, supply chain issues and an inability to replenish product fast enough, and a lack of effort in their store offering from layout, to signage, to customer service.  

Due to soaring prices of even the most common of products, eggs and milk, consumers are leaning towards cost savings programs, moving to discount or bargain shopping, and are saving their pennies. Even wealthier individuals are now shopping at Walmart and looking for good deals on essentials. Is this sustainable? The same holds true in pharma. Co-pay programs and patient assistance programs are more apparent now than ever. As patients focus on a hierarchy of needs, the extra dollar spent on grocery means one less to spend on medications. This can be seen through the drop in adherence by 20% after first fill (U.S. Pharmacist).  

There are 3 major trends in retail that need to be a focus, and they are right in front of our noses. 

1. Brand identity and brand awareness are far more impactful to the bottom line than ensuring a first day ROI. For organizations to be successful they must have a clear purpose, mission statement, and an identity that resonates with a core audience. By focusing on consumers that connect to the brand first, you will always have a base and steady stream of shoppers. Trying to boil the ocean and spread to too many cohorts of consumers will lead nowhere. Customers today want to believe in the brands that they wear and feel proud of the logo on their chest. Establish your brand identity in all places with consistency. This includes any organizational level marketing, branded storefronts, printed materials, and events.  

2. Don’t be afraid of the unknown. In a cookieless world where tracking becomes increasingly harder, don’t fear a shift in KPI focus. Marketing was founded on newspaper boys screaming headline titles in the streets for a nickel. Over the last hundred years, we have become spoiled being able to narrow down targeting to a 1:1 model. With the deprecation of cookies, look at your KPIs. ROI is no longer going to be the model or focus of the near future. Companies will need to move towards awareness tactics, focus on fulfillment, and will become dependent on Lifetime Value, Average Order Value, and Units per Transaction to tell their story of success. Remember that cost conscious consumers especially will not buy or invest immediately; there is a halo effect. Open the lookback window, look at the data, and look for incremental shopping that takes place. That will garner greater success than the ROI on a given Tuesday.  

3. Marketing is no longer about the product, it is about the lifestyle, the perceived benefit, and increasing the level of support for the patient. It is pharma’s own form of customer service. To be impactful in this space there are several key factors to consider: engage key opinion leaders to act as a voice, establish a niche target audience and expand from the core, consider obstacles and relieve them for the patient, and be everywhere all at once. Pharma customer service is a reaction to the patient with a need for detailed understanding of product to an afflicted audience. From there, clients need to alleviate barriers to entry such as the efficiency of getting product in hand, providing resources such as articles and blog posts, and to leverage a voice that is omni-dynamic. Pharma needs to get Phygital, a mix of digital offerings that keep products top of mind and in-store installations that drive connection between patient and HCP/pharmacist. This can be accomplished by amplification of channels such as social media and influencer, new areas of inventory through partnership (i.e. retail), and opening in-store inventory in and around the front of store and pharmacy directly facing patients/HCPs alike.  

Pharma is just starting to take strides in traditional retail. To implement the tactics above, there needs to be an inherent focus on the brand and the brand message. DSA campaigns prior to product launch should focus on delivering your brand identity and creating connection with a core audience afflicted by the given disease state. This will create a relationship that leads to the patient following your brand as new products are released. Second, be consistent with that message and carry it through your revenue model. Focus on first time patient acquisition and look to develop ways to retarget and continue the conversation so patients adhere to the prescriptions. There is a 40% drop off rate after first fill (Source: Cuverd), focus the conversation there and keep patients on track. Finally, keep the dialogue open. Be transparent in communication, resourceful, and go above and beyond to incorporate discounts and new technology. Be thoughtful in the approach and incorporate partnerships with retail chains providing easy access, connection to digital offerings that ship to home for those in pharmacy deserts, and enhance those capabilities through partnership with fulfillment services, retailer or third party.