Convenient all-in-one service will be key to winning H&BC market - health and beauty care - Retailing for the New Millenium

Discount Store News, Dec 7, 1992 by Jill Lettich

By the year 2000, we probably will not yet have reached the point where someone can wave a "Star Trek"-like hand-held computer over a person and be able to diagnose and cure their ills in a few minutes. But that kind of all-in-one, immediate service is the direction of future health care options in both medical practitioning and in pharmaceutical and H&BC retailing.

Already, on a less high-tech scale, specialty formats such as deep discount drug stores, and in-store services such as optical departments are growing successfully by giving consumers the convenience and pricing that they require.

The channels of distribution are changing rapidly in the field of health & beauty care. Sales of H&BC products have traditionally been divided among supermarkets, drug chains and mass merchandisers, but the number of players has increased with the emergence of other types of retail outlets--even if the playing field (i.e., the potential number of customers) has not.

In the year 2000, warehouse clubs, H&BC-based superstores and deep discount drug stores will surely own a bigger piece of the H&BC market. The keys to capturing the market will be increasingly more complicated. If they all have the basic products, it will be price, ambience, service, location and store design that will have an impact on consumers' final shopping decisions. In addition, specialized stores will have to convince shoppers that they can cross-shop in those stores, as well.

For instance, deep discount drug stores seem to be a natural in today's retail climate. However, a report by MPSI Retail Systems, Minneapolis, a research firm, noted that shoppers spend money frequently on H&BC items at deep discounters, but indicate that they still get their prescriptions filled at conventional drug stores.

Discount superstores with pharmacies will have a similar challenge in convincing shoppers that they are an effective and well-priced source of pharmaceutical products as well as food and general merchandise.

The challenge is important especially due to alternative H&BC outlets that are likely to crop up in the coming years.

According to Carol Farmer, president, Carol Farmer Associates, traditional drug stores "will be vulnerable to mail order and drive-through prescription sales." That is likely to further pressure more discounters to counter-offer well-serviced pharmacies in all their stores in addition to fully staff optical centers. Audiology centers, dental care departments and even serviced nutritional centers may not be too far behind.

Faith Popcorn, author of The Popcorn Report, also expects home delivery to be an increasingly important retail service for health items in the coming decades.

These changes are a result of evolving retail trends that are already in motion and of changing consumer lifestyles and demographics.

The first wave of baby boomers (76 million strong and born in 1946) turned 46 in 1992 and view health care differently than the generation before them.

Many of them are beginning to have vision problems, but buy glasses as a fashion accessory as much as they do as a necessity.

This group is very health conscious (about 27.3% belong to a health club, according to Simmons Market Research) and they are also very computer literate, creating some interesting marketing possibilities.

Medical and pharmaceutical reference software is already available to professionals. Franklin Computer even currently markets a hand-held reference notebook computer to doctors.

More basic software, even in-store, that helps to explain basic over-the-counter pharmaceuticals, may attract a busy, "get me the answer quick" consumer.

This kind of information on OTC drugs is especially vital as the Food and Drug Administration continues to speed up its approval process of both prescription and non-prescription medications and more and more drugs flood the marketplace.

The all-in-one shopping experience that is being created for the H&BC consumer also creates many possibilities for cross-merchandising.

There is a growing interest in alternative medicines. Natural vitamins and foods, as well as food sections for special dietary needs (low-salt, low-fat) can make effective adjacencies. Already, diet drinks and snacks hug the fence between food and H&BC in many retail outlets.

The same concern for "natural" food products has already made huge inroads in the beauty care area.

Entire store concepts have been created to service this market niche. Early examples include GNC food stores. Other examples in the beauty care area include the London-based Body Shop and the U.S.-based H2O Plus, another chain specializing in natural personal care products.

These concepts are finding their audience, but will have stiff competition as more discounters and other retail formats bring these specialized products to the mass market.

Brands such as Naturistics, Fruit of the Earth, Body Elements and Natruessence are already addressing these needs and have generous shelf space in discount stores.

The nature theme extends even further into packaging issues at retail. Colgate has already eliminated the cardboard packaging one some of its toothpaste products.