Making an aware diabetic a loyal drug store shopper

Drug Store News, Oct 20, 1997 by Rob Eder

It is difficult to consider a bright side to a chronic disease such as diabetes. How can one imagine a silver lining to an illness that exacts such a toll on those it strikes, perhaps robbing its afflicted of their sight or a lower extremity.

By focusing on diabetic care and the ancillary categories that support it, chain drug stands to improve the quality of--and in some cases, save--a great deal of lives. And, of course, chains stand to make a great deal of money as they target one of chain drug's best potential customers in an age when, unfortunately, more are sure to follow.

The market is ripe and has been for quite a while. Ninety percent of the 8 million diagnosed diabetic patients in the United States are afflicted with Type 2 diabetes, which typically strikes 40-somethings and is often brought on by obesity. Of course, baby boomers are aging, and Americans have long been known for a mid-life paunch, not to mention that, in general, a sweeping cross-section of the U.S. population fights the battle of the belly (some more passively than others).

Minorities seem to be disproportionately afflicted with diabetes, with the disease striking nearly 10 percent of Hispanics and African-Americans, and up to 50 percent of Native Americans. Moreover, offices of the National Institutes of Health estimate that another 8 million diabetics are currently walking around undiagnosed, posing significant health risks to themselves and, at the risk of sounding somewhat callous, perhaps doubling the size of the diabetic consumer population.

Make no mistake, chain drug is already well aware of the diabetic customer's overall contribution to total sales. The industry fully appreciates the value of the diabetic customer. The retailers and suppliers who have made diabetic care their business can recite the distinguishing characteristics of the diabetic consumer in their sleep. Generally speaking, these consumers shop chain drug twice as much as any other shopper, they spend twice as much per year and they make twice as many purchases per visit. Gladson and Associates Category Management Services pegs the average diabetic customer basket ring at about $2,500 a year for pharmacy-related items; the non-diabetic spends $1,200 on average.

Plotting a path to clearer cross-merchandising

Indeed, retailers have a keen sense of the value of driving the diabetic customer into the store, first and foremost to purchase the glucometers and test strips, insulin syringes and lancets central to managing the disease, and second, for the additional products that make living with the disease more manageable, such as foot and skin care items, as well as sugarfree OTCs and snack foods.

"The chains know that the diabetes customer is a big spender." said Robert Oringer, president of Can-Am Care Corp., a leading manufacturer of both branded and private-label diabetic care products. However, the question is how to make their store the brand of choice, the destination of choice for diabetic care?

"The first step was moving diabetic care out from behind the pharmacy counter--I don't think there are many chains that haven't already done this," Oringer said.

"As far as making the products visually available, they've done a pretty good job. And, they've developed a wonderful mix of products. But, in terms of capturing add-on sales, of cashing in on the cross-merchandising opportunities that exist, I don't think they've got it quite right yet. That's the challenge we're working with [retailers] on--getting the customer to those other products in the store."

Certainly, insofar as merchandising diabetic care is concerned, suppliers have been pretty good partners to chain drug. The diabetic care paradigm is rapidly shifting, and innovation in product offerings, as is the case with just about any category, leads the push. The emphasis continues to be on making the management of diabetes blend easier into the routine of day-to-day life; making the matter of compliance less invasive.

A new marketing approach

Focusing entirely on the home health care market, and anchored by a pharmacy, MedMax--which opened the first of its doors a little more than a year ago--has positioned itself away from the traditional drug class of trade by taking a fresh, new specialty superstore approach to marketing self care. Among its offerings are a full assortment of wheelchairs and departments flagged "healthy back" and "home medical equipment." So, it's unsurprising that such a retailer would devote as much as 24 feet to the diabetic care, with adjacencies to ancillary categories, such as foot care and wound care, that can run up to 48 feet.

But, MedMax's commitment to cross-merchandising diabetic care goes far beyond sheer square footage. The company has taken a great deal of care to understand the product needs of its diabetic customers, and that careful analysis manifests itself in its store design. MedMax's strategic adjacencies have put just about every product the diabetic customer requires in one part of the store, truly taking advantage of the additional sales that might otherwise have been lost if the customer was not so well reminded of his or her other category needs.