Walgreen’s morphs the niche they are in

Observation:  It is an interesting time to watch the nation’s largest drug store.  First, in a gutsy revolt against the healthcare system, the chain recently announced they would no longer accept prescription orders reimbursed by insurance-giant Express Scripts.  According to a recent video from supermarket expert Phil Lempert (click here to see that footage), that move could represent as many as 80 million prescriptions.  But that was a hit Walgreen’s was apparently willing to take, in defiance of the prescription management company’s effort to shrink the store’s profit margin on medications.

Another story—this one from Forbes—suggests that Walgreen’s is moving toward a business model that is much more consumer-centric, with product offerings that include a widely expanded beauty products, select groceries (including “wellness” organic foods), wine and cheese shops, and even coffee shops.  Click here to see that story.

Implications:   This is just my opinion, but I see this move as Walgreen’s decision to not let Express Scripts define the business they are in… and take control over that decision for themselves. 

What business are you in?  Is the answer to that question decided by a landlord, vendor or supplier?  Or is it defined by you and your customers?

Mike Anderson, for the Elm Street Economics consumer trends blog. A service of The Center for Sales Strategy, Inc.

Wal-Mart heading deeper into healthcare

Observation:  A story from USA Today indicates that the world’s largest retailer will make an effort to become the country’s largest primary healthcare provider.  Click here to see that story.

Implications:    Wal-Mart has been a disruptive force for many retailers and service providers… and it doesn’t look like the local doctor will be immune from a similar advance.  It will be interesting to see whether—or to what degree—consumers will trust a discounter to be their healthcare provider.  And whether consumers will want to go shopping where there are likely to be more sick people hanging around!

If you’re a health care provider, do you (or does your clinic) provide a demonstrated value that makes you worth more than the coming Wal-Mart alternative?

Mike Anderson, for the Elm Street Economics consumer trends blog. A service of The Center for Sales Strategy, Inc.

In the move from field or factory floor to the modern workstation, workers have gotten bigger

A workplace that is less physically demanding is now cited as another major contributor to obesity, according to this recent story from the New York Times.

Click to see the full story. 

Implications:  This NY Times article presents another angle of attack for anyone who is promoting health-consciousness, fitness, or weight-related products and services.  Remember that working out may not be about physique… but simply: staying healthy.

Mike Anderson, for the Elm Street Economics consumer trends blog. A service of The Center for Sales Strategy, Inc.

Consumers delay healthcare, insurers profit (for now)

Among the purchases that were deferred or delayed in response to the recession:  Medical Procedures, according to a recent story from the New York Times (click to link).

Implications:  The idea of pent-up demand seems easy to grasp for things like furniture, automobiles, clothing or appliances.  But healthcare is not immune, either; a fact that has brought profit to insurance companies, at least until such time as patients decide to get caught-up on their overdue procedures.

Mike Anderson, for the Elm Street Economics consumer trends blog. A service of The Center for Sales Strategy, Inc.

UPDATE: Healthcare changing channels

This site has offered a number of stories about the changing face of medicine (see the Healthcare set by clicking here).  Today’s Marketing Daily features a story about the growth of in-store clinical services at chains like Walgreen’s, CVS and Riteaid.  Click here to see the article.

Implications:  This is interesting not only to the (previous) providers of vaccines and other routine treatments.  It should be interesting, too, to those health care providers that rely on traditional physicians for their referrals. 

If you run a specialty orthopedics office, a strip-mall MRI facility or other specialized healthcare office… could your referrals be coming from a different source than they were five years ago?  If revenue is up more than 80% at the chain quick-clinics since 2005—as stated by the Marketing Daily story—one must assume that at least some diagnoses will increasingly occur outside the conventional doctor’s office.

Perhaps some specialty healthcare providers will have to take a more retail approach, with regard to patient marketing; doing so could help make-up for referrals which might not be as likely to travel through traditional channels.

Mike Anderson, for the Elm Street Economics consumer trends blog. A service of The Center for Sales Strategy, Inc.

UPDATE: Channel-shifting consumers

Speaking of channel-shifting (which I was just a few moments ago; see posting below), here’s a story from today’s Marketing Daily, which indicates that kiosks (Red Box, et al) have replaced retail as the primary destination for movie rentals. Click here to see the story.

Implications: Again, will your next competitive threat come from a competitor… or a new, unexpected adversary?

Mike Anderson

Channel-shifting consumers

The traditional place to buy groceries has long been a supermarket or grocery store. But for more and more consumers, groceries are an incidental item one picks up while shopping at the local discount or drug store. And those alternate outlets are adapting to these customer preferences, by adding aisles devoted to food.

See this recent story from the New York Times for a greater understanding of the matter (click to link).

Implications: Changing channels has hit a lot of sectors. Grocery stores now offer heat-to-complete and deli options that compete nicely with restaurants. Drug and discount stores now offer in-store clinics that compete nicely with the traditional doctor’s office. Banks sell insurance, and insurance agents sell investments.

Will your next competitive threat come from a competitor? Or a new, unexpected channel adversary?

Mike Anderson

Who are your new competitors?

This article is about groceries… but the implications behind it are likely to impact almost every category of business.

Building on the post from last Friday (see immediately below), I saw a Lempert Report newsletter last week that discussed the emerging channels that are competing for food dollars: Including drug stores and dollar stores. Click here to see the story.

Implications: If you run a supermarket, you have competition beyond the similar grocery store down the road. The lines that define a category are becoming blurred… as drug stores get into the grocery business, grocery stores get into the pharmacy business.

The bank on the corner doesn’t just compete with the bank down the street. They are seeing loans and deposits go to the credit union, car loans go to the car dealer, IRAs sold by the insurance company, 401k’s offered by the employer, and home improvement loans taken by the big home improvement retailer.

What business are you in? And who do you compete with… besides your competitors? Have you thought about ways to preserve share, among a diverse set of new competitors? What is driving this proliferation of options the consumer finds available? And how does your marketing message need to change to fit-in to this new landscape?

Mike Anderson

“Eewww! That person just left without washing their hands!”

A story in this morning’s New York Times confirms what you already knew: Lots of people are leaving the washroom without washing their hands. Click here to read the story.

Implications: The numbers are up, with regard to hand washing hygiene, since the recent H1N1 pandemic. But the world remains a less than perfectly hygienic place. And when reminded of this issue—many of us have observed people leaving a public restroom without washing their hands—it makes some people visibly uncomfortable. (Did you get the creeps just reading the NY Times story? Did your face involuntarily take-on a look of disgust?)
Could your company take advantage of this issue? Yes, I’m serious.

Perhaps the conventional restaurant could muster images of a buffet-style competitor, where customers are selecting their food choices from an open cafeteria-style serving table. The headline or voice-over says something like: “One in six people don’t wash their hands after visiting the restroom. I wonder which of these people has dirty hands.” The body copy of the ad would conclude: “[Conventional] restaurant. Where your food is only touched by professional, clean hands.”

Do you offer microbe-killing hand sanitizer at your bakery or produce counter? Are your products packaged in a more hygienic way?

How could you talk-up the concept of clean?

Mike Anderson

The changing face of New Age Seniors

This week, Marketing Daily ran a story about the new skin care line from Avon, intended to serve women over sixty. (Click here to read the full article.)

Implications: It seems to me that Avon is pretty smart… for taking the emphasis off “eliminating lines and wrinkles,” and instead, helping folks accept reality and age with beauty. We’ve offered a number of stories here on the topic of New Age Seniors and their generational economic impact. I'm sure the basis for those stories will continue to evolve!

As huge as the Baby Boomer cohort is, and as rapidly as this group is moving into and through their 60’s, I have to believe more companies will follow suit… and give-up “denial” as a brand strategy.

Mike Anderson

Common sense: Still the perfect gift

A story in today’s Marketing Daily indicates that during tough economic times, sales of food items has risen nearly 10%. Click here to read the story.

Implications: While many of the foods given as gifts could be classified as “specialty” or candy, the practice of using food or food baskets as a gift item seems to be pretty wide-spread. And why not: Everybody needs food, so it is a gift item that is likely to be used. (During a recession, especially, people seem to shy away from the purchase of things—including gifts—which might be seen as simply novel or unlikely to be used.)

Meanwhile, the sale of gift cards declined in 2009.

I understand the fall in gift card sales: If you’re a good shopper, you can find a sweater or power tool that looks like it cost much more than $40. If you buy a gift card for $40… it looks like $40 (except that the recipient has to spend it at a specific store or chain). The prior makes you appear more generous than the latter.

But this article left me thinking about the value of common sense necessities. Maybe some companies should be getting into the gift-card business. If food items are more popular during these kinds of economic times—everyone needs food—how about things like gasoline, automotive service, and restaurant gift cards?

Or, from your perspective—based on the business you’re in—maybe there are other forms of common-sense necessities that might make a great gift idea as we head toward the winter holiday season.

Now is a good time to be thinking of the possibilities.

Mike Anderson

Fitness centers, grocers and restaurateurs: Are you an alternative?

Today, the FDA decided to allow the prescription drug Avandia (GlaxoSmithKline) to stay on the market, according to this story a few minutes ago from the Washington Post.

Implications: This decision notwithstanding, more than a few people have been reminded that taking any medications can have side effects. Extensive news coverage—the kind you’ve seen this week—can compel people to eat smarter, exercise more consistently, and explore other lifestyle alternatives to help them stay healthy longer.

If you have a healthy (in this case, low-carb) menu at your restaurant, or a health foods section in your grocery store? Do you sell sporting goods or an exercise facility that helps people stay in shape? People who stay fit are often able to influence the extent to which they must rely on prescriptions to stay healthy. And when drugs are getting dramatic headlines, fitness can seem even more attractive and important.

It might be a good time to recognize this issue as a story that’s about healthcare alternatives… not just a drug.

Mike Anderson

CVS creates more competition for velocity (and fresh) foods

A recent Lempert Report newsletter led me to this story from the Cincinnati Enquirer website: CVS stores are adding salads and other fresh foods to their grocery line-up in urban stores.

Implications: Over the past few months, I’ve seen many articles suggesting that consumers were abandoning convenience in pursuit of saving money.

Does that mean people have more time on their hands than they used to? I don’t believe that for a minute.

Convenience is so important that the lines between different channels are becoming very blurred. Drug stores are now grocery stores. Grocery stores are now restaurants (via the deli, heat-to-complete, and grab-and-go foods).

What do customers want from the business you’re in? How fast do they want it? What other places might they find it? How will your company look different five years hence… than it did five years ago?

Mike Anderson

Reforming healthcare reform

Tomorrow (Monday) morning, President Obama will propose limits on rate increases from health insurance companies. That's according to a report this evening from the New York Times. At it might be attributed to the considerable press given to the issue during the past week.

A rate increase of 30% or more is enough to get anyone’s attention, when inflation is running somewhere under 3%. So it’s not surprising that Anthem was on the receiving end of media coverage last week, from the New York Times to ABC News.



Implications: Healthcare reform was already an ill-defined concept. It was popular, early-on, because voters were told simply that, “somebody is making too much money, and we’re going to find out who it is and put a stop to it.” But in recent months—not surprisingly—the issue has attracted more confusion rather than clarity… as differing interests seem to be positioning the matter in different ways. (Healthcare providers would like it to be an insurance and drug company issue… insurance providers would like all of this to be positioned as a care provider and pharmaceutical issue… and drug companies are quick to respond that strong profits fuel research and development of new and better treatments.)

Healthcare reform is not confusing because consumers are easily confused. It is confusing because many players have competing interests, and they all seem to be talking at once. From a trend-watching point-of-view, I’m wondering how long the consumer will be tolerant of all this noise.

Examples like this media story about Anthem seem to lay bare both the greed (record profits, accompanied by selective rate increases of nearly forty percent), as well as the complex challenges facing the insurance sector (like healthy patients canceling policies while sick patients tap insurance company resources). In either event, I’d watch for consumers to be increasingly hungry for point-blank stories that bring clarity to this issue, whether the target is drug companies, doctors, insurers… or politicians who attempt to profit from the dilemma in votes, while contributing little in the way of solutions.

Whether you are a healthcare provider, drug company, politician, or an insurance company...

Consider clarity.

Mike Anderson

Surviving the injury or disease, but not the debt

Playing into the hands of the health care debate this year has been the idea that many bankruptcy and foreclosure problems have not hit families because of the housing bubble, the recession or the volatile job market; the financial woes, for many folks, have been brought on by the cost of health care. For reference, see this story from the New York Times.

Implications: News stories like this, or the idea that many elected officials are granted health coverage that is beyond the reach of their constituents, help to elevate the perceived need for health care reform of some kind. I’m among those who are not sure what the right answer is. Only that the current system probably needs attention.

Politics aside, in what ways might the cost of health care impact the way you do business? Do you offer a product or service that might deliver healthy or preventive benefits? From safety devices to fitness centers—and of course, health providers and drug companies—the elevated profile of health care might influence many consumer decisions over the next few years.

In an era where much about the future of health care is unknown, consumers might be more likely to control what they can, in terms of diet, exercise, and self-health.

Mike Anderson

The Government, brought to you by...

I’m probably playing with fire by noting these two issues in a consumer trends forum like this… but what the heck. It’s the weekend, and I have to believe that, eventually, both of these issues will spark a consumer (voter) response.

Healthy debate? During the recent debate on health care reform, legislators on both sides of the issue have accepted what are essentially “scripts” from lobbyists, which are then used on the floor of congress during the course of debate. (Not to mention doling-out the same sound-bites for the benefit of eager television cameras.) In case you missed it, refer to this story from the New York Times.

Balance due. The U.S. government has been spending a lot of money over the past few years… and some significant payments are coming due. For reference on the matter, see this story from the NY Times. Since that money has to come from somewhere, consumers can expect either reductions in government services or increases in taxes. Both consumers and future candidates for public office will likely feel the tension, and sooner rather than later.

Implications: It is not my intent to take either side of either political issue. But coverage of both matters is likely to continue, if not expand… and the impact of both issues will likely draw the attention of the consumers you serve.

Interests on either side of the health care debate are doing what they can to influence the outcome (private sector stakeholders like drug companies, insurance companies and healthcare providers, as well as public sector stakeholders like government agencies, non-profit organizations, etc.) If and when voters learn that reform is more suited to special interests than the public well-being, this debate could take a nasty turn.

With regard to balances coming due on government debt, I’m curious. Whether you were for or against the investments of waging two wars, and regardless of how you feel about the various economic stimulus programs… you can expect sentiment to shift once bills begin to arrive for the spending that’s been going on for most of this decade.

We cannot know, with certainty and clarity, the impact of these issues on consumer spending. Only that there will be one.

Mike Anderson

UPDATE: Caught with their hands in the cookie jar?

On Tuesday, I shared a piece here about companies that are making adjustments now, in anticipation of new rules or legislation that could limit such actions later (see, "Grabbing cookies while the lid is off the jar," 11/17/09). As one example, I focused on pharmaceutical companies that were raising prices on prescription drugs... ahead of anticipated health care reform.

This morning, the New York Times ran a story indicating that a group of lawmakers have noticed what's going on (due to widespread media reports), and are launching an inquiry. (See the story here.)

Mike Anderson

Grabbing cookies while the lid is off the jar

Recently, I’ve noticed that two seemingly unrelated stories… that are very much alike.

First, much coverage has been given to the way some drug makers seem to be hiking prices now, fearing they won’t be able to later, if current healthcare reform efforts indeed become law. (See a version of the story that appeared in Raleigh’s News & Observer online.)

Second, a number of banks are hurrying to adjust the terms and rates for credit cards, as a seemingly pre-emptive move before new rules are put into place for the industry. (See a version of the story that appeared in the New York Times.)

Implications: When a company rushes to alter prices and terms—which might be prohibited or more difficult later—is essentially a way of circumventing anticipated regulation. It will be interesting to see whether and how consumers react. Will they see these price hikes as evidence that government should never get involved with the private sector? Or will they perceive these moves as evidence that the pricing strategies of these industries have been abusive, and their recent behaviors justify the anticipated new regulations?

What if you’re a pharmaceutical or credit card company that has not raised prices or changed terms? Will your organization continue to be clumped-in with the rest of the “bad guy” industry? Or is this an opportunity for your company to ride in with a white hat… ready to rescue the consumer?

What if you’re a pharmacy retailer—a drug store—who must break the news about price hikes to the consumer, over which you had no control? How will you explain the changes to customers, in a way that keeps you from bearing the brunt of their frustration?

Often, when circumstances that might change the status quo can be anticipated by the players involved, those players move to protect their status, before anyone changes their quo. Moves like this can spark some interesting consumer responses… so stay tuned.

Mike Anderson

The walking unwell

A rough economy can make some companies cut benefits… like the amount of paid sick leave their employees receive. A rough economy can also make people nervous about taking advantage of the paid sick leave they have earned; either because they don’t want to been seen as a slacker in an extremely competitive job market… or because they know times are tough and their company needs them.

I was inspired to think about this issue after reading a recent story in the New York Times which raised serious questions about the consequences (and complications) of people who work while sick… during the H1N1 pandemic (aka “swine flu”).

Implications: Employees who strive to courageously “play through the pain” for the good of themselves or their company could actually be doing far more harm than good. First of all, the H1N1 virus is to be taken seriously for your personal welfare. And you’re not doing the boss or the company any good by helping the virus spread farther and more quickly through the company workforce. So what are the alternatives?

I can’t believe that I haven’t seen this topic addressed, somehow, by companies who sell personal and home office equipment such as computers, networks, smart phones, etc. H1N1 presents a great argument in favor of telecommuting.

It has seemed particularly difficult, this year, to find out where and when vaccines are available (for both the seasonal and H1N1 inoculations). With so many pipelines of communication open these days (traditional media, the web, social networking), I cannot imagine why that information is so hard to come by… except that the vaccines are simply not available in enough locations. But one solution might be having the HR team at your company do some research about where employees can become protected against these illnesses, and post that information conspicuously throughout the workplace. (This isn’t too tough. Just visit Flu.gov.)

Another might be to partner with a local healthcare organization to bring the vaccines right to your workplace.

In an upcoming staff meeting, tell the workforce you take their well-being seriously… and you hope other workers will help pick up the slack, as you encourage sick employees to stay home.

Mike Anderson

Generally speaking, not enough physicians

A quick check of almost any medical school will lead you to one diagnosis: We’re headed toward a shortage of general practice physicians. A recent story from Kansas (Wichita Business Journal) indicates that 86% of medical students there plan to pursue a specialty… leaving just 14% who will be content to serve as “family doctors.” A similar story from San Jose (Silicon Valley/San Jose Business Journal) warns of the same condition: There are not enough new primary care candidates in the pipeline to meet the needs of an aging population. Partly because so many medical students are electing to pursue a specialty… but also due to the fact that more than a quarter of the country’s current primary care doctors are age 55 or older, which means they’re nearing retirement.

Implications: I’m not going to join the politically-charged debate on healthcare here. But I am going to point-out that health care, like any other field, is subject to the laws of supply and demand.

Most “specialty” care providers make more money than most general-practice physicians, which is one big reason why so many students head in that direction. According to the San Jose story, salaries for a new primary care doctor start at about $150,000 a year, compared with dermatologists who make about $300,000 and orthopedists making about $400,000.
According to a specialist I spoke with today, the hours are often more stable for a specialist, too. (For example, “I accept referral appointments on M-W-F, and I do surgeries on Tuesdays and Thursdays.”)

So, the American medical consumer should prepare to have increasing difficulty getting an appointment with the family doctor in the years to come. As that supply of physicians goes down, expect the prices for services rendered to go up, further aggravating an already complex set of healthcare cost issues.

If you’re in the business of fitness, self-health, or nutrition… are you positioned as an alternative to traditional office visits?

Mike Anderson

See also: “How the debate on health care might affect you,” 7/31/09.

See also: This story from CBS News, broadcast in late July, about the emerging primary care shortage.

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