Drugstore P-O-P: A Dose of Convenience

Drugstores have become modern hybrids. While pharmacy and OTC drug products have always been part of the blend, the rest of the product mix has undergone steady evolution since pharmacies first started to sell non-prescription drugs and personal care items. Today, typical drugstores combine some of the quick, "grab-and-go" appeal of convenience stores with the more comprehensive product assortment available at larger retailers. The relatively small footprint of most drugstores and the high number of SKUs combine to make competition for display space fierce.The fact that drugstores have a lot more to offer is something that Deerfield, Ill.-based Walgreens is trying to get across to consumers. The company recently announced a new initiative to focus its advertising efforts at the front of its stores. "We're looking at the front of the store and positioning it to showcase why people who don't use Walgreens should use Walgreens," says Craig Sinclair, vice president of advertising. "We also want to show Walgreens customers how they might use the store a little bit more to their advantage."Sinclair says that focusing on the front of the store is a natural evolution in the development of the chain. When Walgreens stores first opened, the company defined itself as a leader in pharmacy, he says. The next development was positioning the company as a leader in photofinishing. Now the company wants to promote its general merchandise."We carry a lot of different categories that you might not realize we carry," Sinclair explains. "If you're on your way to a meeting and you get a run in your pantyhose, we can solve that problem for you. If you just found out that you don't have any milk for your kid's breakfast and it is 11 at night, Walgreens is a great place to pick up milk and, hopefully, a few other things. If your kid didn't tell you about a class project until the night before, we've got posterboard and markers and that sort of thing."This problem-solving philosophy is reflected in the companys new marketing campaign, "That's Life. This is Walgreens." The campaign is being featured in TV commercials and on in-store P-O-P materials. The commercials show life in a fictional town called "Perfect" where citizens never need the convenience of a drugstore. "In Perfect, we make up all of these unreasonable scenarios where every camera always has film in it. Socks always come out of the dryer in pairs. Refrigerators are always stocked with milk. And kids always tell their parents about assignments two weeks in advance," Sinclair says. "Unfortunately, none of us live close to Perfect, which is why we have Walgreens."The creative behind the program lends itself more toward television since it is trying to attract new consumers to Walgreens stores, Sinclair says. However, the company also wants to change the way that its current customers think of the store. As a result, in-store posters are being used to draw attention to general merchandise categories.Clean FloorsSinclair says Walgreens' new approach to the front of its stores doesn't change the way the company deals with manufacturer-supplied P-O-P, and most manufacturers and drugstore retailers are quick to point out that many stores have instituted strict clean floor policies. However, most also admit that the enforcement of these policies is decided on a case-by-case basis. Sinclair agrees that clean floor policies are the trend of the moment and probably for the foreseeable future, but he doesn't definitively say no to any program."We consider anything," he says. "We're out of space for floor displays so we don't use those, generally speaking. Any of the other display options depend on the situation. In some cases, well take a stock program that every other retailer in the world is taking. In other situations, we want to do something a little bigger and better."Bob DeLorenzo, vice president, account development for The Gillette Co., Boston, agrees that drugstore retailers are always open to listening to new ideas, although much of their decision-making is determined by their future store design plans. "So much is driven by their store prototype -- either the current prototype or the future prototype, where they may be looking to change display or fixture sizes," DeLorenzo says. "They might also want to change their approach to endcap displays. They will usually come back to us with specs that they'd like us to follow."DeLorenzo says the best opportunities for display placement coincide with new product introductions. "That is certainly the lifeblood of our business," he says. "There are great opportunities there for retailers, and I think they are more willing to go with the manufacturer's decision on what the initial message to the consumer should be and what is the best way to introduce consumers to the package and the product."For the company's launch of its Venus shaving product for women, DeLorenzo says that drugstore retailers were very receptive to introductory displays. In order to effectively convey the Venus message to female consumers, DeLorenzo asked drugstores to use floor displays and wing displays. "They were very willing to support us on that and we had a lot of success," he says.Robert Werner, director, retail merchandising group for Revlon, N.Y., agrees that new product introductions present a good opportunity to merchandise in drugstores. The company produces a variety of different vacuum-formed displays each year to support new color introductions as well as existing products. These displays are designed to be placed on shelves or countertops and remain in stores for a few months.Currently, much of Werner's time is spent developing Revlon's new cosmetic wall. Dubbed "Her Wall," it will begin rolling out to drugstores and mass merchants later this spring. (It is the result of research and focus group studies that indicated that women would like a better, faster way to select the cosmetics best suited for them."For example, Revlon has many liquid make-ups," Werner says. "A woman wants to know which is best for her. We have little graphic panels that give her that information with the product being totally visible, not hidden behind bull-noses that were on some of our past shelving systems."According to Werner, the same components of the wall will be shipped to drugstores and mass merchants. The difference will be in the total size of the store set. Since drugstores tend to have less room, Werner says those configurations will exclude the lower selling products. "We prefer not to delete any of the graphics that go with these products because then it just becomes a crammed wall of product," he says. "That isn't good for the consumer. In the long run, that isn't good for the retailer either."Just What the Doctor OrderedLarry Bauer, director of merchandising and packaging development for Rayovac Corp., Madison, Wis., says the competition for display space is so fierce that manufacturers have to be more aware of the needs of drugstore retailers and consumers."If you go into your typical drugstore, there are so many products in such a limited amount of space," Bauer says. "You really have to have a terrific program to merit that kind of display opportunity."When Bauer begins to evaluate display opportunities in drugstores, he starts by examining five critical merchandising locations in stores -- the inline section; a secondary placement, such as a sidekick or an endcap; the checkout aisle; departmental placements, such as in pharmacy or photo processing; and the promotional/seasonal area."You really have to look at the account to see what opportunities exist within the size of the store and the store's characteristics," Bauer says. "Inline, we usually try to push our alkaline and rechargeable batteries. There are opportunities for hearing aid batteries in pharmacy."Bauer says drugstores are often receptive to multiple store placements because of the profit margin that batteries provide, their high-impulse nature and the ease with which they can be cross-merchandised in other locations with other products in the store.Currently, Bauer says the company is placing less P-O-P in stores than it has in the past. "It goes in waves," he says. "We're probably doing less right now because stores are getting mature in the battery merchandising area. They've already created permanent homes for our products."Still, Bauer says there are opportunities for programs that tie in to the back-to-school, holiday and seasonal/promotional periods. Also, he sometimes customizes displays for the pharmacy or photo processing areas of stores."In pharmacy, there is always an opportunity for a display because it is a destination in the store," Bauer says. "There are opportunities there for hearing aid batteries, for example. Sometimes, we'll customize displays for those locations."Small Footprint StoresBrian Hammock, director of marketing, consumer film products, Fuji Photo Film USA Inc., admits that getting secondary placements can be difficult. As a result, flexibility and a willingness to serve the needs of the store are a must."Because the store footprint is so small, secondary display space can be a lot more challenging," Hammock says. "We've tried to come up with both permanent and temporary displays that work within their footprint and clean floor policies. We customize special displays for the drug channel because they need smaller footprint displays or counter displays."Hammock says drugstores are unique to his business because they gravitate toward more permanent displays. Across all channels, Fuji produces far more corrugated displays than permanent ones, he says. Drugstores looking for points of differentiation from competitors and other channels tend to request permanent units.Customization is also an essential factor to getting compliance in stores, Hammock says. For example, last year the company ran a national promotion that included a sweepstakes to win a Volkswagen Beetle. That program was customized to specific accounts so that consumers would get locked into using a particular retailer for their film purchases and photofinishing. The customization included account-specific signage and posters. "It made it look like it was the retailer's own promotion," he says.In another promotion, Fuji partnered with Pepsi for a sweepstakes to win a family vacation to Busch Gardens or Sea World. "That promotion drove a lot of secondary displays," Hammock says. "I think that drugstores are looking for added value and points of difference versus other channels. If you can bring variety to them, I think they are very receptive to it."Tom Graves, director of marketing services for South Beach Beverage Co., Norwalk, Conn., has also had luck with co-branded programs. The company worked with Microsoft Corp. on an account-specific program for 119 Save-On Osco stores. The sweepstakes offered consumers an opportunity to win an Xbox gaming system. The promotion was supported with case cards and an enlarged shelf talker with take-one entry forms on it."Microsoft came to us because they were looking for a packaged goods brand that penetrated the target audience gamers," Graves says. "We were the best out there. We are the most authentic and well-received brand by men 16 to 24, who are the primary consumers of SoBe and video games. The program was very successful and well-received."Graves says in the past drugstores have trailed behind trends in the beverage category, following c-stores and supermarkets. The idea of immediate consumption beverages was first embraced and merchandised by c-stores. Supermarkets then followed suit and placed coolers near their checkouts. Now, drugstores are catching up by stocking non-carbonated, new age drinks such as SoBe, and allowing marketers to place coolers near checkout aisles."They are allowing proprietary coolers to be placed at the front of their stores in addition to the cold vaults that they already have," Graves says. "They are getting the consumer now in two locations -- once by the checkout and again by the cold vault."Pepsi's acquisition of SoBe is also helping to get branded coolers placed in chain drug accounts, Graves says. In fact, for the first time, Pepsi has made a commitment to a dedicated non-carbonated drink salesforce. The company's non-carbonated portfolio now includes SoBe, Amp, Aquafina, Nestea and a variety of juice products.Branded coolers aside, getting P-O-P placed in drugstores requires assertiveness, Graves says. "If you are selling in a program that has a display, a lot of times the program itself will come part and parcel with point-of-sale," he says. "Day in and day out, it is up to the initiative of the individual person delivering the stuff to get promotional materials put up. An aggressive, good salesperson will. They understand the value of point-of-sale."Drugstores are very much a market channel in flux, striving to redefine itself in the minds of consumers. Marketers who can merge their merchandising practices with the needs of the drugstore channel will find themselves in good health.Says Walgreens' Sinclair: "We realize that you aren't going to come here and spend $100 to stock up for the week. That is not what the store is about, but we can serve a very unique purpose."

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