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Copyright © 2004 Information Resources, Inc. Confidential and proprietary. Expanded Category Management The Whole Store(y) February 2005.

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Presentation on theme: "Copyright © 2004 Information Resources, Inc. Confidential and proprietary. Expanded Category Management The Whole Store(y) February 2005."— Presentation transcript:

1 Copyright © 2004 Information Resources, Inc. Confidential and proprietary. Expanded Category Management The Whole Store(y) February 2005

2 Copyright © 2005 Information Resources, Inc. Confidential and proprietary. 2 Objective Understanding & addressing consumers needs with regard to health and wellness is the key to achieving success. Consumer Healthy Living Solutions UNDERSTANDING consumer segmentation FOCUSING on consumer management of conditions LEVERAGING consumer connections MEASURING consumer attitudes and satisfaction

3 Copyright © 2005 Information Resources, Inc. Confidential and proprietary. 3 The Healthcare Market is a Complex Interaction of Product Categories and Distribution Channels

4 Copyright © 2005 Information Resources, Inc. Confidential and proprietary. 4 RxPulse Provides Insights to Business Issues Rx Pharma Wellness Retail OTC / CPG & Healthcare New treatment methods (switches) Dual treatment / Non treatment New Product Innovation Consumer front-end/pharmacy habits Consumer loyalty & leakage Consumer behavior & opinions Consumer profiles & health concerns Patient level behavior & attitudes Complete competitive view of patient Evaluation of DTC Advertising

5 Copyright © 2005 Information Resources, Inc. Confidential and proprietary. 5 Identify the most compelling positioning with consumers Improve shopper loyalty and prevent shopper leakage Understand and influence in-store shopping behavior Integrate the front-end and pharmacy more effectively IRI Consumer Insights Address Key Challenges Facing the Retail Industry Today Drive Total Sales

6 Copyright © 2005 Information Resources, Inc. Confidential and proprietary. 6 You need a full understanding of consumers choices (Rx, CPG, OTC) to successfully grow your business A Consumer Centric Approach Expanded Category Management Where Balance is Key 1 2 3 1.Retail: Pharmacy PLUS Rest of Store 2.Manufacturer: Categories & Brands mean lifestyle & total health/wellness control by consumers 3.Consumers/Patients/Customers: Looking more than ever to take control and feel valued

7 Copyright © 2005 Information Resources, Inc. Confidential and proprietary. 7 Identify high value conditions Identify Shoppers Prescription/CPG Connector Products Develop comprehensive total store program Establish test metrics Launch, measure, evaluate and refine Expanded Category Management Leveraging the Connection Between Pharmacy & the Whole Store Step by Step

8 Copyright © 2005 Information Resources, Inc. Confidential and proprietary. 8 Certain medical conditions are more lucrative to the front-end than others $500Billion+ Allergies Infections Heartburn / Gastro Reflux $44 Billion $37 Billion $21 Billion Front End Store Front End Buying Power Energize OTC by Leveraging the Lucrative Rx Customer Source: IRI RxPulse Panel & IRI Consumer Network Panel; 26 weeks Example

9 Copyright © 2005 Information Resources, Inc. Confidential and proprietary. 9 RxPulse Net Leverage the Pharmacy to drive total store sales Gain in-depth knowledge of prescription customers Understand competitive market share Make the connection between Pharmacy and the rest of the store Expanded Category Management Applications A web-based reporting tool with flexible access to IRIs RxPulse & Consumer Network data

10 Copyright © 2005 Information Resources, Inc. Confidential and proprietary. 10

11 Copyright © 2005 Information Resources, Inc. Confidential and proprietary. 11 Transaction Assessment - Competitive View Where are customers filling their prescriptions? Key Business Decisions: Understand change in outlet purchase behavior Understand banner share of Total Rx Transactions Understand banner share of ailments

12 Copyright © 2005 Information Resources, Inc. Confidential and proprietary. 12 Rx Transactions by Outlet and Banners Total U.S. Transaction Assessment Drug is the primary channel for prescriptions to be filled with a 47% share Drug (-9%) Mass (+2%) Food (-9%) Other (-10%) Club (+5%) Direct Mail (+24%) *Other = Dr Office & Hospital Pharmacy Source: IRI RxPulse Panel 26 Weeks Targets share of Rx filled within Mass is showing strong growth Example

13 Copyright © 2005 Information Resources, Inc. Confidential and proprietary. 13 Drug COT is not capturing its fair share of consumers filling Heart Health Rx Drug (+2%) Mass (+13%) Food Other Club Direct Mail *Other = Dr Office & Hospital Pharmacy Source: IRI RxPulse Panel 26 Weeks Heart Health Rx Transactions by Outlet and Banners Total U.S. Transaction Assessment Example

14 Copyright © 2005 Information Resources, Inc. Confidential and proprietary. 14 Source: IRI RxPulse Panel; 26 weeks 91% Shop Acct A With Rx Need 9% Shop Acct A No Rx Need 32% Fill Rx At Acct A 68% Fill Rx Elsewhere 61% of Rx Transactions at Acct A 39% of Rx Transactions in Other Chains 100% of Rx Transactions in Other Chains Buyer ConversionLeakage 1% of Rx filled at Acct E 2% of Rx filled at Acct C 4% of Rx filled at Acct E 8% of Rx filled at Acct C 2% of Rx filled at Acct T 3% of Rx filled at Acct W 6% of Rx filled at Acct W 5% of Rx filled at Acct T 13% of Rx filled at Direct Mail 45% Acct A Total US Penetration 9% of Rx filled at Direct Mail Where are Pharmacy Sales Lost? Total U.S. Buyer Tree Example

15 Copyright © 2005 Information Resources, Inc. Confidential and proprietary. 15 Front-End Consumer Spending by Category and Ailment Pharmacy / Front-of-the-Store Key Business Decisions: Identify category connectors Identify RX and OTC usage Identify cross-promotional partners

16 Copyright © 2005 Information Resources, Inc. Confidential and proprietary. 16 Source: IRI RxPulse Panel & IRI Consumer Network Panel; 26 Weeks Consumers filling Rx outside your account, take their front-end spending outside your chain as well Integrate the Pharmacy and Front-End More Effectively Example

17 Copyright © 2005 Information Resources, Inc. Confidential and proprietary. 17 # of OTC Shopping Trips and Market Basket $ Among Heart Health Rx-Shoppers $22.98 $28.86 $29.35 % $ on Deal 32.8% 32.2% 38.7% Retailer A Rx-Fillers make more frequent OTC purchases, however their basket spend is smaller than the average drug store shopper Source: IRI RxPulse Panel & IRI Consumer Network Panel; 52 Weeks Example

18 Copyright © 2005 Information Resources, Inc. Confidential and proprietary. 18 1.Increase the frequency of front-end purchases among shoppers who are filling their heart health prescriptions elsewhere. 1,555,259 HHs X $29.35 average market basket per trip X 1.0 incremental OTC shopping trips per year $45,646,852 annually 2.Increase the market basket of front-end purchases among shoppers who are filling their heart health prescriptions in the chain. 569,530 HHs X 6.1 OTC shopping trips per year X $5.88 incremental market basket $ per trip $20,427,902 annually Retailer Opportunity Source: IRI RxPulse Panel & IRI Consumer Network Panel; 52 Weeks Example

19 Copyright © 2005 Information Resources, Inc. Confidential and proprietary. 19 Purchase Behavior Where are customers filling their prescriptions? Key Business Decisions: What ailments are Rx Customers treating? How often are they filling their prescriptions, Days of Supply? Compare ailment incidence against Total US trends

20 Copyright © 2005 Information Resources, Inc. Confidential and proprietary. 20 Rx transactions – Index to Total scripts filled by ailment within Outlet Source: IRI RxPulse Panel; 26 Weeks Rx Filled - Fair Share By Ailment Identify Opportunities Greatest area of opportunity exists within the High Blood Pressure & Diabetes ailment classifications. Both of these ailments have high indexes for Account shoppers who buy their prescriptions elsewhere. Example

21 Copyright © 2005 Information Resources, Inc. Confidential and proprietary. 21 Contribution to Pharmacy Over Time vs. Competition Where are customers filling their prescriptions? Key Business Decisions: Assess Pharmacy programs over time Understand outlet/banner interactions over time Track impact of special programs on Retail over time

22 Copyright © 2005 Information Resources, Inc. Confidential and proprietary. 22 Heart Health Rx Transactions Share Trend – Total U.S. All Outlet Longitudinally Understand Competitions Impact on Your Business Transaction Trend Source: IRI RxPulse Panel; 104 weeks Did Drug Retailer A Implement a Heart Health Program? Example

23 Copyright © 2004 Information Resources, Inc. Confidential and proprietary. Switch Evaluation System Switch Monitor Rx to OTC Forecasting and Modeling Tool

24 Copyright © 2005 Information Resources, Inc. Confidential and proprietary. 24 Effective Switch Modeling Requires Understanding of Impact and Interaction of Multiple Variables Market Dynamics: Order of Entry Product Differentiation Brand Equity User Variables: Insurance coverage Individual Usage and Usage Rate Cross-Usage Demographics Medical Factors: Indication Dosage Prescribing Habits Emerging Rx Therapies But the impact of individual user variables has historically been either unavailable or available only through custom research…Until Now!!!

25 Copyright © 2004 Information Resources, Inc. Confidential and proprietary. February 2005 Planning for the Unplanned and Unprecedented: Switches, Withdrawals and Recalls A Boards Eye View

26 Copyright © 2004 Information Resources, Inc. Confidential and proprietary. Vioxx Omnibus Survey Understanding Consumers Attitudes and Behaviors following the Vioxx Recall

27 Copyright © 2005 Information Resources, Inc. Confidential and proprietary. 27 Project Scope and Background An Omnibus survey was fielded to understand consumers attitudes and behaviors following the September 30 th marketplace withdrawal of the Rx Arthritis drug Vioxx The survey was fielded November 10 th to December 1 st 2004 to individuals who treat for Pain. Questions inquiring about current usage refer to this time frame. The survey was mailed to panelists who, in the past six months, have used Vioxx, Celebrex and/or Bextra

28 Copyright © 2005 Information Resources, Inc. Confidential and proprietary. 28 What type of Pain do you Treat for? If you treat Arthritis with an Rx, what do you use? Source: IRI Vioxx Omnibus Survey 2004 While many respondents say they treat for multiple types of pain, 79% of those surveyed identified Arthritis as one of the ailments they seek relief for. Of those who treat for Arthritis, over half of them turn to Celebrex to alleviate their pain. Respondents Treating for Pain 516407250368 n = Example

29 Copyright © 2005 Information Resources, Inc. Confidential and proprietary. 29 % HH Buying –Time Series (Total Pain) Vioxx Withdrawn from Market Source: IRI RxPulse Panel & IRI Consumer Network Panel; 52 Weeks With the new surrounding Cox-2s, how will the rest of the market be affected? Example

30 Copyright © 2005 Information Resources, Inc. Confidential and proprietary. 30 % Households Buying Shift Vs. Year Ago Households*BextraCelebrexRx NSAIDTotal OTC Bextra-61%NA ^ +54%-13% CelebrexNA ^ -52%+47%+8% Vioxx+18%+107% +37% -2% * Households using listed Rx brand (rows) during pre-withdrawal period NA^ = sample not sufficient for release during one of the comparison time periods Arrows noted only for changes => +/-20% Source: IRI RxPulse Panel & IRI Consumer Network Panel; 4 weeks ending 1/23/05 vs. 1/25/04 Many patients have switched to Rx NSAIDs post Vioxx-withdrawal. Celebrex consumers are also turning to OTC to relieve their pain Example

31 Copyright © 2005 Information Resources, Inc. Confidential and proprietary. 31 Do You Know…. After the Vioxx withdrawal, what % of Rx users of Cox-s talked to their Doctors? A.45% B.38% C.17% What % of Arthritis Rx Treaters believe that Rx medicines are safe since the Vioxx withdrawal? A.23% B.85% C.60% Source: IRI Vioxx Omnibus Survey 2004 Example

32 Copyright © 2005 Information Resources, Inc. Confidential and proprietary. 32 For Information Contact Diane Nilsen 312-474-2598 diane.nilsen@infores.com Bob Doyle 312-474-2510 robert.doyle@infores.com Information Resources Healthcare Solutions Group


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