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It’s a whole-store opportunity with retail clinics

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Clinic visits influence consumers' other in-store purchases

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Retail competition continues to be fierce. According to Nielsen’s forecast, dollar sales are projected to grow only 0.9% in 2017, meaning that retailers will continue to fight each other over a pie that isn’t growing as much as they’d like.

Therefore, they need to differentiate themselves from their competitors and gain more loyalty from their customers through a variety of different initiatives.

One area where many retailers — including drug chains — are differentiating themselves is by providing more health care services, like in-store clinics, for their customers. For good reason, too. Health and wellness has become a consumer priority, as they are looking for cost-effective and efficient ways to maintain their health.

Going to an in-store clinic provides both. But the real opportunity for retailers comes in understanding that those using retail clinics are also likely using the total store to manage their health and wellness. They buy food, personal care products and over-the-counter medications to satisfy their health needs. Therefore, as retailers continue to focus on health care services like retail clinics, understanding how these clinic interactions influence total store decision-making becomes a great opportunity to win with customers.

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Andrew Mandzy, Nielsen

Part of the reason that the number of retail clinics has continued to grow is that consumers are paying more for their health care. It’s rare for a day to pass without reading a news headline on rising health care costs, and Americans are feeling the pinch.

Fifty percent of consumers stated that their out-of-pocket costs for prescriptions increased within the last year, compared to only 30% in 2014. Doctor visits also caused pain to wallets, as 53% of consumers cited increased out-of-pocket costs versus 34% in 2014.

Factors like growing deductibles and out-of-pocket payments for doctor visits and prescriptions are inspiring consumers to take more control of their health care — especially when it comes to covering expenses. So they are making health care trade-offs.

Twenty-seven percent of consumers have asked a doctor or pharmacist about a lower-cost option, while 21% took a prescription less often than recommended, and 20% took an O-T-C medication before starting a recommended medication. These consumers are making near-term decisions based on economics that could have an impact on their long-term well-being.

The health care system is also feeling the pressure from overall increase in demand, and there is expected to be a lack of primary care physicians over the next decade. The driver behind this trend: the population continues to age and chronic diseases continue to increase.

cdr-filler-opinion-750Americans over 65 are expected to make up 24% of the population by 2050, up from 15% in 2015, according to the Population Division of the Census Bureau. And the World Health Organization states that by 2020 73% of deaths will be attributed to chronic diseases, compared to 60% back in 2001.

This brings us back to in-store retail clinics. Who is the retail clinic consumer?

According to a recent Nielsen study, almost 20% of consumers in the U.S. say they’ve visited a retail health clinic in the last 12 months. When we peel back a layer to see which consumers are more likely to visit a clinic, some interesting insights are revealed. Across the Millennial population (ages 18-34), 29% visited a retail clinic in the last year. That number was even higher for households with children and Hispanics, in which 29% and 35% of the population, respectively, visited a retail clinic.

Because different consumer groups utilize these clinics, understanding why they go to the clinics sheds some light to understanding their health needs. Across all the shoppers we surveyed, the top reason for visiting a retail clinic was for treatment (53%), followed by flu vaccines (35%). However, when looking more closely at specific demographics, the responses varied.

For example, shoppers with children in the household were more likely to visit the clinic for physicals and health counseling, but less likely to visit for a flu shot. Hispanic shoppers were less likely to go in for treatments, but more likely to visit for flu shots, health assessments and physicals. Millennials were less likely to visit a retail clinic for both of the top two reasons, but instead, were more likely to go for health screenings, assessments, physicals and health counseling.

Shoppers may be drawn to retail clinics for diverse reasons, but the need to manage health doesn’t stop at the clinic doors. So linking the interaction in the clinic with behavior in the rest of the store becomes an important aspect of gaining customer loyalty.

Our study discovered that 53% of adults who sought medical attention at a retail clinic were influenced to purchase a product after their interaction with the health care professional in the retail clinic, during or after that visit. Of all adults, 36% were influenced to purchase OTC medications, but that influence reaches beyond the health care aisle. Twenty-seven percent of shoppers were influenced to purchase personal care, 24% were influenced to make a food purchase, and 18% were influenced to purchase household cleaners because of their visit.

Based on this data, we see clear links to the rest of the store through the clinic visit.

Within the key demographic cohorts we identified, the retail clinic influence on purchases was even higher. Households with children (71%), Hispanics (86%) and Millennials (76%) all outpaced the average shopper in terms of purchases that were influenced by the clinic visit. At least 40% of households with children were influenced to purchase OTC medication and personal care. OTC (55%) and personal care (47%) were also highly influenced purchases amongst Hispanics.

Not to be outdone, Millennials were almost two times more likely than average to be influenced to purchase personal care, food and cleaning supplies following their retail clinic visit.

The bottom line: Health care has moved beyond the traditional doctor’s offices and hospitals, as consumers are now looking to retail clinics and pharmacists for solutions to their health needs. This presents a significant opportunity for retailers that offer health care services.

But most important to remember is that health and wellness is not a one-size-fits-all approach. Knowing your shoppers is key. Those that better understand the influence that trips to retail clinics have on additional in-store purchases will be best-positioned to capitalize on additional spend potential. Retailers also have an opportunity to increase customer spend and loyalty by leveraging retail clinics to influence what consumers purchase across the rest of the store during their visit.

Andrew Mandzy is director of strategic insights for health and wellness at Nielsen.


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