Cardinal Health focuses on front-end design to capture and keep new shoppers

Cardinal Health will introduce a number of new tools at this year’s Cardinal Health RBC that are designed to energize the front-end of an independent pharmacy’s footprint. Because one of the big challenges facing community pharmacy on the front-end is price perception, Cardinal Health is working with their supplier partners on temporary price reduction promotions and end-cap displays to increase consumer awareness around the complete value community pharmacists can bring to the market.



“Definitely, there’s a price perception challenge,” Sam Hoye, director of Consumer Health Marketing at Cardinal Health, told Drug Store News. “There’s a point of view that this is a small retailer; therefore, they are not going to be [price] competitive. We know for a fact that’s not always the case,” she said. “The other piece of this is having the right product — you’ve got to know what your shoppers are looking for.”



Independent pharmacy operators have already won the hearts and minds of their local community, Hoye said. So their ability to localize and have the kind of niche offerings that their national competitors struggle to get on the shelf should be a core competency for independents.



To boost the front-end further, Cardinal Health is in the process of eliminating that “conversion conundrum.”



“What we saw with retail independents is that they were disproportionately behind the national players in terms of having customers buying items on the front-end,” said Naomi Duvall, director of Category Management at Cardinal Health. Customers patronizing their independent pharmacy were making a bee-line for the back-bench without stopping to shop, she added. And that’s a problem.



“A customer makes 42 trips every year to buy OTC and beauty aids,” Duvall noted. “The average consumer is only coming into a pharmacy two times per year,” she said. “You want to build to that 42. That’s where that conversion conundrum comes into play. You want to earn their loyalty.”



To that end, the Cardinal Health team has developed a front-of-store package that independents can implement immediately upon returning from Cardinal Health RBC.



First, Cardinal Health invested in its private-label product development, growing its current offering of LEADER SKUs and adding health and beauty products to shelves in the coming year. “We’ve spent the last year reinvigorating this brand,” Hoye said. “People are going to be really excited to see the portfolio, how it’s growing and the profitability opportunities.”



Second, Cardinal Health’s front-end team, in conjunction with supplier partners, pieced together a series of promotions and end-cap displays designed to attract consumer attention. Patients visiting their neighborhood independent need to be “wow’d” by what they see on shelf, Hoye suggested. “That visual impression is critically important,” Hoye said. “The shelf is the moment of truth. A well-stocked shelf is important in creating that experience.”



The reality an independent operator faces, however, is limited inventory capacity — both in the dollar-value of the inventory stocked in the store, as well as limited storage capacity beyond front-end shelves and counter space. Hoye suggested a “one to show, and one to go” philosophy that helps reduce the potential for an out-of-stock placement without straining resources.



The end-cap program being rolled out by Cardinal Health features both private label and national brand and is turnkey, Hoye added. “Independents work from a very lean operation [viewpoint], and require solutions that are plug-and-play,” Hoye said. “They also need to make a visual impact to resonate with the shopper and help reset that shopper’s price perception.”



Finally, Cardinal Health is in the process of launching a new portfolio of nationally-known homeopathic solutions, making a direct appeal to that niche customer in search of more natural health options.



The new planogram creates a homeopathic destination center that’s replicative of the kind of brands customers might find at Whole Foods. “Our approach to get [independents] started is, to create a section in the store that stands out [as compared with] what you might see in the mass segment,” Hoye said. In this way, independents are offering their consumers a merchandising experience they won’t find at other retailers.