IRI's Sanders dives into changing retail and healthcare landscape

PHILADELPHIA — With declines in household incomes, a growing trend toward self-care among consumers, a changing demographic landscape and a greater emphasis on digital, the retail environment is undergoing significant change, but that change is spelling opportunities for smaller companies, according to Bob Sanders, EVP healthcare practice leader at IRI.

“We think, as Steve Martin said, you can be so good that they can’t ignore you. … There have been a lot of companies that have proven that out, and I will tell you increasingly more retailers are listening to not the big guys only,” Sanders told attendees of the Emerson Group Retail Industry Day during his presentation titled, “The Data is Just the Beginning: How Syndicated Data Creates Fertile Ground for Fresh Insights.”

Taking a deeper dive into the changes currently underway and outlining factors that smaller brands should keep top of mind, Sanders discussed the opportunities that exist within the OTC segment given the rise in self-care among consumers. In fact, data shows that 34% of consumers are doing more to self-treat common conditions, and 24% are doing more to self-treat chronic conditions.

“Consumers are trying to take better care of themselves. … As a result, that manifests itself into buying products to prevent disease, to keep out of the doctor’s office. ... People are doing more, which equates to greater household penetration, which equates to greater buying rate,” Sanders said.

The self-care trend is also helping fuel sales of food products with such attributes as lower sodium and lower carbohydrates as more consumers look to make lifestyle changes, Sanders noted.

Another factor to consider is the changing demographic landscape, driven by an aging population, millennials, minorities and low income. To better compete with the larger players who are looking for ways to expand their reach, Sanders said it is important for smaller companies to also think about targeting and segmentation.

“Do you see [segmentation and targeting] as an opportunity for your business?” Sanders asked attendees. “… Is it an opportunity for you guys to think differently about how you support your brands to really grow in the marketplace?”

Then there’s digital, which has greatly altered the path to purchase.

“The moment of truth is not at the shelf anymore. … There’s almost five times more paths that consumers can go via digital than traditional,” Sanders said.

Furthermore, the retail landscape continues to evolve as retailers, such as drug stores, increasingly implement in-store services.

“Drug retailers are smart. It’s a classic vertical integration play. They are going to surround that consumer/patient/shopper as much as they can, and if they can keep your attention and keep you in their stores, they are going to sell more stuff,” Sanders said. “So, how are you going to deal with the clinics? How are you going to market through an organization that is looking to do that?”