Consumer Ailments = Retail Opportunities
By George Anderson
Targeting products to the health issues of consumers has opened up new business opportunities for food manufacturers and the retailers that sell their products.
An aging population with associated health problems, along with other factors such as obesity and diabetes that may have no age component, have caused an explosion of new products to hit the market. In some cases, repackaging on the part of manufacturers is used to identify items as appropriate for special dietary conditions.
Karen Merrill, a consumer from Barrington, N.H., had a heart attack and bypass surgery in 2002 and she appreciates when items that address her condition are pointed out to her.
Upon finding whole grain cereal on a “heart healthy” display in her supermarket, Ms. Merrill said, “I never would have known that this cereal existed if it wasn’t for that display. By coupling things like that, it introduces me to new things. Normally I would have been heading to the health food store to get it.”
Marketing foods as being good for a person’s health is nothing new as a report by the Associated Press points out, but it has become “increasingly sophisticated and ailment-specific” in recent years.
Hannaford Bros., according to the report, recently added gluten-free and dairy-free sections to all its stores and is considering rolling out additional sections that speak to specific conditions.
“It absolutely is a question of making a grocery store more user-friendly,” said Hannaford spokesperson Caren Epstein.
Moderator’s Comment: How will the increase in health conditions influence store layout, visual merchandising and other aspects of how the business
is run in the future? For example, will grocery stores need to dedicate more people to the sales floor to answer questions and offer other assistance to customers as the population
ages and more health issues arise?
One example of how stores are changing: We’ve gotten used to walking into many supermarkets and finding an in-store bank branch. In some places now, that
same space is being filled by walk-in medical clinics. –
George Anderson – Moderator
Far be it from me to attribute everything to the internet, but the transformational ability of average citizens to access information directly that heretofore was restricted to a limited population of specialists has changed the way we market. Consider the sweetener business: how long ago was saccharin deemed potentially dangerous? There was some PR to be sure, and warnings started appearing on labels, but it didn’t disappear, you didn’t see sugared sodas shouting “saccharin free!” Contrast that with hydrogenated oils/trans fats. Word of the potential dangers of trans-fats spread rapidly through the general population, and manufacturers were quick to market their products accordingly.
Health is the number one long-term boom category for retailing. Anything that can become health-related is more likely to be successful. The long-term growth of red wine sales, “doc-in-a-box,” organic foods, high-fiber, the huge number of new chain drugstore locations, tremendous ad spending on neutraceuticals and 3- and 4-figure exercise equipment all point in the same direction. Grocers can look beyond installing pharmacies and doc-in-a-box. They could offer professional dietician nutritional counseling, Weight Watcher programs, and healthy cooking classes and demos. They could show the combined fat, calories, vitamins, etc. totaled on every grocery receipt. They could use computer databases to offer coupons to frequent shoppers based on underrepresented food groups. They could even stop selling tobacco!
Retailers and manufacturers have been moving in this direction for years. The next set of changes will be in an “information/inspiration” format, meaning that retailers will both inform consumers looking for the knowledge on how to manage an existing condition as well as preventing. This information will come in many formats…from information products sold in stores, all the way to nutritionists and other personnel with assigned roles.
In addition, retailers will be able to inspire customers at point of sale to make the necessary changes in diet, health management and preventive health issues. Inspiration, too, will come in many formats and sometimes just having the knowledge to answer a customer question will provide the inspiration.
Ukrops won the Whole Health Enterprise Award this year for their work in this area.
There is one certainty in life: as we grow older, our bodies require more health-related product support. From exercise to food and nutrition, from pharmaceuticals to over-the-counter medications, our bodies will crave more and more to allow us to maintain a quality of life we are accustomed to.
So how can retailers cater to this market need? 1) Store design – retailers will need to create “safe and friendly” environments for seniors with the right products in the right place at the right time; 2) Multi-location merchandising – the future of category management is evolving toward “Disease State Category Management” or condition-specific health centers (however, they will not replace positioning of the same item in its home category); 3) Caregiver support – it should come as no surprise that Family Caregiving is a growth segment of the market – folks do not look forward to going into assisted living centers or nursing facilities – they want to maintain quality of life at home! (That’s one of the driving forces that led our company to acquire an entity focused on the family caregiver and their shopping needs.); 4) On-site clinics and professional staff – this is the future of healthcare retailing … and it’s here to stay.
I think timing is ideal to transform vanilla-looking retail formats into innovative health centers for consumers facing new conditions and demands on their lifestyles. And, based on our aging population and the creative developments by manufacturers, this is no longer an evolution, but rather a revolution. Smart retailers should be onboard this train – it’s moving quickly down the track!
I had always wondered who in the world required so many “call-outs” on packaging . . . and such detailed lists of ingredients!? That is until I had a near-fatal allergic reaction last month after 42 years without incident. All of a sudden, I was thrust into the world of label-readers and scrutinizers. What an eye-opener! During the two weeks when I was awaiting blood test results (when a long list of possible allergens were suspect), I quickly realized that Whole Foods was the easiest place to shop and they had my business exclusively. Everything clearly labeled, common allergens always front and center. Now I know the easily-avoided culprits. I hope I won’t need to add any health-related categories to my repertoire anytime soon but I’ve gained a new understanding of how important labeling and categorizing really are.
Marketing longer, healthier lives thru proper nutrition is a great strategy for upscale grocery to further differentiate itself and become a destination. Picture literature and/or discussion groups on the power of antioxidants to delay the onset of arthritis, improve vision and potentially ward off cancer. Now link this to the products/produce in store and nutritional supplements and watch the affluent boomers come.
I think health will be the defining issue in this country over the next 20-25 years. For retailers, the defining question will be how many people will actually buy on the basis of health and for how long. Everyone understands the health risks associated with smoking, but new consumers are brought on stream every day. Lots of people understand the dangers of obesity but those Twinkees keep on selling.
Those of us who are lucky enough to survive past middle age with our general health intact would do well to extend the lucky streak by paying attention to our lifestyles.
For the 55+ crowd, that means nutrition, exercise and all too often, medications. With the baby boom bulge now looming over the retirement threshold, any brand marketer worth his or her (reduced) salt, is making plans to cater to that lucrative set of needs.
Retailers should consider stepping into the fray. Food and drug stores can quite appropriately take a position as advocates for their customers’ well-being. How many times have the smart people in this forum called for supermarkets to “stand for something”? For the nimble ones, this is one big opportunity.
Health products mean better margins, greater appeal and more traffic. They appeal to everyone, and have high rates of growth as our population “grays.” The graying of the baby boom shoppers means that effective merchandising must include health products to compete and retain customers, especially in the mass channel. Add-in the shift to superstores and hypermarkets and one-stop shopping is one of the key profit models for retailers, both now and in the future.
Very true that consumers are increasingly interested in “condition-specific” products — preventative or curative. Plenty of current research validates this. However, it’s important to keep in mind that there are significant regulatory restrictions on marketing products as curative, therapeutic or even relevant to disease states — throwing a significant wrench in the works of a “Heart Disease” treatment section of the Healthy Living aisle at my local grocer. Disease-specific Category Management won’t be a reality unless regulations are dramatically loosened.
An interesting conundrum, price and profit wise. If more people are put onto the shop floor willing and able to answer questions and direct customers to the most suitable products, someone will have to pay. Guess who? Did someone out there say “CUSTOMERS”? Could be. But then again, perhaps people who feel they are getting good, sound, advice and being pointed towards what is best for them, will be happy to pay a premium. It’s bound to be cheaper than going to the doctor and getting yet more prescriptions. There will be a crucial issue of trust to deal with first, though, and heaven help any store that falls down and either gives incorrect, inaccurate or incomplete information or, worse, continues to rely on ordinary every day low levels of customer service (EDLC).
By the by, my answer to the poll is a combination of all the choices. Age alone isn’t really appropriate because so many retailers continue to treat the elderly with an element of disdain and/or discomfort but age, when applied to the socially acceptable and currently still economically and physically active Baby Boomers, will be a strong motivation. Specific illnesses or conditions that are becoming more noticeable and widespread will also attract attention amongst manufacturers and retailers whose eyes light up at the prospect of dollar signs.