Giant Eagle Tests In-Store Wellness Areas
By Tom Ryan
Giant Eagle, the regional supermarket, is testing dedicated health
and beauty areas featuring a wider selection of dietary supplements, a premium
cosmetics counter and a pharmacy outfitted with a drive-through window. In
addition to a pharmacist, the areas will field a dietitian and a licensed skin
specialist.
Measuring 10,000 to 12,000 square feet in the three stores being
tested, the sections feature their own dedicated entrance, brighter lighting
and their own cash registers to accentuate the “separateness” from the rest
of the store, according to the Pittsburgh Post-Gazette. The sections
are not large enough to hold the inventory of a big box discounter, a pharmacy
or a supplement store, but offer a sampling of each category. A particular
emphasis is on organic foods and nutritional supplements. Giant Eagle added
more than 500 new vitamin products and there also are areas for homeopathic
remedies and gluten-free snacks.
A large pharmacy anchoring the area includes an adjacent
private room for consultations. Pharmacists can administer some vaccines, and
flu and H1N1 shots, and test for glucose and cholesterol levels, or for osteoporosis.
A
licensed nutritionist conducts classes on food preparation and dieting tips.
Joshua E. Shapira, the grocer’s health and wellness director, told the Post-Gazette that Highmark insurance plans typically cover the seven to nine sessions, which
otherwise cost $50 each. “Our goal is to come up with a Giant Eagle program
in a couple of months that would get to all the insurers,” he
said.
A licensed skin care specialist is on duty three to four days a
week as well as for consultations on everything from remedies for dry skin
or rashes to makeovers.
The test is so far being rolled out to two more locations
but could serve as a model for future formats. Since the program’s unveiling
in November, Mr. Shapira said health and beauty sales have increased 25 to
30 percent in the test locations.
Discussion Questions: What do you think of
Giant Eagle’s in-store wellness shops? Will supermarkets require dedicated
health sections to fully capitalize on this market opportunity?
An admirable effort for a regional grocer though in a growing-more-crowded-by-the-day space. CVS opening its Beauty 360 concept, Walmart’s remodels featuring health and beauty front and center with seamless segues to pharmacy where adjacencies have been completely rejiggered, Target launching “better-for-you” sub-private-labels…. Every retailer out there is laser focused on health and wellness, so I don’t see Giant Eagle differentiating with this strategy; however, they certainly can’t afford to sit on the sidelines as others jump in, experiment and fine-tune.
Giant Eagle should do very well with this new store within-a-store concept. I was meeting with another retailer management team a few months ago who claimed that 80% of people that fill prescriptions at their store also shop the store for food and other items. Giant Eagle clearly saw the same results and is capitalizing on the opportunity.
The added feature of offering specialists in nutrition and skin care as well as vaccines and flu shots is another added benefit that shoppers will find valuable. Convenience is important especially when we can only assume gas prices will rise over the next few years. When they do, Giant Eagle will have created a strong connection with shoppers by offering multiple services/products under one roof.
I think the dietician is a great idea. I think they’re wasting their money on a skin care specialist. I think they would be better off sticking with the fitness focus and having a part-time trainer to complement the dietician.
There is a huge focus on healthy living and wellness sections. Dedicating space is the best way to capitalize on margin opportunities these products present. ‘Wellness experts’ compliment the section by building a bigger basket in the category (as long as they really do know what they are talking about). As a regional, I can understand Giant Eagle’s challenges with expanding and dedicating space to a healthy living section but the revenue opportunities far outweigh the costs involved. Healthy living sections are growth drivers for both the pharmacy and regular grocery. GE should also focus on bringing in more organics to help build a bigger basket in that category.
The key for success will be having an environment which visually dramatizes and sells health and beauty. When it is successful indeed others will copy it and that is not all bad: “Giant Eagle did it first.”
Clearly this is “on trend.” The question is “on trend for whom?”
We have been discussing channel blurring, one-stop shopping, cross-over categories, call it what you will for years now. Dollar stores have added food, chain drug has added a convenience front end, c-stores have added food service, and Wal-mart has added everything. But what will shoppers ultimately embrace?
My hunch is that health care is going to have a higher hurdle of acceptance than tires, towels, toothpaste, and tuna. The closer the services offered come to being traditional health care, the more shoppers are going to seek outlets that provide a level of legitimacy and trust in that arena. To my way of thinking, that bodes well for chain drug when it comes to in-store clinics. You can never count Walmart out either. But grocery stores seem to have a higher hurdle.
The success of this concept revolves around the emphasis and independence of the pharmacy in the store. Clearly, the wellness efforts of the drug chains make sense in terms of the consumer mind set. The drug store is where one goes to get “healthy.” Despite chain drugs becoming more of a convenience store, they still carry the cachet of being a place to go for “health care.”
Trying to do the same thing in a grocery environment is somewhat tricky and in some respects risky. Does a consumer want to get their flu shot in the same place they purchase meats and produce? Certainly, there is nothing wrong with that except for the consumers’ feelings or perceptions. Let’s ask, “Do you want to go to the grocery store or the pharmacy to get your flu shot?”
That doesn’t mean that some grocery chains have already established their pharmacies as places for health, not just convenience. But, the separation in the consumers’ minds will be very challenging.
In general I like it. Done right, with a lot of promotion, I think it can still differentiate the offering. I’m wondering if the organic foods in this store-within-a-store will also be stocked in the main store. The debate on that still rages I know, although I’ve noticed a lot of aging boomers are increasingly shopping at stores where the items are separated, since they’ve become rabid label readers and are turned off by big-brand processed foods.
Forgive the aside, but I’ve noticed a great many organic and natural items in supermarkets have absolutely horrible nutritional profiles, loaded with sugar, fats, sodium, etc. Perhaps if Giant Eagle can do an honest job with this section and really educate shoppers, they’ll be making a good contribution. Whole Foods has already paved the path on this.
This strategy could work well for Giant Eagle, with the right fine tuning. As other panelists have discussed, a focus on healthy living, natural foods, a dietician–all could keep loyal customers coming back. Making Giant Eagle the primary shopping destination with better, healthier choices, fairly priced is a good strategy.
Knowing their core customers, maintaining communication, keeping it consumer centric for local shoppers are things a supermarket may be better positioned to do, The beauty focus may take some experimentation, as drug stores have a natural edge in this department.
It’s just a test. Time will tell. Good for Giant Eagle for experimenting.
Authenticity will be the key to success or failure. It’s easy (relatively) to stock a bunch of vitamins, supplements, and beauty products and hire a warm body to smile and read the labels. It’s quite another to do it right and become the “go to” for wellness remedies and products. This is a tricky product arena for the average consumer where confusing and often downright false advertising reigns.
The internet is loaded with information which is often contradicted from one site to another. The successful retailers will offer a well researched product line backed up by associates with deep knowledge of alternatives and the resources to access good information quickly. Whole Foods does a pretty good job with it, but honestly, even there I often wonder if the tattooed, dreadlocked associate really understands my problem and is knowledgeable enough to “prescribe” two of ‘whatever’ daily to cure what ails me. Do I think Giant Eagle, Kroger, HEB, et al can do it as well or better? Nah.
This is an interesting idea and a slightly different twist to the “health care centers” that housed a nurse. The question will be not who visits this area (because many consumers will), but who spends time in this area, what questions they have, and what kind of experts are necessary? What happens when the skin care specialists or nutritionists are asked for advice on which items the consumer needs to purchase to help with their ailments like the flu, a cold, allergies, or a bug bite? What is the liability for giving medical advice?
This is a great idea! The execution and followup is the next step. They need to make sure they are staying top-of-mind for consumers so they come back often. This is a relevant issue that should be topical for a while.
I can understand why “health and beauty sales have increased 25 to 30 percent in the test locations” according to Mr. Shapira. Stock more stuff, sell more stuff. I’m encouraged by Shapira’s initiative but wonder where the square footage came from. Did they build brand-new stores, expand current locations, or take space away from other categories? The first two options are no-brainers because more space means more sales. The last option–taking space from other categories–naturally means lower sales in those disenfranchised categories. No one ever argued that devoting existing space to more profitable categories is wrong, but some reporting transparency is called for here.
How about $4.00 prescriptions? That seems to work pretty well, too.
Although this has been done by other retailers — also done in the distant past, perhaps ahead of its time — I think offering the customer a convenient way to manage their health is a good thing. I’d like to see this taken to a far higher level, though, by introducing incentives for the customer to assume the responsibility for their own health care. Rather than reliance upon an employer or the government, there are promotions that could be effective in driving a “consumer-managed health system.”
Smart. Smart. Smart. Today’s more health-conscious consumers are looking for access to health and wellness solutions that are convenient, in line with their budgets and don’t require making an appointment two weeks in advance.
“Retail Healthcare” is a trend I’ve been monitoring for years and it only keeps growing. Health and wellness initiatives are a great way to create brand engagement, especially for today’s more frugal consumers who need an authentic reason to patronize the brand, for consumers who feel the current healthcare system is largely inaccessible and for consumers who are taking greater control of their personal health and wellness. Good for Giant Eagle. I hope more merchants follow suit.
I can tell for from those we are attending our webinars, and from those who have an interest from the pharma, retail, and medical area, this is going to be a BIG business. Yet I am not sure it is going to change the behavior of Americans, but I am hopeful.
Just one more protective move by Giant Eagle to prevent Wegmans from ever entering their markets.
As long as their marketplace locations can handle the extra space the in-store wellness areas take, it should be a winner.
Anyway, a retailer can keep a customer in the store longer to purchase more offerings, it can only add to the bottom line.