Industry Issues and wellness. ... Bill, your organization, Rite Aid, is doing some great things...

1 • March 2012 DrugStoreNewS.com

gUest Moderator daVid Van HoWe, MPg drUg: Today we’re going to re-ally challenge our panel to think about how you de-fi ne ‘wellness?’ How does

the consumer shop the store and your products differently today? [So let’s look at a couple of additional facts around this.]

According to 2011 research from the Hart-man Group, 46% of shoppers today say that they have successfully used natural and alter-native OTC medicines. An additional 37% are interested in trying one. Again, that came out in some of the consumer feedback we just saw [in the video]. Seventy-nine percent of consumers say they are concerned about over-medicating with OTCs; 64% of them are concerned about purity, chemical- [and] irritant-free; and 54% of consumers say they are dissatisfi ed with OTC cough-cold options right now. So with that, [and with this idea] of trying to defi ne health and wellness. ... Bill, your organization, Rite Aid, is doing some great things [around wellness]. What is your defi nition, and how do we align around a defi nition of wellness?

BiLL Bergin, rite aid: I think we are defi -

nitely seeing a transformation on how people approach wellness. In the past, people viewed wellness as the ability to treat and cure an ill-ness when they became sick. Today, it is very different. Wellness is an active process where-by people take responsibility for managing their nutrition, exercise and lifestyle in such a way that they lead happy healthy lives. That includes not only looking good, but feeling good. I see it as our responsibility to provide them with the tools to be successful with man-aging their wellness on a daily basis as op-posed to just managing their illness.

ken keeLor, katZ groUP/reXaLL: I think one of the things I picked up from the video was that it reminded me of a phrase [I fi rst heard] about 10 years ago as I was leaving a grocery company I was working for — I made a lot of friends there — and one of the guys said to me on the way out, ‘Ken, be yourself wherever you go. Remember, it’s all about health and happi-ness; everything else is window dressing.’ And when you look at what the people were saying in that video, I see a lot of that up in Canada.

I don’t think it’s actually that different in terms of how people feel. Most consumers seem to want more from their lives from the

point of view of mind, body and spirit. And one guy in the video really put all three words in his comment. It’s similar up in Canada. I think years ago the word yoga wouldn’t have come up in a video like that, and certainly I can tell you, guys never went to yoga classes. But if you go to yoga classes [now], it’s not about gender anymore; everybody goes to them, and they’re getting very, very popular. And it’s a regular regimen; everybody’s selling yoga wear, etc.

So from a store point of view, it’s about pro-viding the information, the training and the education that we need to provide our staff with the tools they need to communicate with our customers, as well as communicating di-rectly to our consumers that we have solutions for them. So it’s one thing to develop the prod-uct assortment that you need and the services that you need, but if we don’t train our staff and educate them about what it is they’re talk-ing about when consumers come in … let’s say a consumer who has diabetes and they want to talk to them about working out regularly or exercising every day; it will not come across as genuine. We have to be genuine in the infor-mation we’re equipping our staff with.

And so a big chunk of this is actually train-ing on top of just learning the basics, and then

In November 2011, The Drug Store News Group hosted in New York the 13th annual Industry Issues Summit conference. Taking center stage at

the multitrack event was an exclusive executive roundtable discussion of leading retailers from food, drug and mass, and executives from leading

health and beauty companies and service providers. Guest moderators and industry veterans David Van Howe of MPG Drug/Crossmark and

Dan Mack of the Swanson Group led the panel through a range of topics related to aligning consumer definitions of health and wellness with

strategic objectives and new product innovation.

PaneLists: Bill Bergin, Rite Aid • Joel Carden, Pacifi c World • Janet Carter-Smith, GlaxoSmithKline Consumer Healthcare • Sharon Glass, Catalina

Marketing • Kurt Jetta, Tabs Group • Ken Keelor, Katz Group/Rexall • Joanne Leonardi, Ahold • Dan Mack, Swanson Group (co-moderator) •

Dale Nepsa, Hyland’s • David Linsenmeier, Novartis Consumer Health • Scott Patricki, Pharmavite • Jason Reiser, Sam’s Club • Ron Schone,

Pfi zer Consumer Healthcare • Robert Tompkins, Walgreens • David Van Howe, MPG Drug/Crossmark (co-moderator)

ry IssuesIndust

DrugStoreNewS.com March 2012 • 2

communicating to our consumers in a way that integrates technology. The other thing is, a lot of those folks that you saw on the video, they’re not people that necessarily are going to stand there and read shelf signs and bro-chures, pamphlets, so you have to reach out through social media. You have to reach out through websites, etc. So communication is a key part of it as well.

Van HoWe: Joel, on the beauty side of the busi-ness, … how does beauty care work into this wellness continuum?

JoeL carden, PaciFic WorLd: Well, a cou-ple of basic facts: To start with, it’s been said that we as a society spend the fi rst half of our life — if not longer — trying to earn money and the second half of our life spending our money trying to get our health back. And I think there’s a lot of truth to that. From a defi nition perspective — let me get a little technical here just for a moment — the Web-ster defi nition of ‘well-being’ is “the quality or state of being in good health, especially as an actively sought out goal.” I think what’s more appropriate to us, and particularly to the beauty side: There’s a different defi ni-tion [of wellness] from the McKinsey Health Center out of the University of Illinois, which defi nes wellness as “a state of optimal well-being that is oriented toward maximizing an individual’s potential.”

And this is a life-long process of moving toward enhancing your physical, intellectual, emotional, social, spiritual and environmental well-being. And I think it’s within that space, Dave, where people feel that beauty products come in, where people are feeling better about themselves, whether emotionally, spiritu-ally, physically. ... I think that’s where beauty comes into the equation.

Janet carter-sMitH, gLaXosMitHkLine consUMer HeaLtHcare: When you consider wellness, it’s multidimensional, and I think we heard that from the people on the street in discussing [that] it’s more than just physi-cal. [Wellness] actually encompasses many as-pects, including things like spiritual, emotion-al, even occupational and fi nancial wellness. So I think when you’re considering that and you defi ne what health means, that’s usually the absence or the presence of symptoms. And certainly with 7-in-10 deaths in this country being attributed to chronic disease, that’s an important aspect of the health-and-wellness equation as well. So ... as we’re considering what that means to consumers and how we put that together from the manufacturer per-spective as well as the retailers, we have to re-member four things. One is that the consumer is always looking for solutions. It is a journey for them; it’s not a defi ned moment; it’s always a process. So they are constantly aware of well-ness; it’s on their minds — everyone in the vid-eo talked about how they have made changes in the last year. And they also have choices, and they’re not afraid to exercise those choices, so we have to keep that in mind, too. And I think the most important piece is that success

So it’s one thing to develop the product assortment that you need and the services that you need, but if we don’t train our staff and educate them about what it is they’re talking about when consumers come in ... it will not come across as genuine. — Ken Keelor, Katz Group/Rexall


is defi ned by the consumer, not by some soci-etal set defi nition of what success looks like, and everyone has a different view of that.

scott Patricki, PHarMaVite: Dave, I’d like to comment on this topic as well. Our in-depth consumer market research that we have con-ducted at Pharmavite has identifi ed that the health-and-wellness space has become high-ly aspirational with consumers. In the past, health and wellness was viewed by consumers as a very functional and obligatory regimen in their life. The consumer’s health focus in the past was primarily a reactive treatment regi-men heavily based on pharmaceutical drugs to treat their chronic illnesses. The chronic illness or the disease state had already manifested it-self within the body, and people were focused on treating the symptoms caused by the chron-ic disease state they were addressing.

Moving to the present, there has been a ma-jor societal shift toward proactive disease pre-vention that includes a much broader health-and-wellness regimen that includes exercise, a healthy diet and supplementing the diet with vitamins and supplements that your body has a defi ciency of. So, the new, modern health-and-wellness regimen is all about proactively working to prevent the onset of a chronic ill-ness instead of waiting until the chronic dis-ease has manifested itself in the body. Our consumer research identifi ed a common theme or mantra that is prevalent among consumers today: that it’s not just about adding more years to your life; it’s about adding more life to those years that you live. It’s clear that the shift to proactive disease prevention is well under way with the new generation of wellness ad-vocates in the marketplace.

ron scHone, PFiZer consUMer HeaLtHcare: I want to add one more thing if I could, Dave. I think Janet made a good point about wellness being a journey. I think for years we viewed it as if you’re not healthy, you would go and get a med and get it addressed with a doctor, etc. I think that you can look at wellness more on a spectrum now. There’s an opportunity. I think the question was asked earlier on: ‘How many people are well right now?’ You could be well, but maybe you haven’t had a good night’s sleep the last few nights. So there’s an opportunity to improve that. And not getting a good night’s sleep can lead to things like not looking as good, not feeling as energized, not feeling as inspired as you normally would in the morning. And so that’s the holistic element of it. So I think there’s a lot of opportunity for both us and retail to take a look at what are the different ways that we can address wellness — not just one aspect of it, but on that spectrum.

Jason reiser, saM’s cLUB: I was really struck on the video about how easily the people could defi ne wellness, but then when they were kind of trying to talk about what they were going to do about it — I mean, fi rst of all, only three of those people mentioned vitamins. None of them mentioned an OTC product. I was really struck by how confused they were, even with all the information that’s out there today. One of them said, ‘I don’t eat Chinese food anymore.’ Another one said, ‘Well, I shop at Whole Foods, but that’s all I do.’ Another one said, ‘I want to take care of stuff like my iron level.’ It just wasn’t a very holistic approach even though their defi nitions were very holistic. So to me it’s a great opportunity to speak to consumers in a way that they want to be spoken to.

sHaron gLass, cataLina Marketing: And that’s really the challenge. I’ve been work-ing on health and wellness for fi ve years with Catalina, and when you analyze all those in-dividual households, every one of them wants something different and unique to their specifi c health need. The question is: How do we pro-vide personalized products, solutions at retail that are mass enough for us to execute, but still keep it unique to that shopper? Retailers can’t create a different campaign for everyone’s in-dividual health state. Focus needs to be on the big disease states, but make it fl exible and

customizable by the shopper. Scalable [healthy, beauty and wellness] solutions, I feel, is the big challenge for a lot of us — how do you execute something that’s effective, scaleable and meets individualized needs based on how they look at wellness? We need to look at specifi c data or shopping patterns to see how they’re behav-ing at retail and market to them accordingly — where, when and how she wants to be reached.

roBert toMPkins, WaLgreens: It’s kind of interesting that what they scoped out was very voluntary. And the evolution that we’re going to see, if health is how I feel and wellness is how I take care of myself, is when it’s not voluntary. When your insurance company maybe today is giving you one rate if you smoke and one rate if you don’t, who tomorrow may do the same thing for your [body mass index] or if you’re testing your blood glucose? So to position the industry in a way that’s ready for that dialogue to change, especially as more Americans are becoming in-sured, it’s going to be interesting to be a part of.

daLe nePsa, HYLand’s: And we’ve found in our marketing efforts just what we were talk-ing about: You have to take an individual ap-proach to it. Facebook and Twitter and other social media allow you to do that, where you can take general health issues and individual-ize them to the people that are on your Face-book page, for example, and have a dialogue with them and get to the mass market. But you get to the mass market a few people at a time.

gUest Moderator dan Mack, Mack eL-eVation: Last year, we had a health summit followed by a beauty summit. Since health and beauty are start-ing to blend together, we thought it was

benefi cial to have a larger blended discussion.The shift is subtle but consistent. Health,

wellness and beauty are converging — what’s going on here, and what are the emerging trends that the group here really needs to hear?

Bergin: We heard earlier that looking good is a function of feeling good. I think they go hand in hand. This is particularly true in crossover cat-

Industry Issues Summit


egories like oral care and skin care. Those types of categories have traditionally been associated with beauty. However, there are many thera-peutic products coming to market in these ar-eas. This creates a blurring between health and beauty. I am fortunate to have the opportunity to manage both areas. There are strong syner-gies between these two groups, which creates a great deal of opportunity to manage them in a coordinated manner.

nePsa: One of the most signifi cant changes or trends in consumer health care in the last 15 or 20 years has been the resurgence of ho-meopathic medicines and their acceptance by the consumer as a viable alternative to many OTC medications. This trend has run parallel to, and has a direct correlation with, the merger of health and wellness. We as consumers are taking more responsibility for our health care and the health care of our families. It is no lon-ger a matter of just getting well when we are ill, but staying well and taking a more natural approach to health and wellness. There is no other segment in the [food, drug and mass] channel that can rival the growth in this area.

keeLor: One of things we see certainly in Can-ada — and I think the United States is similar — is some of this is purely demographically driven. The baby boomers are aging, and we’re seeing that convergence is happening natural-ly because a lot of people have gotten into the health piece of it earlier in their lives; but now as they age, they have to take care of their skin, etc. And so those products become essentials to them versus what earlier might have been an expensive product that they would buy and try

out and see how it works out, but now those products have become essentials. And the oth-er thing about those demographics is that older generation actually has the money to spend on some of these beauty products, [which] are ac-tually not cheap. Some of them are expensive products, especially if you use them regularly. So a lot of demographics in play there.

Mack: Thank you for your thoughts. Joanne, I actually would like to ask you a question. Your organization does a great job of understanding the neighborhoods and communities you oper-ate within. Health and wellness and beauty are starting to blend together. What does that mean to you? How do you take advantage of that?

Joanne Leonardi, aHoLd: It’s actually interest-ing that you said that, Dan, because Ahold does do a tremendous job of really understanding the consumer demographics and the consumer needs. Being in the grocery industry, [Ahold has been] into the loyalty card area very early on. So the amount of data we have is pretty phe-nomenal, and [we] use that data very distinctly. And it’s very interesting because I think it’s a combination of the retailer, in addition to … so-ciety, the Internet, new products coming out. … It all intersects beauty and health together.

We actually have stores that have natural and organic aisles, and specifi cally with OTC and beauty care products in there, as well as the traditional aisle with regular OTC and beauty care products. And it’s very interesting to see the discussion you have with suppliers about where should they be. Should they be segre-gated or should they be integrated? And I think the natural and organic and green concept is all part of this health-and-wellness space. The data we’re getting from consumers is that they’re looking for this product, and the market basket information that we’ve gotten has actu-ally suggested that when you have this product available for that consumer, the market basket does change; it changes in a very good way. So I think that the retailers aren’t necessarily decid-ing the health and beauty convergence, it’s the consumer that’s deciding that. And how we can react to that consumer is going to be the differ-ence in where it goes from here.

nePsa: Joanne is right on. The consumer dic-tates how we go to market. At Hyland’s, we did

a lot of research, as well as trial and error, around the best methods of merchandising homeopath-ic medicines. Overwhelmingly we learned that consumers shop by condition. When we have a cold, we go to the cough-cold aisle; when we have pain, we go to the analgesics aisle, etc. When natural, alternative medicines are not available in these locations, the consumer loses, and in the end, the retailer loses.

Mack: Thank you. That’s good. Robert and Ja-son, I’d like you guys to think about this. You guys are passionate about vitamins, minerals and supplements; and as VMS goes, so does health and wellness. There’s a lot going on in terms of vitamins and how it relates to beauty and to overall wellness. What is going on with that megatrend that could translate to other cat-egories? Robert, you want to jump in fi rst?

toMPkins: It really started in hair, skin and nails, and it’s evolving into more premium products. And I think what a lot of companies are doing successfully is taking some of the con-sumer insights that others on the panel have spoken to [today] into action and creating prod-ucts that fulfi ll that vanity need. There’s an un-derstanding that health does start from within and that it’s refl ected on the outside, and that vitamins can play a very vital role in creating that state of health and wellness for a patient or a customer. But we’re also seeing it in other cat-egories. I think scar care has been very interest-ing to watch as it evolves between fi rst aid and beauty, and then back to fi rst aid. And there are other categories like that where there’s a clear connectivity between health care and beauty.

Our consumer research identifi ed a common theme or mantra that is prevalent among consumers today: that it’s not just about adding more years to your life; it’s about adding more life to those years that you live. — Scott Patricki, Pharmavite

In the past, people viewed wellness as the ability to treat and cure an illness when they became sick. Today it is very different. Wellness is an active process whereby people take responsibil-ity for managing their nutrition, exercise and lifestyle in such a way that they lead happy healthy lives. —Bill Bergin, Rite Aid

The evolution that we’re going to see, if health is how I feel and wellness is how I take care of myself, [then] it’s not voluntary. When your insurance company maybe today is giving you one rate if you smoke and one rate if you don’t, who tomorrow may do the same thing for your [body mass index] or if you’re test-ing your blood glucose? — Robert Tompkins, Walgreens


reiser: I’ll tell you, I’m confl icted on this be-cause I think it’s easy to get the fi rst sale on a beauty vitamin. I think the effi cacy is question-able — maybe not questionable but not notice-able to her. And so, again, that repeat sale is a lot harder to get, and I think some other re-tailers and specialty retailers have really tried to get into some beauty vitamins, and I don’t know that they’re doing that well because, again, it has to be something that produces re-sults, especially in something that’s as person-al as beauty. So right now, hair, skin and nails, but beyond that, I haven’t really seen much; and I’d love to see that crossover because I do think it could be really powerful.

Mack: Jason, as a limited SKU retailer, what are you seeing in terms of that larger trend — beauty, health care and that convergence? What are you seeing in other categories?

reiser: You are seeing the introduction of some of those ingredients into beauty care, some of the vitamin ingredients. CoQ-10 is the one that comes to mind, antioxidants, you’re hearing a lot of that. So I think they’re borrow-ing some of that credibility; but again, it gets back to if there are no results, Dan, she’s going to stop buying it pretty quick because [those products] are not cheap.

toMPkins: Real quick, the other megatrend that you brought to mind is supplemented foods, and it’s one of those fl anks that we’re watching very carefully. I think it started with some of the

yogurt-based digestive products and could evolve other places where the consumer who may not want to take a pill will seek out their nutritional needs both for their inside well-being and their external well-being through food products.

gLass: I just wanted to add to your comment about vitamins. We ran data and found that 60% of consumers who bought vitamins in January did not repeat that year. And a lot of it is not that they don’t want to; it’s all about instilling a regimen or habit. This is the case for a lot of HBW products. You look at some yogurts, they have a promise, but you have to take it every day for it to deliver on the prom-ise. So a lot of the programs require constant reminder messages. We sometimes don’t vis-ibly see the improvement/benefi ts of a healthy product we are consuming. We do not realize that our hair looks better due to that vitamin we are taking. So how do we reinforce the message, make sure we’re educating and con-stantly keep it relevant and topical, and keep it fresh? For instance, we do a great job running programs for a healthy heart during February for American Heart Month, but these targeted shoppers have a heart condition all year. How do we continue that message throughout the year, not just the month when it’s a calendar event? We need to run ongoing education, recipes, offers to help them with instilling a healthy habit and regimen for the long term. Patricki: Our company launched a line of beauty supplements in the past. What we ex-perienced was that while driving consumer

trial purchases were easily attained, attaining consumer repeat purchases was diffi cult and challenging to achieve because consumers with a beauty regimen are looking for imme-diate gratifi cation and expect to experience immediate results. Good examples of some of the nutritional supplements today that do deliver noticeable improvements in a beauty regimen are biotin, collagen and multivita-mins that have special ingredient formulations that deliver healthy hair, skin and nail benefi ts. Consumers see more immediate results when they’re taking these supplements.

The broader opportunity for retailers and manufacturers is taking those beauty supple-ments, like biotin and a few of the other beauty supplements I have mentioned, and cross-merchandising those products with other beau-ty products in the store. Set up beauty-health-solution center displays within the store where you merchandise cosmetics, skin care moistur-izing lotions, sunscreen lotion, hair coloring kits, etc., representing the external part of the con-sumer’s beauty regimen — with the nutritional supplements like biotin and collagen serving as the internal part of that beauty regimen.

Simplify the shopping experience for the consumer with a beauty regimen by mer-chandising these inner/outer beauty prod-ucts together so they can more quickly fi nd those products that they need to support their beauty regimen. The health solution center not only simplifi es the shopping experience for the consumer, but also helps to enable transaction, building buying behavior for the retailers as the consumer potentially purchases a broader number of beauty categories at that retailer from that one point of purchase than they have in the past when they may have purchased one beauty product category in one area of the store but never shopped or made a purchase in the other beauty categories across the store.

Van HoWe: I’m struck by one thing that was said by the panel, and I’ve heard it a couple of times: megatrends. The Tabs Group is phe-nomenal at spotting trends. How quick and how much data can you get to a retailer or a manufacturer, and say you’re spotting a trend in the industry and start to move toward that?

nePsa: It is surprising that when discussing megatrends, homeopathy is not being includ-



ed. Twenty years ago, there were literally only a couple of homeopathic SKUs in regional dis-tribution across the country. Today, homeopa-thy represents more than a $1 billion segment in [food, drug and mass]. It wasn’t something that burst on to the scene overnight; it is a megatrend that slowly gained momentum as consumers began embracing it in their quest for better health and wellness.

kUrt Jetta, taBs groUP: Pretty quick. I mean, within four to eight weeks, there are certain metrics you can bring together, particularly when they’re spotting something that’s truly an incremental innovation or is just something cannibalizing the existing business. And prob-ably our discussion is more oriented toward the second part, but as far as what you’re call-ing a megatrend on the convergence, I’m not sure I accept that premise. I see actually the op-posite of that. I see a couple of well-placed op-portunistic products that do capitalize on that, a couple like Bio-Oil stretch marks and scars. I think that’s a nice blend, but the Olay Vitamins was something I think tried to blend those two — didn’t work. ... Then we worked very close-ly with a specialty vitamin retailer that tried to go big into beauty, and that didn’t work. So I think the empirical evidence that I’ve seen, looking across the wide variety of retailers and consumer databases, doesn’t suggest that it’s a trend so much as a couple of innovative manu-facturers capitalizing on that.

Mack: We’re going to talk about intangible as-sets and other company attributes other than

product — which manufacturers bring to the retailer engagements. So outside of product, what are the types of assets that really are making a difference? So, the retailers that get excited about unique assets, what are those kinds of assets and what’s the value? Bill?

Bergin: I believe every project should have a foundation of consumer research and consum-er education. Any time you start with a propo-sition, whether it’s a health condition platform or the consumer decision tree to merchandise a planogram, there is a benefi t to leverage a key supplier partner. If it’s a smoking-cessation ini-tiative, and you’re not partnering with Glaxo-SmithKline, or a diabetes initiative, and you’re not looking to the leadership of LifeScan, then you lose the opportunity to incorporate their invaluable insights. For us to try to build those programs without them, I think you’re leaving behind the basic foundation that will give them a much greater chance of being successful.

Leonardi: I think some of the intangible as-sets that companies can bring — to Bill’s point — are defi nitely consumer data that you see in addition to the consumer data the retailer has because the retailer should have consumer data from their own consumers, whereas the suppliers should be able to provide additional research for things in the areas that they see growing. But innovation for me … part of the intangible assets is innovation — which I know we’ll get to in the next question — but it’s also innovation in the stores you shop,

the way you merchandise them. … Does the customer feel like they can take the time or do what they need to do to buy products that they’re looking for for health and wellness? Or do you give them the information they need when they’re not quite sure what they need for health and wellness?

You know, health and wellness, as we saw [in the video], means a ton of different things to dif-ferent people, so you need to supply some an-swers to their questions almost before they ask the question. And I think those to me are kind of the intangibles that we need to bring together and really try to fi nd with the retailer and the supplier to improve the wellness solution.

And in today’s economy, we also have to give a value to that. I think it’s important we all want to do these great things, but we also have to make sure the consumer is only will-ing to spend a portion of their income on that; so we have to provide a value to the consumer that they feel that they’re getting something for what they’re looking for. So I think we can’t forget about that value equation in all this health-and-wellness discussion.

carter-sMitH: I think that we would be remiss if we didn’t talk about ... OTC medicine — as an industry, we are bringing value to the consumer in the form of trusted, safe, effective forms of self-management for their health care. And if you look at some of the research that [the] CHPA has done around the Your Health at Hand initia-tive, it delivers savings — if you just eliminate half of the unnecessary primary care visits — of [more than] $5 billion a year. While that is dol-lars and cents, and obviously a tangible asset, certainly the heritage of OTC medicines and the role that retailers play in the delivery of that, we have to, as an industry, continue to get lawmak-ers, policy-makers and key stakeholders to re-ally value the role that retailers and OTC medi-cines play in health care today.

Mack: I would go a little deeper on this for a second with Joel. I know a little bit about your company; you guys are a smaller company who just got bigger. Your company knows a lot about your section; you know a lot about emerging trends culturally, internationally. You guys hone in on that a lot, and you do a heck of a job. What can other companies learn from your team?

I was really struck about how easily the people [in the video] could defi ne wellness, but then when they were trying to talk about what they were going to do about it — only three of those people mentioned vitamins. None of them men-tioned an OTC product. I was really struck by how confused they were, even with all the information that’s out there to-day. ... It’s a great opportunity to speak to consumers in a way they want to be spoken to. — Jason Reiser, Sam’s Club

One of the most signifi cant changes or trends in consumer health care in the last 15 years has been the resurgence of homeopathic medicines. ... This trend has run parallel to ... the merger of health and wellness. ... It is no longer a mat-ter of just getting well when we are ill, but staying well and taking a more natural approach to health and wellness. — Dale Nepsa, Hyland’s

We actually have stores that have natural and organic aisles, and specifi cally with OTC and beauty care products in there, as well as the traditional aisle with regular OTC and beauty care products. And it’s very interesting to see the discussion you have with suppliers about where should they be. Should they be segregated or should they be integrated? ... I think that the retailers aren’t necessarily deciding the health and beauty convergence; it’s the consumer that’s deciding that. — Joanne Leonardi, Ahold

The question is: How do we provide personalized products, solutions at retail that are mass enough for us to execute but still keep it unique to that shopper? Retailers can’t create a different campaign for everyone’s individual health state. ... How do you execute something that’s effective, scaleable and meets individualized needs based on how they look at wellness? — Sharon Glass, Catalina Marketing




carden: First of all, I agree with a couple of the previous statements about what retailers are looking for from suppliers. Absolutely, con-sumer insights is one of the major expectations from retailers. Innovation, as was also brought up, is a major expectation. Category manage-ment, in general, which starts with consumer insights, is an expectation of what retailers are looking for, and that’s on a global basis. I think also in the beauty industry, there are a couple of other expectations in particular: They’re looking for style trends and where is the future going? And we need to be able to talk to people and understand today what 2013 and 2014 look like.

To be effective in the beauty business, we must be working on that now. And I think, may-be last but not least, I think the retailers are look-ing for manufacturers that develop a connected-ness with the consumer. And that happens in a lot of different ways. One of the ways we’re proud to be associated with this is through our Revlon licensing products. With these products, we participate in the Revlon Walk for the Cure. And that’s developing a connection with a lot of consumers who relate to that cause.

nePsa: The need to bond with and listen to consumers is vital to the success of any new or existing item. Our VP marketing prefers the title of chief consumer advocate because of her persistence in understanding what the consumer wants and needs from our company. Back in the day, we used small focus groups to spot trends and avoid costly mistakes. To-day, you can engage thousands of potential consumers and be much more prepared for success and be able to give retailers the infor-

mation they need to fully understand and sup-port your products.

Mack: And that’s actually a trend that we’re seeing consistently with breakthrough smaller companies. They are very good harnessing and keeping track of their community of consum-ers. Manufacturers that do this make it pretty easy for retailers to say ‘yes’ to their new items.

Kurt, just a quick question for you: Can you speak to how smaller companies bring for-ward validator insights to their retail partners?

Jetta: I would say it goes hand in hand. I would say the bigger one is objectivity. I mean, truly putting aside your best interests for the sake of the retail customer and then taking a broader view. I’ll give you one example: We were help-ing one client on the frozen food aisle, and they wanted more doors on their particular catego-ry — that was a key corporate objective. After looking at the entire totality of frozen, not only don’t you deserve more doors; you’ve [also] got to give up a couple. And begrudgingly after a series of discussions, they went forward to the retailer and gave them up, and that translated to now the retailer wanted help on their entire store. So now they’re basically helping us real-locate everything in the store. So that objectivity, giving up those two doors in a key core category at a major retailer, translated into now they basi-cally have a seat at the table for the entire store.

reiser: And I’d add one more thing as far as intangibles — something that hasn’t been brought up and said. So on most of these items — the same item that’s going to be on Rite Aid shelves, that’s on Walgreens’ shelf — that’s go-ing to be on my steel. And so something that I would like as an intangible and that we see sometimes, very rarely, is how we’re going to drive loyalty into my box. Because that’s really where the money is.

And so, again, how can I gain the fi rst pur-chase? How can I get loyalty to Sam’s Club and maintain them as a member and a customer for the lifetime of that product? So there are other things besides the item, with health screenings and involving the pharmacist and really get-ting into that loyalty piece. Because, again, my Colgate doesn’t look any different than anyone else’s — how do I make that person loyal to Sam’s Club, to buy at Sam’s Club?

Mack: We’re in a world now where 80% to 90% of all launches either do not meet expecta-tions or fail, typically within 24 months. Most organizations love to look at the data for fi ve or six months; but the best know the status of their new items within six weeks of launch. Many categories are suffering from micro-seg-mentation, meaning there’s a lot of innovation going on in categories, but the category’s not growing. So the pie grows a little bit bigger, but now you’ve got four new entries watering down the overall category productivity.

Recently, IRI’s Thom Blischok shared that the best-in-class introductions accomplish two things: The items are clearly understandable to the con-sumer, and it’s something that they clearly need. And No. 2: The ones that succeed redefi ne a cat-egory, transform a category or create a new cat-egory. Most consumers can’t remember more than two new items launched per year. The idea of breaking through to the consumer with inno-vation is really diffi cult; it’s just tough stuff.

Only 17% of all nonfood items generate more than $7.5 million at retail. And if you’re at 50% distribution, the sales numbers don’t really move anybody. When you go to $20 million, the num-bers are even more humbling, showing that only 3% of new item launches get past $20 million.

The second chart outlines IRI’s ‘Pacesetter brands’ delivering more than $7.5 million in sales. The categories showing strongest new item growth include personal care, beauty, health care and pet care — with nonessential, home care and detergents at the low end. The consumer is looking for real innovation.

Van HoWe: So when you look at some of the recent trends in the industry and look at what’s breaking through, and you look at really, truly innovative products and products that are bring-ing incremental value to the consumer, it is very clear: innovation is all about ‘It makes my life better; it makes my life easier.’ So you’ve got categories and items like 5-Hour Energy — $157 million, created a new category. It doesn’t happen very often; we wish it happened more often, but it doesn’t. Crest 3D White, Prevacid, MuscleM-ilk, Neti Pots — a sleeper item — all of a sudden just exploded. You look at some of the additional ones — Dove Men’s skin care, men’s care has been talked about for many, many years as being an important emerging trend. Seems like Dove is breaking through. Olay Pro-X — high cost, high

retail value, but the consumer has to see value be-fore they try it out. MegaRed, Bio-Oil, Extenze … those are the types of items that seem to be the ones breaking through.

So the real question here is, and the last slide that we have, is 20%, or 1-in-5, of consumers say they are always looking for new products and are willing to try something new. With that, we’re go-ing to go back to a defi nition of innovation. In-novation from the consumer’s perspective is all over the board. And there’s a lot of innovation going on in the industry. Innovation doesn’t have to just necessarily be product; it doesn’t necessar-ily have to be a category. It can be a merchandis-ing theme — it can be anything. How are you innovating today and presenting something that you’re going to get credit for from your consum-ers for innovation? So I’d like to start with Robert. Walgreens seems to be on an innovation speed-train right now, multiple formats going on. And how is Walgreens defi ning innovation today?

toMPkins: You know, I think innovation for us is doing something that is focused on an experience for a customer. It’s about convenience; it’s about connectivity; and more and more innovation is becoming about personalization. I think you see that with the Apple piece, right? People want to be able to customize, make it for them; your iPhone is not my iPhone — it becomes a very unique thing to me. And innovation that can do that for somebody, either in terms of product or format, it can be very meaningful for folks.

The other thing we’re seeing with innovation outside of product is there’s high-tech, but then there’s also high-touch. So a lot of the folks men-tioned the Apple iPhone. Well, if you’ve been to an Apple store, that’s not about high-tech; that’s a really happy service person in front of you that loves what they’re doing, who you almost instantly get jazzed up about interacting with. They’ve blended high-tech with high-touch. And I think as we’re trying to innovate, we’re trying to do those two things. There’s certainly a technological piece to it, but through beauty advisers and other means in our stores, we’re also trying to innovate through high-touch.

Van HoWe: Ron, we saw in other trends, we’ve noticed that product innovation has really kind of fallen off in recent years as the economy slowed. There seems to be a trend that there are less and less new truly innovative products

coming to market. How is Pfi zer thinking about innovation these days?

scHone: Well, if you look at the numbers, you can understand why. All of us manufacturers — everybody out there — we’re all in it for a profi t motive, and it’s been like baseball; the numbers are very low, and when you get a MegaRed or a Neti Pot, it’s great, but it doesn’t happen very often. So we have multilevel strategies around innovation. We are defi nitely on an innovation curve right now. It’s generating a lot more new ideas and new products. … One of the things we’ve learned is you can’t just go out and try to build a better mousetrap and hope people will come. You do have to bring things along with it.

And if I go back to the discussion we had on wellness, one of our insights, Dave, is that what’s key in wellness is this notion that you have to inspire the consumer to come, use your product and use it more than once. So when we do wellness programs, we always use inspiration as part of our platform. An inspiration could be in a number of different ways. We use the Internet; we use social me-dia; and we use a whole bunch of tools that start to build a regimen. We know a lot about these products. We know what happens when people don’t follow compliance, being in the vitamin business and the Rx business, and so we focused a lot on how to help consumers stay energized about taking their meds, taking a vitamin or taking some other regimen. So we have a number of different ways.

And then of course, being part of a large

pharmaceutical company, we have a pipe-line of switch products that is always a great promise. I think I saw a number somewhere that switch products represented like 70% of the growth in OTCs over the last three years. So that’s obviously another area that we’re looking into. And then we constantly look at acquisitions and licensing agreements.

Van HoWe: Bill, how is Rite Aid thinking about innovation today?

Bergin: We view product innovation as criti-cal to category growth. To be honest, it’s been a tough year in that area. We have experienced success in some areas. For example, Crackle Nail Polish. There is an example of a product that is both interesting and innovative. Regard-less of how much nail polish a woman had at home, she would purchase an incremental bot-tle just for the experience. That was a driver of category sales and profi tability.

I do think that in these diffi cult times of real product innovation, one of the frustrations we continue to see is churn that brings no value to the category. It brings no value to the retailer or the supplier, and more importantly, no value to the consumer. If I had a challenge for the sup-plier community, it would be how do we work together to truly understand how much inno-vation is necessary to deliver category growth? We often collaboratively implement a plano-gram and replace 75 slow-moving items with 75 that deliver no more sales or profi tability. Very often there are only fi ve to 10 items that really have an impact. To achieve that, we went through an extended period of category disrup-tion. Suppliers were paying markdown dollars, we were defl ating the category sales and profi ts selling product at reduced prices, and the over-all planogram experience is poor for an extend-ed period of time. At the end of the day, neither one of us got a lot of benefi t out if it. Quite hon-estly it was a detrimental process for both the retailer and supplier in terms of sales defl ation and nonproductive utilization of funding.

I wish I had the answer. But I can tell you I do not because we seem to repeat the same pattern every year. We need to work collabora-tively to understand how we implement fewer more meaningful product innovations that will deliver the same level of category growth. That is the challenge.

There’s a different defi nition [of wellness] from the McKinsey Health Center, which defi nes wellness as “a state of optimal well-being that is oriented toward maximizing an individual’s potential.” And this is a life-long process of moving toward en-hancing your physical, intellectual, emotional, social, spiritual and environmental well-being. And I think it’s within that space ... that beauty products come in. — Joel Carden, Pacifi c World

I think that you can look at wellness more on a spectrum now. ... The question was asked earlier on: “How many people are well right now?” You could be well, but maybe you haven’t had a good night’s sleep the last few nights. So there’s an opportunity to improve that. And not getting a good night’s sleep can lead to things like not looking as good, not feeling as energized, not feeling as inspired as you normally would in the morning. And so that’s the holistic element of it. — Ron Schone, Pfi zer Consumer Healthcare

Now we’re starting more on an incubator type of program, speaking to individual retailers and then growing from there. We believe that will be more successful in the future.

Van HoWe: It’s very apparent from what we’re hearing from the panel right now there’s a high-risk but maybe low reward, or ROI, on bringing product innovation to market. So what [are] the new metrics? What are the metrics that are re-ally meaningful to you to say that this product truly brought incremental value to my store?

Jetta: Well, I would say you can measure in-novation performance, so we’ve developed what we call an innovation index, which is a measure of quantity, quality and uniqueness. And for uniqueness, we use incrementality as a proxy for that dimension. Where buyers and merchants truly make their money is being able to understand and have that intuition on what their truly successful new products are. But the things that we can measure with a high degree of predictability are certain things like a larger size of a popular product — not very glamor-ous, but if it’s offered at a signifi cant discount to the consumer, that’s about as low-hanging fruit and incremental of the category, incremental of the brand and highly productive as you can get.

We’ve also seen packaging in variations, so all the gum innovations on canister versus the pack have also been pretty successful. Then the third area that it’s had a consistent level of suc-cess [are] premium-priced products. So what-ever your current price is, if you just fl ank it with the same price points, that’s usually not a formula for success. If you have something premium-priced that’s a value add, that’s much higher profi tability.

Van HoWe: Jason, in a format such as club stores with a limited assortment, your metrics have got to be very robust.

reiser: Yeah. I think it gets back to loyalty. I’ll go back to also my Walmart days. You want to talk about innovation, one of the best inno-vative items — actually should have been on your list because I know the sales at Walmart alone would have made that list — is custom-fi t orthotics [by Dr. Sholl’s]. What was really cool, fi rst of all: There’s nothing — I mean, the insole is as old as the shoe. So there wasn’t re-ally a lot of innovation there, other than the fact that it’s personalized, No. 1. Plus you had an experience to buy it.

The other innovation was some executional innovation — literally. Merck took out every roadblock there was to putting that kiosk in, every bit of risk. You want to talk about part-ner; they stepped up to the plate. They talked about [how] they would pay for electricians, they would pay to remove it, they would pay to service it, [and] they would do all those things. … I would tell you that kind of innova-tion truly paid off, and I think it drove loyalty.

And you want to talk about incrementality — in the stores that had that kiosk, you could chart other foot care sales rise along with it. And that’s something that we asked someone who was normally paying $9 for an insole to pay $50, and then we actually got them to spend more money above that $50. That was innovation, and that was truly incremental to the business.

Van HoWe: David, when you think about prod-uct innovation, what do you need to hear from your retailer community as to what success looks like and what the expectations are?

daVid LinsenMeier, noVartis consUMer HeaLtH: A lot of what we hear is the incremen-tality question and the source of volume ques-tion. And I think something that we, as a man-ufacturer industry, need to do more and more of is really tie the consumer messaging and the launch program to the category incrementality and the source of the volume.

So we can have a product that really deliv-ers on all of its promise. Then we have to tell people about it. That’s more and more an in-store communication and more and more an online social media communication because

they don’t really want to hear it from the man-ufacturer; they want to hear it from people they trust. And then of course that has to de-liver on the promise, and I think [if] you look at the statistics on all the products that didn’t deliver; they didn’t deliver the sales, a lot of them didn’t deliver their promise. People tried them and didn’t get the results — we talked about some examples of that today. I think there was a statistic a minute ago about cough-cold products; more than 20% of people think they don’t deliver on their promise.

So it’s really those three things together:1. Have a real reason to believe there will be

category incrementality;2. Go out and deliver the consumer com-

munications through the retailer, through other consumers that support that source of volume; and then

3. Really delight the consumer when they try the product [so] they want to come back and build that loyalty.

Van HoWe: Sharon, from a marketing organi-zation, obviously you play an integral role in new product launch programs. What are your retail partners looking for in terms of success metrics and return on investment?

gLass: The playbook for generating trial on new products is changing. We are transform-ing as an organization to meet the needs of our customers and today’s consumer. For years, Catalina was only known as an in-store print-er, and the bulk of today’s consumers are still going to want that platform for receiving offers handed to them in-store at checkout. However, there is a great opportunity to reach and target the passive saver. As an industry, we need be




I think something that we, as a manufacturer industry, need to do more and more of is really tie the consumer messaging and the launch program to the category incrementality and the source of the volume. — David Linsenmeier, Novartis Consumer Health

Leonardi: The question that you guys raised was the defi nition of innovation, and [is it] only product-based or is it larger business ideas? I think it’s a combination of both, but I do think there’s a larger business idea that has to coin-cide with it, especially under this health-and-wellness umbrella that we’re talking about. And I’ll give you an example: At one of Ahold’s divisions of stores, which is out of the Carlisle, Pa., market, we have in-store nutritionists in the store. That is a solution innovation idea that the customers can come in and actually sit with a nutritionist in a grocery store to help them de-termine what they need based on their disease states, based on what they need for their health and overall well-being.

Where I think the opportunity is, is how do you tie into that from a supplier perspective, and where do you tie into that from a supple-ment perspective and OTC perspective and everything else — because it’s very focused on food today, but we’re seeing that trend change. So to me, that’s an innovation that not a lot of people have, which a customer can get, that they’re looking for, because right now they’re going to multiple places to get something. So for me, that’s as much of an innovation as any new product from the suppliers on the shelf, to offset some of the things — and I agree with Bill 100%. There’s an awful lot of work that goes into these new item introductions, and neither one of us prosper very much from it. There’s a lot of business interruption from it.

And the other piece of that is when we do have something that is an introduction that you are supporting, that the supply chain piece of that supports that. Because so often you get these great introductions and the supply chain piece can’t keep up with it. So you almost do yourselves a disservice and the retailers a dis-service by introducing a wonderful new item that really does take off, which is exactly what you want, and then there [are] problems with the supply chain. So I think that the supplier community really needs to look at that piece of that business, too, when you’re introducing [a] new innovative product and making sure that the consumer can be satisfi ed by the product that [suppliers are] introducing.

Mack: Many of the most successful smaller companies use customization as a selling strat-egy. It speaks, again to Jason’s point, of help-

ing the retailer with the loyalty objectives. And customization is a powerful strategy to achieve that goal. So what are the best practic-es of manufacturers that customize their prod-ucts and their shopper marketing programs?

carter-sMitH: I totally agree that innovation is not just product-driven, but ... consider the fact that unlike [prescription] brands, consum-er OTC brands can literally live forever. So [as suppliers], we have to continually fi nd ways to take those brands that have strong heritage and look for innovative ways to keep custom-ers engaged with those brands and to keep us-ing those brands. So I think that’s one of the key pieces to innovation, too. ...

One of the key best practices that we’ve had is we do have a portfolio of brands that have very strong heritage and have been around for a long time. So looking at how that consumer connects with the category — [it] could be shelving opportunities, digital and social me-dia connections; really anything that helps us connect with the consumer in a meaningful way along their path to purchase.

But along the lines of customization, if you look at the heritage behind GSK’s smoking-cessation products, we work with all of our retail partners to create customized programs based on their consumer that helps the 50 million smokers out there that could be shopping their store and look-ing to quit — we create customized programs for each individual retailer. So that’s one way from a brand category perspective, [for a brand that] has been around for a very long time in the OTC world and then also in the [prescription] world

before that, to be able to continue to have that live on and hopefully increase household penetration and drive category growth.

Mack: GSK has had a long history of bringing forward pretty successful Rx switch items. They and others have been very diligent in that world. Where do retailer customization or exclusive items fi t into effective new item launches?

keeLor: One of the thoughts, I think that Ja-net just mentioned, [is] visual presentation in the store. And I think that’s often overlooked. It’s still a fact that consumers don’t really en-joy going shopping for groceries or going to a drug store — it’s not really a fun experience. So I believe that one thing we can do is sig-nal the manufacturers to get in our stores and think about innovative ways to present their products. If you owned our stores, how would you visually present these products to the con-sumer in a way that speaks to them not just prominently in the store, but [also] clearly com-municates what this product can do for them from the point of view of effi cacy or whatever the solution is the product provides. Back-up information [on] where they can go and read more about this product — there’s websites, etc., there’s QR codes; priced in a way that gives the consumer a sense of value. The con-sumer is much more savvy after the recession.

The other area, I’d say, is from an account perspective. We always want to be fi rst to mar-ket and speak to the consumer on certain prod-ucts. But I don’t think every account necessar-ily would want to be fi rst on every product. There isn’t that kind of bandwidth anymore. We want to do a few things really, really well. And the last thing I’ll say is that those fi rst 12 to 16 weeks after launch are the weeks we real-ly want to win as retailers. So as you’re think-ing about customization, think about how do we get out early with that advertising display and even sampling if it’s possible, depending on the category.

scHone: I’ll add to that. It’s diffi cult to do cus-tomization. As Jason just said, anything that’s on Rite Aid’s shelves would be considered to be on Sam’s. I think where we are doing more customization, is with individual retailers to bring new products to market. And that’s where we’re fi nding we’re getting a lot more traction.

The consumer is always looking for solutions. It is a journey for them; it’s not a defi ned moment; it’s always a process. So they are constantly aware of wellness. ... And they also have choices, and they’re not afraid to exercise those choices. ... And I think the most important piece is that success is defi ned by the consum-er, not by some societal set defi nition of what success looks like. — Janet Carter-Smith, GlaxoSmithKline Consumer Healthcare

As far as what you’re calling a megatrend on the convergence, I’m not sure I accept that premise. I see actually the opposite of that. I see a couple of well-placed opportunistic products that do capitalize on that. — Kurt Jetta, TABS Group


Industry Issues Summitaware of how consumers are changing how they engage/choose products. We need to find ways to tie the decisions they are making in store directly to how we communicate to them through digital, online, Facebook, etc. Catalina is innovating in this space, and just like we do in-store, when we comb the data to find the best target and potential new trier of a brand, it will still come down to the same metrics for our digital solutions — it all has to pay out at the end of the day. When it comes to return, we tend to be held to a higher expectation because our data gives us the ability to project out the results of our targeted programs.

So it is all about quantifying upfront what the future potential of a target is, based on what their engagement is in a category and what the ultimate payout or size of the pie is for the brand. For example, if they’re spend-ing right now $100 a year in vitamins, and we know that they’re on a regimen, they’re taking vitamins every day, how do we now look at them and say, ‘OK, where’s the expandability there? They’re only buying multis and Cs; how do I get them to buy a D and A?’ Same goes for a multitude of OTC and HBW categories … through shopper data you can quantify the value and potential of your future shopper up-front and eliminate some of the risk from mass trial vehicles. It’s all about looking at the data to say, ‘OK, now where can we go from here? What is the upside? And how can we make sure that the investment pays out in the long term by doing the upfront work that is needed to really quantify the value of that shopper?’

Patricki: Dave, analyses like the source of volume analysis, should become one of the fundamental analysis components in the mea-surement process to identify whether a new product innovation was a success or not. To me, this is a really critical analysis that all man-ufacturers and retailers should understand for the new products that they have launched. It’s important to understand the percentage of the sales and buyers that are represented by new category buyers; current buyers that increased their category buying rate as a result of the new product purchase; and also the level of sales and buyers that were sourced from other brands in the category via brand switching.

A significant opportunity that I see emerging for retailers and manufacturers as it relates to

measuring the success of new products is related to the retailers’ loyalty card databases that they are developing and making broadly available to the manufacturer community. Mining the loyalty card data and specifically looking at the top three decile (30%) shopper groups that represent 70% to 80% of the retailers’ total store market basket dollars will become the norm over time. Evaluat-ing the source of volume metrics within this con-solidated subgroup of shoppers that are the most important, loyal, repeat shoppers for that retailer is where the new product success measurement process starts to have some real impact. I think there’s definitely some upside in terms of where the manufacturing community is now in terms of the scorecard insights that they bring to the retailer in measuring the performance of their new product launches. Improving the measure-ment process to provident, more robust insights and learning relative to the performance of new product launches in the current state will help optimize the products that manufacturers and retailers launch in the future state.

Mack: One last question for the retail executive panel: What are the biggest blind spots that ev-erybody in this room is not aware of? What’s a blind spot in how they engage you or how they operate? What is a reoccurring blind spot?

toMPkins: I’ll go back to actually the prior con-versation. I’m always surprised by surprises. And what I mean by that is when I get the call after my CMM and DMM have gotten it, I can’t believe we’re being cut out. How could that be? How could we not be aligned on the success-ful metrics of an item upfront? And with all the data available to us, be tracking to that and be reacting, and purposely, aggressively reacting to that data before getting to the point where there’s a surprise. So I think what I would ask is, please work with our category managers to be aligned on what success is upfront.

Bergin: Specifically as it relates to new item as-sortment, I think a true blind spot is an aligned understanding of success. One of the real sources of frustration between retailers and suppliers comes at planogram review time. As a part of that review, a supplier is apparently blindsided by the fact they will be having SKUs discontin-ued. My suggestion to suppliers is to understand early in the process how their items are perform-

ing. Have a clear understanding whether they are meeting category managers’ expectations. If they are not, implement plans earlier in the process to improve performance because by pla-nogram review time, decisions are already being finalized. Be more proactive as you head into the planogram process. Understand items that are potentially at risk while there is still an opportu-nity to react. Neither party should be surprised as part of the planogram review process.

Leonardi: I have one quick comment to add. I guess from my perspective, the first thing I would say is go in with the spirit of collabora-tion. Lots of suppliers say collaboration, but they have a hard time doing that sometimes. So I think truly going in with a collaborative mind-set would be the first thing.

And the second thing I would say is know the retailer you’re going to; know what their strate-gies are, know what their priorities are. Tie your-selves to them; make sure what you’re introduc-ing ties to that retailer’s strategies and objectives, because that’s what they’re looking for. And if you don’t do that, you’re going to struggle. If you don’t know the retailer, if you don’t know what their strategies and objectives are, ask. A lot of them are very happy to share them with you; they would prefer you to be aligned with them than not aligned with them. So those would be the two things I would say — blind spots I would say. There are some suppliers who don’t always necessarily know what those are, and it goes a long way when you’re sitting at a table that you’re going to help me, you’re going to help our organization with our strategic priorities.

keeLor: From an innovation perspective, when we’re listing an item as a retailer, mutually agree-ing on what sort of sales volume — whether that’s linked to your basket and your customer base or just sales — and how soon are we going to hit that number and what happens if we don’t (i.e., what’s the exit strategy)? And oftentimes, as manufacturers, I’m sure you’re at the receiving end of this with an item we’re taking out, but at other times, it’s an item of yours we’re putting in. So I find we don’t really discuss, from a category management perspective, when we’re listing an item, we don’t talk about the delisting strategy should this product not perform and let’s agree on that too. I think that could really speed up basic planogram execution. l

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Industry Issues and wellness. ... Bill, your organization, Rite Aid, is doing some great things...

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