If there was one constant theme throughout the Consumer Healthcare Products Association’s Annual Executive Conference (CHPA AEC), it was change. Change and disruption are transforming the consumer healthcare industry from multiple facets; forcing companies to adapt and innovate at an unprecedented rate to compete and win. During the CHPA AEC conference, discussion topics covered changes in buying behaviors, monograph reforms, technology innovations, and MA&D activity in the consumer healthcare industry. The opportunity in the consumer healthcare industry is abundant, however, with so much change, it can distract companies and potentially spread brands too thin. To succeed in a changing marketplace, consumer healthcare companies need to remain true to their value proposition, provide transparency to consumers, and focus on their core capabilities.
Some companies are just beginning to understand millennials and it is already time to start thinking about the next generation. The Centennials, age 0-19, who are already spending, will function differently than other generations. By recognizing, acknowledging, listening, and understanding this new generation and taking a proactive generational management approach, consumer healthcare companies will be able to position themselves for long-term success. We hear so much about millennials, but generational management is just that, it spans all generations. Take the baby boomer generation for example, they are spending money on themselves, their parents, and their children, thus shopping for three generations.
Consumers are changing how they approach healthcare and are leaning into preventative care more than ever before. As the baby boomer generation continues to age, preventative medicines highlight a new opportunity for products, focused on enabling the lifestyles baby boomers seek. Each generation is unique in shopping habits and unique in their healthcare concerns. Consumer healthcare companies must use a multi-pronged approach to reach their consumers by generation, through individual opportunities for personalization, and identifying the path to purchase.
Digital Disruption & Personalization
People are quick to say that acute needs don’t fit into a world of voice ordering, but we heard loud and clear that the time is now. Traditionally, consumers head to the store when a cough or cold arises to treat their symptoms. The customers of tomorrow may be using delivery services and even drones to bring over-the-counter products to their bedside. According to IRI at CHPA AEC, outside of acute needs, the rise of subscription services could impact the foot traffic visiting retail stores and the consumer healthcare industry needs to think critically about how macro retail trends and impacting the consumer healthcare industry directly. For example, retailers are leveraging digital to drive in-store experiences; consumer healthcare companies should leverage digital to create a personalized experience for multi-channel shoppers. In addition, consumers are researching ingredients and products prior to shopping, willing to pay a premium for brands they trust, and the industry is seeing unprecedented growth in small, niche brands.
IRI also identified that consumer healthcare growth is outpacing the growth of prescription drugs. This growth is highlighted by two primary drivers, the first is growth across all consumer healthcare categories and the second is the high growth consumer healthcare is seeing in eCommerce. The first driver is the emphasis from consumers on self-care, prior to a visit to a doctor or urgent clinic. The second driver is the evolution of new purchasing habits as consumers are turning to digital channels to purchase products. Despite growth in each category across the industry, the other trend to consider is that store brands are outpacing branded products and small niche brands are seeing higher levels of growth in some categories. The disruption that the overall consumer products industry is seeing related to small- and mid-sized companies is also impacting the consumer healthcare industry.
Staying connected to shoppers will allow consumer healthcare companies to proactively tailor their strategies based on changing consumer trends. With the level of retail disruption occurring, consumer healthcare companies need to build personalized relationships with consumers to increase brand loyalty. When dealing with different generations of shoppers, who have different habits, needs and paths to purchase, consumer healthcare companies can find opportunities in technology and traditional offline marketing to customize their shopper journeys.
Opportunities in the Marketplace
Change can be overwhelming to consumer healthcare companies. However, the industry needs to shift to a proactive versus reactive approach to the market. Companies are either doubling down on their commitment to the industry, or selling consumer healthcare divisions, to align with the overall company mission and value proposition. With so much activity in the landscape, it can be difficult to know what to react to and how quickly.
Thinking about the opportunities discussed at CHPA AEC, we’ve highlighted a few opportunities that consumer healthcare companies can consider:
- Do you have a plan for how you’ll use artificial intelligence to drive your business strategy? There is so much data, but companies need to determine how to best use the information to drive strategy and competitive advantage. What if your salesforce was able to use predictive analytics to help determine which meetings they should schedule and the topics that should be covered? Do you have the data to support personalized shopping journeys and cross-channel marketing strategies?
- How aligned are your sales and marketing organizations? Traditionally, sales and marketing haven’t always worked hand in hand. With the growth of eCommerce and the convergence of the physical and digital channels, these two business functions should be working as one, aligned with common practices and incentives. Digital spend often falls to the marketing budget and trade spend with sales. If you consider eCommerce as shelf space, is your budget properly allocated?
- How is quality and the role of quality viewed in your organization? While we anxiously anticipate a deep dive on quality related topics at the CHPA RSQ Conference in May, consumer healthcare companies who have a business approach to quality increase safety, minimize risks, drive down costs, protect their brand, and most importantly, protect and build-trust consumers. Do you have quality metrics in place that drive decision making in your organization?
Thank you to The Consumer Healthcare Products Association (CHPA) for hosting the 2018 CHPA AEC, a forward-thinking and industry-leading event. If you have found this information valuable and would like to receive future insights about the consumer healthcare industry, subscribe to our insights below.