Customer data is a key input into product development and marketing campaigns, but good customer data has also been historically difficult for consumer healthcare companies to attain. As pressure increases to find new sales channels and innovative marketing techniques, specifically to combat the Amazon effect, more consumer healthcare companies are exploring e-commerce and digital platform investments to create competitive differentiation.
There are a significant number of benefits of direct-to-consumer platforms that consumer healthcare companies are beginning to invest in. After all, by selling directly to the consumer, companies maintain a better brand control because they have final approval over the entire online presence. Consumer healthcare companies are also able to own the entire customer experience which limits the patient’s ability to compare your product directly to competitors. As a business, you are also able to directly access detailed customer data and build direct relationships with your customers. These key benefits are some of the driving factors behind the trend in consumer healthcare for companies to build digital and e-commerce platforms.
In 2018, over-the-counter products will become more available on e-commerce platforms. Branded products such as Advil, Mucinex, and Nicorette are currently sold on Amazon and other retailer’s websites with fluctuating prices determined by the manufacturer. In February 2018, Amazon launched their own line of generic over-the-counter products, Basic Care, which includes 60 products ranging from pain relief to hair regrowth treatment. Compared to CVS, Walgreens, and Rite Aid, Amazon’s Basic Care offers healthcare products at a fraction of the price of branded products. Amazon’s decision to enter the consumer healthcare industry has both manufacturers and retailers thinking about how this impacts their digital and growth strategies. We have seen that CVS, Walgreens, and Rite Aid are all pursuing an acquisition strategy to protect themselves from the Amazon effect.
Another area where consumer healthcare brands are innovating in the digital space is with commonly used consumer apps. In 2017, Johnson & Johnson relaunched their Tylenol Rapid Release Gels with the help of Walgreens and Waze, the California-based navigation application. The intention of this unique partnership was to get the consumer safely and quickly to the nearest Walgreens when a sudden headache comes on. When the patient arrived in store, Tylenol marketing was embedded in end-caps to motion-activated video units built into the shelves. Upshot Agency, the marketing agency responsible for this campaign, reported the campaign reached 25 million users and resulted in category growth and Tylenol sales growth in Walgreens. With more over-the-counter products making their way onto e-commerce platforms, you can expect to see more retailer and manufacturer digital collaboration to drive foot traffic to the stores.
Marketing teams at consumer healthcare companies face multiple threats to address from a shrinking retail channel, increased competition from generic products, and pressures from neighboring categories like health and beauty and pharmaceuticals entering the market. In addition to battling these threats, consumer healthcare companies also have their traditional goals of brand building, market expansion, and driving product innovation. Embedded in these threats and opportunities lies an increasingly complex marketing mix which much includes new marketing techniques, like influencer marketing, and a strong digital and e-commerce strategy.