Innovation in health and wellness: the industry experts’ view

By Tom Block, dunnhumby’s Sector Lead for Health, Beauty and Retail Pharmacy.

While dunnhumby’s annual summit with our retail partners from around the globe featured a range of great insights and discussions, one of my personal highlights was being able to speak to experts from some of the world’s leading retail pharmacy and grocery businesses and get their thoughts on the macro trends shaping the future of the industry.

During an engaging group session, our panel fielded three great questions from the audience, sharing their views on everything from the challenges of change through to the opportunities of growth. With huge thanks to our participants below, here are some of the highlights from our conversation.

• Deirdre Zimmermann – Chief Customer Experience Officer at The Raley’s Companies
• Erik Keptner – Chief Merchandising & Marketing Officer at Rite Aid
• Martin Turcotte – Vice President Merchandising at Metro Grocery
• Vitor Bertoncini – Executive Marketing Director at Raia Drogasil

 Q: What do you see as the most significant and enduring change, and how do you best position your business to accommodate it?

• Deirdre raised the issue of ecommerce, noting that Raley’s had seen its app downloads increase by more than 400% in the first month of the pandemic alone. To keep up with the demand, Raley’s hired 9,000 new team members in 2020 to assist in picking ecommerce orders in addition to other tasks and acquired one of its last mile delivery partners to control the customer experience, end-to-end.

• For Erik, the focus has primarily been on the rise of self-care. Consumers are looking beyond traditional definitions of health, he noted, and seeking alternatives to prescriptions in order to proactively look after their wellbeing. To meet those needs, Rite Aid has reengineered its pharmacy workflows, allowing more time for customer engagement, as well as giving its pharmacists ongoing training on conditions that are important to its target audience.

• Rising customer expectations were on Martin’s mind, particularly the fact that many seem to be reassessing their priorities and making clear decisions about which retailers they choose to shop with. Metro’s own focus has been on ensuring that people feel safe when they visit a store, he said, though other issues are also important – contactless technology, convenience, and delivery speed amongst them.

• In Brazil, said Vitor, two major changes have taken place. The first is around digital, with ecommerce sales growing from around 2-3% pre-pandemic to 10% today. That has seen pharmacy evolve from an offline convenience channel to an online convenience hub. At Raia Drogasil specifically, customers have also come to see the banner as a healthcare provider – driven by its involvement in Covid tests and vaccinations.

Q: There’s been a larger trend of customers taking a proactive role in their health, and that of their families and loved ones. How can a retailer leverage loyalty to meet those health and wellness needs?

• There is a growing need for retailers to move away from transactional relationships with customers, said Erik. There is no greater driver of loyalty than human-to-human interactions, he explained, noting that highly engaged pharmacy teams have been shown to yield a highly engaged customer base.

• Customers are showing clear signs that they want to change their health behaviour, continued Vitor. As a result, pharmacies have the opportunity to position themselves as the affordable, reliable partner that can help them meet that goal. Loyalty presents a huge opportunity to become the local health hub for the community, he said.

• For Deirdre, the answer to this question tied into Raley’s focus on educating consumers and helping them stay the course on their health journey. The company’s loyalty programme has helped it create segmentations around health and wellness purchases, she noted, allowing them to tailor assortments by store to meet customer needs more effectively.
• Retailers need to focus on a more holistic approach to health, suggested Martin, supporting not just physical and mental wellbeing but issues like nutrition, sleep, immunity, exercise, work-life balance and more. Their role should be to educate, inform, and reward customers for choosing a healthier lifestyle, he said.

Q: How do you decide what and where to grow, as well as what to streamline and consolidate for the benefit of customers?

• Erik explained that Rite Aid uses three filters to help it understand where to focus. These include its enterprise purpose, which is to help customers achieve whole health for life. The second is its brand proposition, which allows the company to filter opportunities based on the extent to which they enable pharmacists to be an ally on that journey. The third is Rite Aid’s target growth customer, he said, which has seen the company expand its offering based on the needs of a highly specific segment.

• Vitor noted that Raia Drogasil has been focused on building a connected ecosystem for its customers. One of the key developments here has been the creation of Vitat, a digital platform that helps customers create personalised wellbeing programmes linked to in-store clinics. The company’s loyalty programme underpins the entire operation, delivering segmentations and recommendations that enhance the customer experience, while also dramatically reducing the cost of acquisition.

• Martin pointed to the launch of Metro’s “My Health, My Choice” programme, something that is designed to help customers make better choices about food based on their lifestyle and health conditions. A panel of nutritionists was used to identify around 60 health and wellness attributes on products, which are surfaced both on shelf tags and Metro’s mobile app. Customer data is being used to see which products and attributes are trending up or declining, something that is then used to influence assortment.

• At Raley’s a similar shelf attribute system is being linked with loyalty data to help shape assortment and store formats, said Deirdre. In addition to the company’s pharmacy business, Raley’s has also launched a dietician-run health programme that offers loyalty members one-to-one consultations, classes, and store tours if they’re interested in exploring a holistic approach to health.