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Expect business opportunities, innovation at 2012 NACDS Marketplace

BY Antoinette Alexander

DENVER, Colo. — The 2012 National Association of Chain Drug Stores Marketplace Conference will kick off this weekend, boasting business programming and opportunities, as well as a glimpse of the innovations and programming that are in store for NACDS’ Total Store Expo that will debut in 2013.

This year’s Marketplace Conference will be held June 23 to 26 at the Colorado Convention Center.

This year’s conference boasts top-notch business programming and opportunities, as well as a glimpse of the innovations and programming that are in store for NACDS’ new trade show and strategic exchange.

"Business opportunities abound at the NACDS Marketplace Conference, and attendees can look forward to those same opportunities and more at the NACDS Total Store Expo. NACDS has maintained its commitment to deliver a value-packed NACDS Marketplace Conference in 2012, with returning popular features such as Meet the Market and Meet the Retailer, while presenting new features such as the Digital Learning Center that will present educational opportunities right on the exhibit hall floor," NACDS president and CEO Steve Anderson said.

The NACDS Marketplace Conference offers industry leaders from drug, food, mass and specialty retail an opportunity to do business. Attended by more than 230 retail companies, more than 145,000 retail outlets and $500 billion in annual buying power are represented at the conference.

The "Meet the Market" program is an institution within the Marketplace Conference, pairing suppliers and manufacturers with corresponding retailers for individual appointments. More than 8,000 appointments are expected to take place during this one-day program.

Another important cornerstone of the Marketplace Conference is the "Meet the Retailer/How to do Business With…" program. These sessions provide suppliers an opportunity to hear first-hand from retailers about effective strategies for taking their products to market. This year’s participating companies are 99 Cent Only Stores, Chain Drug Consortium, Costco, CVS Caremark, Family Dollar Stores, Meijer, Rite Aid, Safeway, Sam’s Club and Walgreens.

A new feature is an educational resource that will be made available on the exhibit floor of the Marketplace Conference. The NACDS Marketplace Digital Learning Center, which will be located just inside the exhibit hall floor near the New Product Showcase, will offer retailers and suppliers an understanding of the importance of developing and implementing a cohesive digital strategy. NACDS will partner with technology solutions company Inmar — an NACDS associate member —­ for this interactive educational resource. Seminars, hands-on displays and one-to-one meetings will be available for attendees to further explore digital business opportunities.

"As NACDS looks ahead to its new show ­— the NACDS Total Store Expo in 2013 ­ innovative educational resources, such as the Digital Learning Center, will continue to be utilized to help retailers and suppliers see the value and impact of NACDS conferences and meetings in their day-to-day businesses," Anderson said The NACDS Total Store Expo will debut Aug. 10 to 13, 2013 in Las Vegas.

Additional conference highlights include:

  • The Marketplace Conference mobile web-based application, or "app," offers a toolkit for conference attendees to enhance planning and the overall experience for the conference. Sponsored by The Emerson Group, the app provides attendees with the schedule of events, alerts, exhibit floor maps, speakers and photos at their fingertips.
  • New Product Showcase — Exhibitors can have their products prominently displayed in showcases on the floor of the exhibit hall. The showcase participants also will have their products featured on the Marketplace Conference website. A winner will be selected for each product category and announced during the conference on Tuesday, June 26.
  • On Monday, two educational programs will offer attendees important insights on consumer shopping. Navin Gautam with SymphonyIRI Group will present "Inside the Mind of the Shopper: Understanding the Difference in Motivation by Generations." John Carroll will lead a panel discussion called "Game-Changing Marketing: Best Practices for a Digital World." Panelists will include John "JD" Doughney with Coca-Cola, Mike Haines with Facebook and Michael La Kier with Coca-Cola.
  • At the conclusion of the conference on June 26, NACDS will partner with local charitable organizations to donate products from exhibitors. The donation is scheduled for Tuesday, June 26 following the closing of the conference, beginning at noon. Collection bins will be placed in the aisles throughout the exhibit floor.

"NACDS looks forward to continuing to showcase the value and opportunities in store for the NACDS Total Store Expo next year," Anderson said. "Next stop: the 2012 NACDS Pharmacy & Technology Conference, which will also be held in Denver, Aug. 25 to 28."

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Consumers to cautiously open wallets during BTS season

BY Antoinette Alexander

WHAT IT MEANS AND WHY IT’S IMPORTANT — Good news for retailers and manufacturers of back-to-school supplies! A recent PriceGrabber survey found that nearly half of U.S. shoppers plan to spend more dough this BTS season. But wait, there is a catch: The study also found that they don’t plan to spend it all at once.

(THE NEWS: More consumers plan to boost spending during BTS season. For the full story, click here)

Specifically, 55% of consumers plan to spread out their back-to-school purchases this year.

In line with the quick trip mentality that has consumers trading big shopping trips for more smaller trips, where they don’t have to plunk down a whole lot of money at once, drug stores should be able to pick off more of these trips this year if they communicate strong values in BTS during the prime selling weeks — and every year it seems to start a little earlier.

As reported by Drug Store News, SymphonyIRI Group released a report in the second half of 2011, which indicated that cross-channel shopping is alive and well. The report found that, across CPG channels, purchase frequency increased 2% during the past year, with grocery, dollar and club channel trends closely mirroring industry average. Across other channels, though, trends significantly vary. For example, frequency within the drug channel accelerated sharply within the last year, increasing by 6.7%. This growth is being driven by a number of factors, including shifting trip mission trends. Quick trips, small "need-it-now" excursions with an average basket size of less than $40, have become more common as consumers look to minimize large one-time outlays of cash, SymphonyIRI SVP marketing John McIndoe reported.

WHAT DO YOU THINK? As a retailer or a supplier, where do you think the greatest opportunities exist for this BTS season and how do you plan to fully leverage BTS? Post your comments below.

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How Walgreens-Alliance Boots deal is future of drug store retailing

BY Rob Eder

WHAT IT MEANS AND WHY IT’S IMPORTANT — As much as CVS created a category of one for itself with its vertically integrated retail pharmacy-pharmacy benefit manager-clinic model, Walgreens has cast itself in a category of its own: A pharmacy-driven, global health-and-wellness company with the purchasing strength of more than 11,000 stores.

(THE NEWS: Walgreens, Alliance Boots to merge. For the full story, click here)

This is a play for the future of drug store retailing. Let’s face it: Pharmacy margins continue to take a pounding, as payers — public and private — continue to whittle away at reimbursement levels, and seemingly more and more entities are willing to sell the same script for a cheaper price. DSN has been saying it for years: The drug store of the future will have to become known for something else than just the ability to fill a script, because that part of the business is becoming more and more commoditized every day. As the largest single purchaser of prescription drugs in the world, with a global pharmaceutical wholesale operation to match, in-house manufacturing capabilities in over-the-counter health and wellness and generic drugs, Walgreens-Alliance Boots will have a whole lot more leverage on that side of the business.

But that’s just one aspect of the deal. There are other reasons you have to like it. For instance, it creates a myriad of other reasons for customers to want to shop Walgreens.

One area in which Walgreens will benefit immediately is in its private brand initiatives — not private label, but private brand. One factoid that may have eluded many of those who were on the June 19 conference call announcing the deal: Boots has an R&D group with 400-plus associates in Nottingham that is constantly at work on private brand innovation. Walgreens has taken steps in this direction in recent years with the creation of brands like DeLish and Nice!, but Boots has long been acknowledged for its private health and beauty brand development, with a long, rich tradition dating all the way back to the launch of its No 7 beauty brand in 1935. In addition to No 7, it also features the Boots Pharmaceuticals (OTC), Soltan (sun care), Botanics (natural skin care), Boots Laboratories (anti-age partnership with Procter & Gamble) and Almus, which currently makes generic pharmaceuticals in five European countries. Given the market for multisource generic pharmaceuticals and future projections, having an in-house generic pharmaceutical manufacturing capability would be a decided advantage for a drug store operator.

This is about the future of drug store retailing. If you want a sense of what the future will look like, take a look at Walgreens’ revenue mix today and how the company expects that to change over the next five years. Currently, Walgreens’ total sales tops about $73 billion for the trailing four quarters through May 31 — about two-thirds of that is in pharmacy. In 2016, Walgreens expects sales of the combined companies to total more than $130 billion, and the pie is reshaped drastically, with only about one-third coming from its U.S. Pharmacy business. That looks a lot like the Boots revenue mix today: 35% of sales come from dispensing. Beauty accounts for 32% of sales and about 60% of profits, Alliance Boots group finance director George Fairweather noted.

Make no mistake, when this deal was announced Walgreens emerged into a category all of its own.

WHAT DO YOU THINK? Do you expect to see more of these types of international deals? Maybe a U.S.-Canadian connection? Something in South America perhaps? Post your comments below.

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