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Marketing no longer about mobilizing the masses, but about amassing the upwardly mobile

BY Michael Johnsen

Geoscape issued a report projecting the future buying power of both Asian and Hispanic households, respectively. Both groups will spend far more in their remaining lifetimes than white non-Hispanic households. 

This report should serve as a wake up call that multicultural marketing efforts that appeal to the diversity of a shopper base are not just innovative strategies — they’re also essential. 

Marketing has always been about mobilizing the greatest number of consumers to buy. And an homogenized marketing message strategically placed against a mass media outlet times frequency used to do the trick. Not anymore. That collection of consumer eyeballs has been fracturing into smaller and smaller segments ever since cable TV was first introduced decades ago. That fracturing has only accelerated as consumers learn how to better personalize their media consumption through smartphones and tablets. 

Today it’s about mobilizing the greatest number of consumers to buy within each fragment. 

It’s already being done. Walgreens just last week opened a flagship location in Washington, D.C. at the entryway to the district’s Chinatown. And while casual walkersby may not take notice, the Walgreens logo on the exterior includes characters that translate into "pharmacy" in both Mandarin and Chinese. And many retailers like Target are generating separate creative specifically targeting the Hispanic population when constructing their media campaigns. 

Here’s why: According to the recent State of the Asian-American Consumer report from Nielsen, the Asian-American population totals 18.2 million today, with 1.4 million households with median incomes greater than $100,00. And the Hispanic-American population numbers more than 52 million, with 1.8 million households generating incomes greater than $100,000. That represents a 51% growth in the number of Asian-Americans and 50.6% growth in the number of Hispanic-Americans between 2000 and 2012. 

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Clinic growth likely to gain steam amid shift to chronic care services

BY Antoinette Alexander

Retail clinic operator Take Care Clinics, which is owned by Walgreens, is expanding the scope of services within its 300-plus clinics to include management for such chronic conditions as hypertension, diabetes, high cholesterol and asthma, as well as additional preventive health services.

Game on! With the increasing shift to chronic care services, expect retail clinics to ramp up even quicker, creating new, more profitable revenue streams and filling huge gaps in care that save payers some serious money. The writing isn’t just on the wall. It’s printed in big, bold colors like graffiti on a 1970’s New York City subway car.

Retail-based health clinics have already been experiencing a ramp up in visits and the ramp up is likely to gain additional steam. As previously reported by Drug Store News, a Rand Corp. study found that visits to retail medical clinics increased four-fold from 2007 to 2009, with the proportion of patients older than 65 years of age growing from 8% to 19% of all visits during this period. Visits to retail clinics reached 5.97 million in 2009, up from 1.48 million in 2007.

According to the study, the proportion of retail clinic visits made for acute medical problems dropped from 78% to 51%, and there was a corresponding increase in visits for preventive care, making up more than 47% of visits by 2009.

Researchers also noted that retail clinics have started promoting new services such as caring for chronic illnesses, including diabetes, and that if demand for primary medical care drives longer wait times to see a physician — like it has following healthcare reform in Massachusetts — then retail clinics could see even greater demand going forward.

In addition to Take Care Clinics, MinuteClinic has also been working to expand its focus beyond acute ailments and, through its expanded collaboration with Caremark, is proving to be an important “integration sweet spot” for the entire CVS Caremark enterprise. 


Non-acute care is MinuteClinic’s fastest-growing segment, due in large part to the rise in chronic diseases and the primary care physician shortage that is plaguing the nation. The company has stated that it expects non-acute visits and non-flu vaccinations to reach 25% of its services over the next five years.

As we stated earlier … game on!
 

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Walmart in-stocks: same story, different decade

BY Mike Troy

Empty shelves at Walmart are getting a lot of attention these days, but the situation isn’t new and can’t be blamed entirely on store staffing levels.

Reports in Bloomberg and the New York Times have both detailed Walmart’s shortcoming when it comes to keeping products on shelves. And both reached the same conclusion that the issue is related to a reduction in staffing levels. It is a convenient and easily understood explanation because if there are fewer associates working there is less time available to perform the essential functions of running a retail business, namely keeping shelves stocked and accepting payment from customers.

The fact that Walmart is struggling to keep its shelves stocked is not a new development. Retailing Today documented the company’s difficulties with an in-stock study in 2003. Back then, the company regularly vowed to Wall Street that it would grow inventories at half the rate of sales because it was focused on improving its return on assets.

We suspected pursuit of that strategy might put a strain on the company’s supply chain and leave store backrooms with little safety stock to accommodate demand spikes associated with promotional efforts. Then, as now, Walmart’s supply chain was touted as state-of-the-art and a source of great competitive advantage.

The methodology involved picking 12 items across a range of categories that were featured in what was then a monthly circular that appeared in May 2003. Editors conducted simultaneous store visits the day after the ad first appeared at 12 locations in New York, New Jersey, Atlanta, Tampa, Dallas, Chicago and San Diego.

Walmart’s performance was abysmal with the items featured in the ad in stock only 77% of the time. In hindsight, the methodology of the study was skewed to allow Walmart to fare better. The items included were those featured in an ad so stores presumably would have received adequate inventory levels days if not weeks in advance of the ad breaking to accommodate increased demand. In addition, the survey was conducted on a Thursday after the ad broke on Wednesday, again giving Walmart an advantage because the stores had yet to experience peak weekend traffic.

And still the company scored 77%.

“We are not pleased with these results. Our goal is to have every featured item in stock for the entire length of the circular, and we go to great lengths to make this happen, including tracking individual shipments of featured items,” former Walmart spokeswoman Melissa Berryhill explained at the time.

We thought the exercise was interesting so it was repeated in January 2004. The methodology was the same and the results were improved to an 85.6% in-stock rate. While substantially better than the 77% the company scored eight months earlier, finding some of the items was so difficult they fell short of the company current definition of in-stock known as “on shelf availability,” or OSA.

“The bottom line is that Walmart’s in-stock score improved from the last time the survey was conducted, but inconsistent store level execution of many of the details associated with promotional programs continue to fall through the cracks,” is how Retailing Today described the situation.

So what’s changed in 10 years time? Walmart’s stores are still busy as ever, shoppers find the combination of low prices on a broad assortment incredibly powerful and employees continue to grouse about how there aren’t enough of them to do all the work. The big difference is the in-stock situation is probably better now than it was back then, but Walmart was barely on the radar of outlets such as Bloomberg and the Times, employees and customers weren’t able to vent via social media and candid conversations company executives had about opportunities to improve were shared less frequently outside the company.

None of this is meant to excuse Walmart for occasionally atrocious in stock levels that annoy the hell out of shoppers, erode trust in the company and results in lost sales. Achieving high in-stock levels is a perpetual challenge for all retailers and most would rather be in Walmart’s situation, figuring out how to keep shelves full rather than devising strategies to generate traffic and get shoppers to buy stuff.

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