Q&A: Successful Marketplace
As 2012 NACDS Marketplace swings into action, Jim Whitman, SVP member programs and services, and Steve Perlowski, VP industry affairs and member relations, talked with Drug Store News about the highlights of this year’s event and how attendees can make the meeting a success.
DSN: How can retailers and suppliers make the most of this year’s event?
Jim Whitman: We are continuing and improving some of the standards, like Meet the Market on Saturday and our Meet the Retailer on Sunday, as well as on Monday the addition of two educational programs that we will be doing. …
Meet the Market on Saturday has become institutionalized and is one of the distinguishing factors of Marketplace. … On Sunday, we have an excellent lineup [of retailers and speakers from those retailers], and it represents the industry in terms of traditional food, mass, drug, dollar, [etc.] …
[Meet the Retailer] has turned into something the retailers really look forward to doing because it is a great way to put their company forward … [to discuss with suppliers] the company’s goals, how they are looking at business [and] how [they approach business], not only at Marketplace but … throughout the year.
DSN: What are some new elements that attendees will see this year?
Steve Perlowski: Just like a retail store, the exhibit hall is full of products, services, information and education. To enhance that, this year we are going to have a [digital learning center] where we are working with one of our associate members, a company called Inmar. … They are going to have, just inside the exhibit floor, a learning center where they are going to put on presentations during the day on the floor … talking about how consumers use social and mobile, both at home and in the store; how it works in the store from a cash flow standpoint; and how you analyze whether or not the campaign was successful. …
Then on Monday morning, we will have two education sessions.
The first [session is] titled “Inside the Mind of the Shopper: Understanding the Difference in Motivation by Generations,” … [and] attendees will find out how differently you need to connect with consumers based on what generation they are in. …
The second session is called “Game-Changing Marketing: Best Practices for a Digital World.” As more and more of our members are looking at how to drive significant sales increases, the whole concept of digital and social are top of mind. We are partnering with Coca-Cola and Facebook. … It is the first time we’ve had Facebook at any of our events.
I agree with Jim Whitman that Meet the Market has become one of the most important events in the industry. I would love to see the emergence of a 2-day or 3-day Meet the Market format where suppliers would meet with more retailers and more retailers would meet with more suppliers. I would encourage all of my consumer branded clients to attend and fully participate with top notch preparation. I would also encourage all retailers to do the same! www.biernbaum.com
Study: African-American, Hispanic shoppers rapidly adopting shopping technologies
DENVER — Looking to target multicultural consumers in today’s tech-savvy environment? If so, then you’ll be interested to know that, according to a recent study, African-Americans and Hispanics are adopting new shopping technologies at a faster rate than Caucasians.
According to the latest issue of "The Checkout," an ongoing shopper behavior study conducted by The Integer Group and M/A/R/C Research, African Americans and Hispanics are adopting new shopping technologies at a faster rate than Caucasians, with 18% of African-American shoppers and 16% of Hispanic shoppers using their mobile device to make purchases as compared with 10% of Caucasians.
African-American shoppers (21% versus 13% of Caucasian shoppers) use their phone to read product reviews and maintain shopping lists and Hispanic shoppers (20% versus 13% of Caucasian shoppers) use their mobile device to compare prices on products, according to the study. Despite smartphone penetration skewing lower among African-Americans and Hispanics than Caucasians, both are leading the charge by using mobile as a means to access the digital world of shopping aids.
"Basic mobile communication through SMS and mobile websites should be the points of entry. Mobile marketing to multicultural shoppers is a huge opportunity," stated Martin Ferro, senior account planner for Velocidad, a Hispanic promotional, retail and shopper marketing capability of The Integer Group.
Additional findings on mobile shopping from "The Checkout: "
Almost as many shoppers are using coupons from email and e-newsletters (49%) as they are from the Sunday paper (57%);
Men might be the traditional lovers of tech toys, but when it comes to using technology to enhance shopping, women are ahead of the curve; and
Having children in the household drives accelerated adoption of digital technologies to deliver shopping solutions for busy moms and dads.
"Digital shoppers are just shoppers," stated Ben Kennedy, group director of mobile marketing at Integer. "Digital shopping tools are illustrative of the continued blurring of the on- and offline spaces. Today’s reality is that shoppers use whatever tools they have on hand to make them smarter, savvier shoppers."
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Walgreens, Alliance Boots address merger at analyst meeting
DEERFIELD, Ill. — Just a few days after announcing their merger, Walgreens and Alliance Boots leaders sat down to discuss the value of their deal before analysts on Friday.
Kicking off the Q&A-style meeting, Walgreens president and CEO Greg Wasson outlined how the drug store chain’s partnership with Alliance Boots came to fruition, noting that the opportunity was identified about 18 months ago. “Along the way … real opportunities began to come to light, [and we learned] how we could create more value for the two companies,” Wasson told analysts.
Wasson also addressed the merger’s two-step structure, saying it was the right approach for both parties, since the plan allows the companies to capture early synergies and procurement opportunities, allows Walgreens to stay focused on its core business and allows both companies to think their strategies through. “It is a really prudent way to do it,” he said. “I don’t know if there are two other brands out there that can create the opportunity we can. [It is and will be] hard to replicate what we were able to do here.”
Alliance Boots executive chairman Stefano Pessina said the company has adapted its business to the needs of the consumers/clients to grow into a global business and noted that Alliance Boots had been interested in expanding its footprint to the United States, but needed a partner. “We didn’t think of coming to the U.S. alone. Coming alone would have been a suicide. We began to search [and found that] this company (Walgreens) is the right package,” Pessina said. “What convinced me to make the investment is the chemistry. The chemistry is very important. A part of that: We understood that this company had value. There is a clear strategy, and they are pursuing these strategies in a consistent way. I believe this strategy will drive share price.”
When asked why the companies didn’t just collaborate to achieve synergies “without cutting a check,” Wasson explained that collaborations don’t often have combined economic interests and that the overall value of Walgreens and Alliance Boots would maximize the benefits and would “make the pie far bigger versus fighting over the pie.”
”It’s difficult to leverage all of these things if we just did a partnership,” he said.
While Walgreens-Alliance Boots has a combined purchasing pool of $100 billion or more, analysts questioned how the deal has a lot of integration risk with a 45% stake by Walgreens in the U.K. retailer, which currently has debt. The executives — which included Walgreens EVP and CFO Wade Miquelon, along with Alliance Boots group finance director George Fairweather — would not argue with the math, but affirmed that the merger set them up to have “competitive advantage for a very long time” and that the “one-in-a-lifetime brand asset” sets the companies up for expansion and diversification growth for the next 10 to 20 years.
Alliance Boots, which credits its success in various markets by hiring local management to operate its stores, is bringing that same notion to its deal with Walgreens. Both Fairweather and Miquelon are working together to bring together a structure that will create a roadmap for these synergies, including generic and branded drug buying, front-end sales and private label, and research and development for new products and innovations.
As previously reported, the two companies together will be:
The global leader in pharmacy-led, health and well-being retail, with more than 11,000 stores in 12 countries;
The largest global pharmaceutical wholesale and distribution network with more than 370 distribution centers delivering to more than 170,000 pharmacies, doctors, health centers and hospitals in 21 countries; and
The world’s largest purchaser of prescription drugs and many other health and well-being products.
Boots attempted to enter the Canadian market about 30 years ago, couldn't make and went home. Let's see what happens this time.