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America is getting
older. Thirty-five million strong and representing 12.4% of
the population, the older population (age 65+) is growing
by leaps and bounds. The number of older Americans grew by
12% since the Census of 1990—an increase of 3.7 million.
And more growth is on the way. Consider this: According to
the U.S. Census Bureau and the National Center for Health
Statistics, since 1990, the percentage of Americans 65+ has
more than tripled (4.1% in 1900 to 12.4% in 2000), and the
number has increased eleven times (from 3.1 million to 35.0
million).
The oldest segments are also growing the fastest. In 2000,
while the 65-74 age group (18.4 million) was eight times larger
than in 1900, the 75-84 age group (12.4 million) was 16 times
larger and the 85+ group (4.2 million) was 34 times larger.
And so it goes, as the age of Americans continues to rise,
so does the number of chronic conditions people are suffering
from. While the increase of chronic conditions is met with
extreme concern on the part of patients, doctors and insurance
carriers, it has also brought about new opportunities for
pharmaceutical companies, retailers and consumer-packaged
goods manufacturers.
Young at Heart
Nearly half the American population, 125 million people, suffers
from at least one chronic condition, according to a survey
released by the John Hopkins University and the Robert Wood
Johnson Foundation, and 60 million have more than one condition.
This number is projected to increase to 171 million in the
year 2030. A chronic condition is defined as being persistent,
limiting of one’s activity, usually not curable, and
which may require continuing health care or long-term care.
Examples of chronic conditions include diabetes, cancer, asthma
and heart disease.
Consumers with chronic conditions represent a growing national
problem. The costs for managing these conditions could reach
$1.07 trillion by the year 2020. Costs associated with chronic
care include direct costs paid by third parties such as insurers,
out-of-pocket costs directly linked to professional care,
related costs such as equipment and supplies not covered by
any program and economic costs due to lost income because
of illness. The challenge today is to provide quality ongoing
care to patients with a focus toward improving day-to-day
lives.
Knowledge Is Power
Thanks to the explosion of the Internet and direct-to-consumer
(DTC) advertising, consumers are now empowered more than ever
to learn about their chronic conditions and how to treat them.
In an era of unprecedented access to information, knowledge
is power—and that power has resulted in a dramatic shift
in doctor-to-patient and patient-to-pharmacist relationships.
In the past, the patient was a passive recipient of services,
expecting the provider to make all the decisions. Today’s
concept of “managed care” puts a greater emphasis
on patients taking on a more assertive role in their well-being;
today, patient and doctor (or pharmacist) work together to
ensure that competent and complete care is administered. This
raises an interesting scenario and a huge opportunity for
retailers and manufacturers to respond to the ever-growing
needs of consumers with chronic conditions.
Respond to the Need
Patients who live with a chronic condition have a variety
of social and environmental needs that are not always sufficiently
addressed by retailers today. For example, diabetics need
to manage their diets accurately in order to maintain healthy
living. They would benefit tremendously from learning how
to pick and eat the right foods; marketers could benefit by
educating these consumers and promoting these specific types
of food products. In fact, diabetes care is one of the most
dynamic categories in retail today. Sales of everything from
medical test kits to sugar-free candy to syringes have seen
unprecedented growth [See chart 1].
The drug channel is strong in each of these categories. It
is in an excellent position to expand its offerings to help
consumers with various health management issues and can uniquely
influence virtually every diabetes patient who walks into
the store. The pharmacist can make recommendations about meter
choice and testing frequency and can also provide critical
therapy information and reinforce compliance.
The grocery channel, however, could do more to expand its
share position. For example, while grocery holds the majority
share position in the total candy category (54% vs. 29% drug
share), its share in diabetic candy is only 39% compared with
drug’s 56% share. Retailers outside the drug channel
should also take a look at understanding these consumers,
and should relish the opportunity to improve their fair share
by helping consumers understand the right foods to eat.
In order to take a proactive approach, retailers and manufacturers
need to know which categories index high for consumers with
diabetes (or other chronic conditions). Using insights from
the Homescan Rx/OTC consumer panel, the shopping behavior
of diabetics who take insulin was analyzed to pinpoint high-indexing
product categories [See chart 2].
By better understanding the needs of consumers, retailers
can improve communication and look for joint-marketing opportunities.
Tactics such as improving the diabetic’s shopping experience
by providing in-store services and educational materials will
go a long way to improve overall customer satisfaction, build
loyalty and increase overall sales.
The Future Is Bright
Across the retail landscape, the demographic shift in the
U.S. can be a positive for all retail channels, according
to Don Longo, Editor-in-Chief for Retail Merchandiser. “The
drug channel is well-positioned to benefit from the aging
population, but it will have to vigorously defend its prescription
business from mass retailers and grocery chains,” said
Longo. “One way of doing this is to emphasize their
stance as the one-stop place for consumers’ health and
well-being needs.”
For example, in a recent cover story in Retail Merchandiser,
store designers and futurists argued that drug retailers needed
to focus on being a woman’s “lifetime” drug
store. “They envisioned a warm and inviting store in
an information-rich environment with an edited merchandise
assortment focuses on three solutions-based needs: beauty,
health and family,” said Longo. “Such a store
would have lots of magazines and literature, and perhaps even
an in-store cafe.”
According to Longo, other experts foresee a pharmacist-centric
store that revolves around the prescription desk and includes
semi-private consultation areas, digital displays and Internet
kiosks. The store’s product mix would be heavy with
homeopathic medicines and earth-friendly cleaning products.
Longo also noted that the opportunities for co-branding have
much potential. “Some prognosticators go so far as to
predict that medical brands, such as the Mayo Clinic, would
extend into retail, opening stores that featured health care
aids, aromatherapy products, and even services like massage,
chiropractic care and reflexology, all performed by professionals
in a spa-like setting,” he said. “There would
also be classes for well-baby care, nutrition and stress management.”
Clearly, there is much opportunity for smart marketers and
merchandisers across the board who understand not only consumer
demographics and behavior, but the health and lifestyle conditions
that impact their purchase behavior.
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