Table of Contents
Executive Summary
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- The issues
- Drug stores can expect continued moderate growth
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- Figure 1: Total US drug store revenues and fan chart forecast, at current prices, 2010-20
- Drug stores in fierce competition with Walmart and “other” channels
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- Figure 2: Drug stores shopped, November 2015
- Lack of awareness about in-store retail health clinics
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- Figure 3: Reasons for not visiting health care clinics, by age, November 2015
- The opportunities
- Beauty is a growth opportunity
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- Figure 4: Items purchased, November 2015
- Humanizing the store via personalized health and wellness services
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- Figure 5: Ways of managing health, November 2015
- Dual-pronged targeting strategy
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- Figure 6: Select influencers that would encourage more drug store shopping and attitudes about drug store shopping, by generations, November 2015
- What it means
The Market – What You Need to Know
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- Slow but steady growth expected for drug stores
- Over one third of Americans are obese, but will the tide shift in light of new tools and technology to aid in health management?
- Healthcare costs are unruly
Market Size and Forecast
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- Drug stores’ sales continue to slowly rise
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- Figure 7: Total US drug store revenues and fan chart forecast, at current prices, 2010-20
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- Figure 8: Total US drug store revenues and forecast, at current prices, 2010-20
Market Breakdown
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- Prescriptions continue to drive the majority of drug store sales
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- Figure 9: Total US drug store revenues and forecast, by segment, at current prices, 2010-20
- Figure 10: Total US drug store revenues and forecast, by segment, at current prices, 2013 and 2015
Market Factors
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- Drug stores in prime position to aid America’s elderly
- Marketing outreach to Hispanics and Blacks should be a priority among drug store retailers
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- Figure 11: US population, by race and Hispanic origin, percentage of total population, 2010-20
- America’s obesity problem worsens
- People are investing in their health and wellness
- Healthcare and medical care costs keep rising
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- Figure 12: Personal consumption expenditures on healthcare, 2005-15
- Smaller store formats and stand-alone health clinics make healthcare more accessible
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- Figure 13: Drug stores shopped, by area and select retailers, November 2015
Key Players – What You Need to Know
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- Consolidation continues, giving leading drug stores more leverage
- Retail health clinic visitation remains low, but is expected to pick up quickly as drug stores place emphasis on these assets
- Healthcare is becoming more personal
What’s Working?
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- Consolidation escalates leverage
- Walgreens Boots Alliance (WBA)
- CVS Health
- Walmart
What’s Struggling?
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- Retail health clinic visitation remains low but is expected to develop
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- Figure 14: Retail health clinic visitation, 2013- 15
- Who will drive this growth and what motivates them?
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- Figure 15: Retail health clinic visitation, by select demographics, November 2015
- Figure 16: Reasons for visiting health care clinics, November 2015
- What are the barriers to adoption?
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- Figure 17: Reasons for not visiting health care clinics, November 2015
- Recent retail advancements support growth estimates
- Walgreens Health Clinic
- CVS Health MinuteClinics
- Walmart
- Target
What’s Next?
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- Expect more personalization in all forms
- Personalization via “my health, my way” in-store services
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- Figure 18: Role technology plays – Any usage/interest, by generation, November 2015
- Personalization via more automated healthcare and online privacy
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- Figure 19: Personal health management, health record and personal health record, November 2015
- Personalization via front-door service
The Consumer – What You Need to Know
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- Most people get drug store needs from places other than drug stores
- Drug stores are becoming more of a destination for HBC buyers
- Drug stores can foster better health management
- Building loyalty in a fickle landscape
Drug Stores Shopped
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- Cross-channel competition intensifies
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- Figure 20: Drug stores shopped – Any, November 2015
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- Figure 21: Retailers or channels shopped, November 2015
- Drug stores must retain share of older and multicultural consumers
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- Figure 22: Any traditional drug stores shopped, by select demographics, November 2015
Items Purchased
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- Drug stores are a key destination for beauty products
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- Figure 23: Items purchased, in-store or online, November 2015
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- Figure 24: Select items purchased online, November 2015
- Figure 25: Select attitudes about drug store shopping, by select demographics, November 2015
Influencers That Would Encourage More Drug Store Shopping
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- Consumers can earn incentives just by taking better care of themselves
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- Figure 26: Influencers that would encourage more drug store shopping, November 2015
- Multicultural consumers are especially influenced by loyalty program benefits
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- Figure 27: Agreement that better loyalty program benefits would encourage more drug store shopping, by race and Hispanic origin, November 2015
- Drug stores should shoulder the responsibility of caring for an aging society
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- Figure 28: Select influencers that would encourage more drug store shopping, by generations, November 2015
Ways of Managing Health
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- High interest in new and engaging ways to track and monitor health
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- Figure 29: Ways of managing health, November 2015
- Hispanics highly interested in ways to manage their health
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- Figure 30: Ways of managinghealth, by race and Hispanic origin, November 2015
- Knowing how customers want to manage their health can guide drug stores’ targeting efforts
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- Figure 31: Ways of managing health, by drug stores shopped, November 2015
Attitudes toward Drug Store Shopping
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- More drug stores extending into private label and store brand
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- Figure 32: Attitudes toward drug store shopping, November 2015
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- Figure 33: Nice! private label brand display in Duane Reade, New York City, January 2016
- Brands’ allegiance toward “healthiness” can appeal to customers who share those values
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- Figure 34: Agreement to shopping more at stores that support a healthful lifestyle, by generation, November 2015
- Telehealth options appeal to multicultural drug store shoppers
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- Figure 35: Select attitudes toward drug store shopping, by race and Hispanic origin, November 2015
Appendix – Data Sources and Abbreviations
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- Data sources
- Sales data
- Fan chart forecast
- Consumer survey data
- Abbreviations and terms
- Abbreviations
- Terms
Appendix – The Market
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- Figure 36: Total US drug store revenues and forecast, at inflation-adjusted prices, 2010-20
- Figure 37: Drug store sales and forecast of health, beauty, and personal care products, at current prices, 2010-20
- Figure 38: Drug store sales and forecast of health, beauty, and personal care products, at inflation-adjusted prices, 2010-20
- Figure 39: Drug store sales and forecast of food and beverages, at current prices, 2010-20
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- Figure 40: Drug store sales and forecast of food and beverages, at inflation-adjusted prices, 2010-20
- Figure 41: Drug stores sales and forecast of other products*, at current prices, 2010-20
- Figure 42: Drug stores sales and forecast of other products*, at inflation-adjusted prices, 2010-20
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- Figure 43: Population by age, 2010-20
- Figure 44: Percentage of people aged 20 or older who are at a healthy weight, overweight, or obese, 2009-12
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Appendix – The Consumer
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- Figure 45: Drug stores shopped – Past four weeks, July 2010-September 2015
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- Figure 46: Drug store shopping frequency – Past four weeks, July 2014-September 2015
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- Figure 47: Coupon redemption at drug stores, July 2010-September 2015
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