BY AMANDA BALTAZAR
A spate of new automated kiosks that allow customers to input their symptoms or the product they’re looking for and receive customized recommendations and information is helping to drive big business in OTC aisles—as much as high-sin-gle-digit growth, in some cases, compared with stores without the OTC kiosks.
The advantages to consumers are obvious: education at the touch of a button and no lengthy lines for pharmacists. The retailer benefits, too, as a satisfied customer means a return customer, as well as one who’s liable to buy more.
Vestcom’s integrated shopper marketing kiosks have been in use for more than 20 years in supermarkets. Ten years ago, the company forayed into the drug store channel, where the kiosks are used mostly to communicate information.
“One of the things that’s different for pharmacies is the amount of information to be communicated and how to fit that all in at the shelf,”
Branded companies pay for the installation of kiosks made by Evincii (above) and Vestcom, and get priority placement in the product recommendations (right).
said Tim McKenzie, Vestcom president and chief operating officer. “Retailers are looking at ways to enhance the customer experience, so if they can become a trusted source of information, they can enhance their brand.”
Vestcom’s machines also help move customers from one aisle to another, thus encouraging further sales by providing additional recommendations. “We might promote sunscreen in the soft drinks screen, for example, especially if soft drinks are on sale that week,” McKenzie explained.
CPG companies typically fund the installation of the kiosks because they pay to have their products featured.
Evincii’s PharmAssist kiosks were introduced to the OTC departments of Longs Drug Stores in mid-2006, although the company hopes to soon
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BYMICHAELJOHNSEN Kalorama stated. “Purchasing OTC
drugs is also more convenient, and money is saved avoiding doctors’ visits. In fact, recent studies have uncovered that up to 40 percent of consumers do not fill a doctor’s prescription, rather substituting with an OTC alternative.”
Sales of over-the-counter medicines are projected to exceed $84 billion worldwide in the next five years, according to a recent report from Kalorama Information. Specifically, in the United States, sales are expected to reach nearly $21 billion by 2012 from a 2007 base of $17.2 billion.
In addition to potential switch candidates that are expected to increase access to more OTC medicines across a broader spectrum of maladies, longer life expectancies (a child born in 2004 is expected to see his or her 78th birthday), the graying of the baby boomer population and increased attention paid to self-medicating in lieu of higher healthcare costs are all expected to contribute to the OTC boon.
According to the report, OTC medicines generated $68.4 billion worldwide in 2007, having grown 3. 9 percent on a compound annual growth rate since 2005. Kalorama Information projected a 4. 3 percent CAGR through 2012.
“Consumers are taking an increasingly active role in self-medication because of rising healthcare costs, a large uninsured population and ever more choices in OTC products,”
OTC drug sales account for 8 percent to 30 percent of total pharmaceutical sales in the majority of regions in the world. In developed regions, such as the United States and the United Kingdom, they accounted for 7. 7 percent and 15. 8 percent, respectively, in 2007. Higher percentages of OTC sales are often found in regions that are less developed, such as India or China.
“The state of the economy, lifestyle, culture, the time it takes to see a doctor and the condition of medical care all contribute to people seeking to self-medicate,” noted Kalorama analyst Melissa Elder. “While it’s not the optimal method of treatment and could lead to complications and undiagnosed conditions, it is nonetheless an important factor driving sales, especially in emerging countries like China.”
The leading OTC manufacturers serving the world market are John-
Potential year
of switch
2009
2009
2009
2009
after 2009
2010
after 2010
2011
2011
2012
after 2012
2013
Trade name Prevacid Pravachol* Zocor* Diflucan Imitrex Protonix Nicotrol Propecia Lescol* Allegra** Provigil AcipHex
Classification
Proton-pump inhibitor
Statin
Statin
Antifungal
Migraine treatment
Proton-pump inhibitor
Smoking-cessation aid
Hair-loss treatment
Statin
Allergy treatment
Sleep agent
Proton-pump inhibitor
Marketer Tap (via Novartis) Bristol-Myers Squibb Merck Pfizer GlaxoSmithKline Wyeth Pfizer Merck Novartis Sanofi-Aventis Cephalon Johnson & Johnson
*The Food and Drug Administration has not yet approved a statin for sale OTC (Merck’s Mevacor was declined OTC switch approval three times, the latest in 2008. BMS’ Pravachol was declined switch in 2000) **Already recommended for switch by an FDA advisory panel Source: Kalorama Information, April 2008
son & Johnson (with a 6. 7 percent worldwide market share, according to Kalorama), GlaxoSmithKline ( 5 percent), Bayer Consumer Care ( 4. 1 percent), Novartis Consumer ( 3. 1 percent), Wyeth Consumer ( 2. 4 percent), Boehringer Ingelheim ( 2. 2 percent), Procter & Gamble ( 1. 7 percent) and Schering-Plough ( 1. 1 percent).
Leading OTC manufacturers worldwide
Fiscal 2007
OTC revenue
(in billions)
$4.6
3. 4
2. 8
2. 1
1. 7
1. 5
1. 2
0.8
Manufacturer Johnson & Johnson GlaxoSmithKline Bayer Consumer Care Novartis Consumer Wyeth Consumer Boehringer Ingelheim Procter & Gamble Schering-Plough
Market share 6.7% 5.0 4. 1 3. 1 2. 4 2. 2 1. 7 1. 1
Source: Kalorama Information estimates
References:
Archives