NEW YORK— To get a sense of how drug stores rate as housewares shopping destinations in the minds of consumers, let’s go to the HomeWorld Forecast 2010 annual consumer survey.
Drug stores didn’t rank among the top-five retail channel preferences for 15 of the 17 core categories covered in the consumer survey. The not-so-surprising exceptions were personal care and health care appliances, for which drug stores were the second-most-popular choice. Still, just one in 10 consumers chose drug stores in these categories, while about half picked discount stores.
Conclusion: Drug stores are not top-of-mind housewares destinations for consumers. So why all the attention to drug chains in this issue? Simple. They sell a lot of housewares.
Getting Your Attention
The three largest drug chains [Walgreen’s, CVS and Rite-Aid] were among the top 24 housewares retailers in 2008, combing for $3.6 billion in housewares sales, according to HomeWorld’s annual Top 100 Housewares Retailers report. Walgreen’s was the ninth largest housewares retailer in 2008 at $2 billion.
That’ll get your attention if you aren’t actively selling the drug store channel. And the prospects seem even brighter when you consider the channel was stout in the face of the recession. Most drug stores are well positioned because of their neighborhood convenience; their longstanding foundation in such steady traffic-drivers as pharmacy and health-and-beauty care; and their intensifying play in grocery.
The already high and potentially rising frequency of shopper visits in the drug channel is tempting. You’ve got more drug stores trying to figure out how to amp up their register rings with complementary categories; and you’ve got more general merchandise suppliers trying to figure out how to expand their shelf space if they’re already in the channel or get on the shelf if they’re not.
Both sides still need to temper their enthusiasm with the realization that the drug channel is not nearly a primary destination for most housewares and other general merchandise hardlines— despite the big yearly sales tallies from those categories in the channel.
Some drug chain operators are admitting as much as they streamline hardlines assortments to focus on items that produce the strongest return by presenting unique value, compelling impulse purchase motivation and surefire promotional push-and-pull. The days of 12 linear feet of flashlights or stick goods in a drug store might be numbered if stores can drive nearly as much volume, maybe more, from better-edited three-foot sections while making more room for faster-turning consumables.
Housewares Sweet Spots
Make no mistake. Hardlines, which still account for roughly a quarter of the selling floor space in chain drug stores, are vital to the channel’s incremental sales growth plans. Sharper merchandising focus for improved productivity, though, is the channel’s restated vow in hardlines.
Beyond such naturals to the everyday drug store mix as personal care and home health care appliances, the channel figures to remain devoted to such promotional housewares sweet spots as seasonal tableware and cooking products, comfort appliances and As Seen On TV items.
Making the drug channel’s promotional mix and narrow in-line housewares sets requires more from suppliers than a sharp price. It requires precise knowledge of each chain’s merchandising strategy, space-allocation practices and customer tendencies; a product/value proposition unique to the channel that can command impulse dollars and drive frequent turns; eye-grabbing point-of-purchase support; and supply-chain dexterity.
If drug stores are not primary housewares destinations for consumers, that doesn’t mean they aren’t destined for housewares growth.