CHAINS AND BUSINESS

McKesson rolls out new program for front end

How can an independent pharmacy increase front-end sales without taking time away from the back end?

Enter FrontEdge Merchandiser, a program McKesson Corp. is offering to its network of 3,800 Valu-Rite and Health Mart pharmacies. The program utilizes the services of Merchandising Corp. of America, a third-party merchandising organization.

Tim Canning, VP of retail marketing at McKesson Pharmaceutical, explained that a professional merchandiser will visit stores every month to make sure that planograms and merchandising and promotion programs are set up properly. "There's a tremendous opportunity to translate Rx sales into OTC sales, and the best way to do that is to market your front-end merchandise in a way that is appealing to the consumer with the products you want to recommend. This program helps accomplish that," he said.

FrontEdge Merchandiser is an enhancement to McKesson's FrontEdge program, which provides to independents specific planograms and pricing based on Nielsen and McKesson data. FrontEdge Merchandiser is being rolled out initially in the southeast region and will operate in about 1,500 Health Mart stores by the end of the year, according to Canning.

The monthly fee that Health Mart franchisees pay includes access to McKesson's FrontEdge program, and FrontEdge Merchandiser is being offered as an added value without an additional fee. Valu-Rite pharmacies, which belong to a cooperative membership program, must enroll in the FrontEdge program in order to receive FrontEdge Merchandiser.

Canning predicted that certain OTC categories would see double-digit increases as a result of better merchandising in the stores. Categories that merchandisers will oversee include gastrointestinal, cough, cold, analgesic, vitamins and nutritionals, diabetes care, foot care, first aid, and skin and beauty care.

Canning particularly urged independent pharmacies to integrate their front and back ends. For example, he said, if a patient is filling a prescription for an antibiotic for a sinus infection, independent pharmacies should make sure that an OTC product to help relieve the symptoms of the condition is merchandised properly. "There's a push from the manufacturer and pharmacists to make sure they are leveraging the strength of the back end into the front end. FrontEnd Merchandiser will make sure they have the right products there and that the best-selling products are merchandised attractively and are in the right position, and priced properly."

Merchandisers who visit the stores will focus on one or two planograms per month. "They will look at a category, and, if there are new items that are the lifeblood of the business, they will make sure the items are put on the shelf and will suggest that the pharmacy order these items if they don't have them," said Canning.

Emphasizing that many manufacturers have shifted their focus to the major chains and that chains have hired merchandising companies to go into their stores, Canning said that the program "gives us an opportunity to help the manufacturers execute at retail, because for an individual manufacturer to send a merchandiser into each of the independents would be a tough investment. They would not get the payback. Sending a person in to merchandise for multiple vendors for an entire category is a cost-efficient way for manufacturers to reach the independent's space." He noted that while pharmacists know how important the front end is, they don't necessarily have the time or staff to execute a program.

Canning went on to explain that FrontEdge Merchandiser will help independents capitalize on the upcoming cough and cold season. "New is good in that category, and it is especially important that stores take advantage of this program. Independents are traditionally slow to shelf with new items because they are focused on the back end and have limited resources. The chains are great at getting new items on the shelf. Because we are going to have the people in the store every month, this new service will provide speed to shelf for the independents," Canning concluded.

Sandra Levy

Sandra Levy. McKesson rolls out new program for front end.

Drug Topics

Aug. 23, 2004;148:57.