Is Personal Care Becoming the Clearest Example of Consumer Channel Creep in New Zealand?
One of the more interesting changes occurring across New Zealand retail isn't simply the growth of Pharmacy. It's the movement of the consumer between channels.
Chemist Warehouse continues to expand its New Zealand footprint with Sigma Healthcare outlining a pathway to more than 100 stores. But physical expansion is only part of the story.
Its combination of professional service, great prices and extensive range has become an important part of its New Zealand proposition.
At the same time, Grocery Personal Care assortments are evolving. Our Storelink category work identifies grocery range rationalisation, alongside the increasing relevance of Chemist Warehouse as a destination-shopping channel.
There is nothing inherently wrong with range rationalisation. For retailers it can concentrate volumes, simplify the offer and improve productivity. However, there can be a consumer consequence. As the number of brands, variants and formats available within a channel reduces, some consumers may look elsewhere for the choice they want. And this is where the Pharmacy proposition becomes particularly interesting.
A tighter Grocery assortment sitting alongside an expanding Pharmacy network offering breadth of range and a strong value proposition creates the conditions for consumer channel creep.
The consumer doesn't necessarily think in terms of "Grocery" and "Pharmacy". They think: Where can I find the product I want, at a price I am comfortable with, with enough choice to make the trip worthwhile?
That shift matters enormously for Personal Care suppliers. It means suppliers need to ask a different set of questions:
What should our Grocery assortment look like?
What should our Pharmacy assortment look like?
Which channel provides the right home for our broader portfolio?
How do we construct pricing and promotions across retailers?
And where should our commercial investment follow changing shopper behaviour?
That requires sophistication rather than simply shifting investment from one channel to another. Grocery remains critical. Pharmacy is becoming increasingly important. The opportunity is to create deliberate retailer-specific strategies across both.
Storelink's Personal Care approach is built around that principle, with retailer-specific assortment and pricing strategies across Foodstuffs, Woolworths New Zealand and Chemist Warehouse. Our Personal Care capability combines Key Account Management, national field sales and merchandising across these channels.
Our key learning is simple: don't fight consumer channel creep. Understand it.
Follow where consumers are shopping.
Understand why they are moving.
Build the right assortment for each retailer.
Carefully model pricing and investment across channels.
And make sure you have the Key Account capability to manage the increasing complexity that comes with it.
The future of Personal Care isn't Grocery versus Pharmacy. It's creating a brand and retail strategy capable of winning in both.
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