New IRI Research Reveals Resilience Of Healthcare Industry In The Transforming Economy

Main Category: Pharma Industry / Biotech Industry
Also Included In: Pharmacy / Pharmacist;  Public Health
Article Date: 21 Sep 2008 - 0:00 PDT

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In an economy undergoing dramatic transformation resulting from unprecedented petroleum and commodity price increases, healthcare is delivering solid growth to retailers, relative to the rest of the store, but manufacturers are contending with a sharp increase in private label purchases, notes new research announced today by Information Resources, Inc. (IRI). IRI is the leading global provider of consumer, shopper, and market insights for the consumer packaged goods (CPG), retail, and healthcare industries.

IRI's new research, "Competing in a Transforming Economy 2.0," complements IRI's groundbreaking initial "Competing" study, released in May. That study documented in detail how rising product and energy prices are impacting consumer shopping patterns, and recommended a series of strategies CPG manufacturers and retailers must undertake to address these issues and capitalize on the opportunities this transformation has created.

"Our new healthcare-focused study is the second in IRI's series of 'Competing in a Transforming Economy' reports," said Thom Blischok, president of IRI Consulting and Innovation. "Healthcare manufacturers and retailers are benefiting from consumers' increased interest in self care. However, the specific products consumers are purchasing are evolving as are their patterns for where and how they purchase these products."

One-quarter of all consumers surveyed and 40 percent of lower-income consumers note they are visiting doctors less and turning to self-treatment more frequently. Preventative products sales are on the rise, with vitamin volume growing 8 percent in the second quarter, for instance. Demand is also on the rise for many over-the-counter remedies, including cough/cold and foot care products, for example, but higher-ticket aids, such as sleeping remedies and anti-smoking products, declined by 4 percent and 6 percent respectively in the second quarter as consumers likely attempt to address these habits on their own.

Shoppers are also increasingly turning to private label healthcare products versus branded remedies, mirroring the strategies they are employing with food and other products.

"Private label demand surged in the second quarter as consumers across income segments moved from belt-tightening to belt-notching," Blischok adds. "We expect this trend to accelerate throughout the balance of the year as consumers face another round of price increases and high home heating costs."

IRI's new "Competing in a Transforming Economy 2.0" study also reveals changes in shoppers' buying patterns. Much reduced are destination trips to purchase just a few healthcare-related products as consumers reduce the number of weekly trips they make to save gas. In addition, shoppers are selecting drug store and club channels at the expense of the grocery channel, as part of a strategy to combine potential price savings with maximizing the availability of private label products.

Industry Report: Further Example of IRI's Continued Commitment to Healthcare Space

To supplement the study, IRI has also completed a comprehensive report that analyzes a wide range of shopper trends by product category, consumer segment, channel and market, calling out potential opportunities and risks for healthcare product manufacturers and retailers. According to Stephen Johnson, executive vice president of the IRI Healthcare and Personal Care Client Solutions Group, this report enables IRI clients to:

- Gain new market insights and create best practice approaches
- Identify the "high value" shoppers, whose loyalty is essential to ongoing success
- Implement new product, assortment, store cluster and other strategies designed to create new competitive advantages
- Identify emerging trends early based on shopping and purchasing patterns
- Uncover new pricing and promotion opportunities

"The healthcare industry is so dynamic today, fraught with both challenge and major opportunity as the economy evolves," adds Johnson. "As evidenced by this latest healthcare-focused research, IRI is uniquely qualified to leverage its rich healthcare-specific data assets, insights and domain expertise to provide both retailers and manufacturers with a detailed game plan to meet the evolving needs of today's shoppers and ultimately win in the marketplace."

About the Report

The Times & Trends report, "Competing in a Transforming Economy 2.0" integrates findings from multiple sources, including IRI Economic Trend Database™, based on exclusive IRI AttitudeLink™ consumer surveys, IRI Economic Shopping Behavior Longitudinal Database™, IRI Consumer Network™, IRI Economic Purchase Behavior Longitudinal Database™, IRI InfoScan® Reviews and IRI AllScan Convenience Store Tracking Service™.

About IRI

IRI is the world's leading provider of consumer, shopper, and retail market intelligence and insights supporting 95 percent of the FORTUNE Global 500 consumer packaged goods (CPG), retail and healthcare companies. Only IRI offers the unique combination of integrated market information, automated and predictive analytics, innovative enabling technologies, and domain expertise. With IRI, leading retailers and manufacturers are able to quickly discover breakthrough insights driving smarter decisions and actions across the enterprise for breakthrough results. Companies around the world depend on IRI for improved productivity, stronger brands, and dramatic revenue growth.

IRI