Inside This Issue - News
As cold/allergy category evolves, retailers must be flexible
February 27th, 2011
by Jennifer Johnston
The last few years have been a rocky road for the cold and allergy category. From the methamphetamine ruling that put pseudoephedrine (PSE) products behind the counter, to concerns over the use of cold medicines in young children and product recalls from a major product manufacturer, the category has faced many challenges.
Despite these hurdles, SymphonyIRI Group Inc. data shows that sales of cold, allergy and sinus liquids and tablets posted $3.2 billion in sales during the 52 weeks ended September 5, 2010. That’s an increase of 2.25% from the same period two years earlier.
When factoring in cough syrup, cough drops and nasal products, total category sales jump to $4.1 billion. Not a bad figure for a category that has seen its share of changes.
And we can expect more change in 2011, at least in the allergy segment. Prescription Allegra (fexofenadine HCI) and Allegra-D (fexofenadine HCI/pseudoephedrine HCI) will soon be available without a prescription. With an estimated Allegra patient count of around 7.8 million in 2008, and 23 million fexofenadine prescription transactions, retail cold and allergy aisles could see an influx of consumers looking for another self-treatment method for allergy symptoms.
Since research indicates that patients use two and a half medications on average to treat their allergies, this prescription-to-O-T-C switch will likely have a positive impact on overall category sales.
The self-treatment of allergy symptoms is important to consumers. Outdoor allergies now span three seasons, and indoor allergies complete the cycle to make allergy a yearlong segment. Symptoms such as runny nose, watery eyes and sneezing have as much to do with dust mites and pet dander as grass and pollen. It no longer makes sense to think of the allergy segment in seasonal terms. Special emphasis should be placed on allergy products all year.
In light of the recent recalls and concerns over children’s medications, many consumers are more comfortable using products they deem more natural. Retailers might consider highlighting a small section of natural choices in their cold and allergy aisle, complete with special signage.
Examples of natural and homeopathic brands that have released products in the last six months that treat cold and allergy symptoms include Airborne, Allergy 4 Kids, Breathe Right, Emergen-C, Organix, Oscillococcinum, Kids-EEZE, OCEAN and Zicam.
Cold and allergy is a need-based category, yet there are many items in a drug store that provide additional comfort to a cold or allergy sufferer. Copromotion and cross-merchandising of these complementary products, such as tissue or hand sanitizer, present the cold and allergy aisle as a total treatment center for upper respiratory concerns and may help retailers achieve add-on sales.
In addition, pharmacists should be trained to recommend companion products, such as cough drops or allergy eyedrops when consumers purchase an allergy prescription or a behind-the-counter PSE product.
Also keep an ample supply of private label products available to shoppers. When some allergy sufferers are on the fence about treatment or suffering through their symptoms, a lower-cost private label product can be the deciding factor in whether to purchase an allergy symptom reliever or not.
Additionally, most allergy products are eligible for reimbursement through consumer flexible spending or health savings accounts, though under the new health care legislation these products may require a prescription. It is to a retailer’s advantage to point out this potential eligibility through signage and conversation.
The cold and allergy category continues to evolve and become more profitable every year. Retailers who recognize and embrace the changes, especially to the allergy segment, will fare much better than those who don’t. The opportunity exists to turn the cold and allergy aisle into more than a grab-and-go section, making it a total treatment center that meets shopper needs all year long.
JENNIFER JOHNSTON is an industry writer and researcher with Hamacher Resource Group Inc., a retail consumer health care research and marketing company.