The 21st-Century Drugstore: Adapting Drugstore Retail for the Silver Consumer

Adapting Drugstore Retail for the Silver Consumer

Shopping has transformed from being merely an errand on a to-do list to an experiential journey. With a growing preference for e-commerce and with shoppers spoilt for choice, bringing customers into stores has become more challenging than ever.

In this report, we explore how drugstores can adapt themselves to the demands of senior consumers (those aged 65 and over), who are set to become a more important segment in the coming years.

Seniors, or silvers as they are sometimes referred to, will jump from representing 15% of the total North American population in 2015 to 21% in 2030, according to the United Nations. The growth of the aging population is principally being driven by people living longer, so the population of “older seniors,” those aged 75 and above, will grow even faster than the total senior population. Yet, these are not the only reasons for drug retailers and pharmacies to adapt their stores to older consumers’ needs.

This report is the second in our 21st-Century Drugstore series. Our first report looked at how drugstores are positioned to be a leading channel in beauty and personal care sales.

Why Stores Must Pay Attention to Older Shoppers

Senior shoppers exercise considerable clout as consumers, particularly in the healthcare category. Underlining this is the fact that seniors allocate a greater share of their overall spending to shopping than the average consumer does. As the graph below shows, this spending at retail is driven by younger seniors—those under the age of 75. Almost one-quarter of all spending by these younger seniors is directed toward retail categories.

And within retail categories, US seniors spend heavily on functional categories such as healthcare and housekeeping supplies. US senior households constituted 23% of all households in the country in 2015, but they contributed fully 31% of total healthcare spend and 26% of total consumer spend on housekeeping supplies.

Retailers must have their eyes on the next generation of retirees, too—and this is the baby boomers (those born between 1946 and 1964).

How Older Shoppers Shop

It is imperative, therefore, for drugstores to understand how older consumers shop and what they want—not least because these consumers are a natural customer base for health-focused retailers. So, how do baby boomers and the current generation of seniors shop?

First, baby boomers and silvers aged 68 and older make more visits to small-store formats, such as convenience stores, dollar stores and drugstores, than younger age groups do, according to latest Nielsen data. They also tend to visit midsized stores (such as grocery stores) more frequently.

Second, Nielsen’s data also indicate that senior shoppers tend to be smaller-basket shoppers. Older age groups may visit smaller-format stores more frequently, but they tend to spend less per trip. Nielsen found that convenience stores are the only store type where baby boomers’ spending per basket exceeds that of millennials and Generation X shoppers.

Baby boomers are more likely to shop at brick-and-mortar stores than younger shoppers. Loyalty marketing firm Colloquy found that 84% of American boomers surveyed earlier in 2017 said that they prefer to shop in-store compared to a smaller percentage of millennials (those born between 1980 and 2000) and Generation Z (those born in 2001 and thereafter) shoppers. We think this underlines the need to adapt physical retail spaces more for older consumers in the years ahead.

Serving Senior Shoppers

Drugstore retailers are well placed to cater to older shoppers, and these are some of the demands that we think will become more common:

1. Convenience and proximity are a high priority: Baby boomers seek convenience while shopping, as only 27% indicate that they find shopping relaxing, according to Colloquy. The same survey found fully 75% of boomers indicating that an “easy-to-access” location is “very important” compared to some 66% of millennials that felt the same. A 2013 survey from A.T. Kearney confirmed the same demand from older shoppers—some 68% of the 60–70-year-olds that the firm polled stated that they prefer shopping in smaller shops and in those that are closer to their home. The same survey also indicated that older consumers view shopping as a social activity rather than just going to a store to buy products.
2. An easy-to-navigate store layout and helpful staff determine further visits to a store: Colloquy’s survey found that fully 54% of baby boomers were unlikely to return to a store if sales staff did not appreciate their business, and some 50% were unlikely to return to a store if it was untidy. Seniors also indicated similar issues about not having store staff to assist them while trying to get products off very high or very low shelves, in many instances. Some senior consumers can also find large stores harder to navigate. For instance, a 2012 Retail Week focus group with UK shoppers aged 60+ found that many of the participants thought shopping malls were “too overwhelming.”

3. Seniors want simplicity in packaging and labels: Older seniors may find product packaging hard to open, and labels and prices are hard to read, even if they are wearing glasses or contact lenses. More than 52% of senior consumers in A.T. Kearney’s focus group said they had found product labels hard to read.

What Have Retailers Done So Far

Two drugstore retailers have already made simple adaptations to their stores, to enhance the shopping experience for senior shoppers, which can be a starting point for retailers to be inspired for further, thoughtful changes to in-store shopping.

CVS and Walgreens in the US have adapted elements of store design and accessories in order to help seniors navigate stores without difficulty and even read labels more easily.

• Shelves are placed neither too low nor too high, so they can be reached easily.
• Floors are carpeted in some stores to avoid accidental slips and falls.
• Magnifying lenses are attached to shelves to help customers read labels more easily.

Most drugstore products tend to be small in size and the instructions and labels on them are written in fine print. Magnifying lenses help customers read these labels more easily. Carpeted floors and shelves that are easy to reach allow those who have difficulty walking and bending navigate stores with less effort.

Apart from these drugstores, retailers elsewhere have also made minor changes that go a long way in helping more fragile seniors navigate stores more easily. In Germany and Austria, respectively, the Kaiser and Adeg chains have adapted stores: offering wider aisles for those using mobility scooters, incorporated additional seating areas and nonskid flooring, and using large-print labels and magnifying glasses to read shelf and product labelling.

Meanwhile, Lawson, one of the top five convenience-store operators in Japan, has been pioneering transformation in the sector to cater to older shoppers. In the mid-2000s, the company began to overhaul its stores in areas with high concentrations of silvers: it widened aisles, lowered shelves, and emphasized products and food offerings that appeal to older shoppers. More recently, Lawson added nursing-care consultation desks in stores, with managers and advisors available during all hours the stores are open.

What We Think

We think more drugstore retailers should consider following the example of retailers such as Kaiser, Adeg and Lawson. Many simple, minor instore changes will go unnoticed by younger shoppers, but will be appreciated by the growing cohort of senior consumers.