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40 BUSINESS THROUGH INNOVATION SHOPPER INSIGHT CTOVID-19 IMPACT ON FLU SEASON OTC SALES he annual flu season is upon us and this time the world is challenged like never before. OTC analgesics, cough, cold and flu medications have always brought a large seasonal sales uplift during the flu season from the end of autumn to the end of winter. However, the COVID-19 pandemic has led to more proactive consumer buying patterns as consumers try to protect themselves and their families against the coronavirus. Significant shifts in buying behaviour During the four-week panic-buying period ending March 22, consumers reacted to the uncertainty by stocking up on analgesics, cold, cough and flu medications that allow self-care and act as a first line of defence against the virus. OTC pharmacy’s $648 million analgesics category recorded sales of $95 million in these four weeks alone, which is a staggering 15 per cent of annual sales and an increase of $44 million compared with the same period last year. The $511 million cough and cold category attracted sales of $61 million in these four weeks, which is a huge 12 per cent of annual sales and roughly double the recorded figure in the same period last year. Cold and flu added $10 million, with cough and throat medications adding $13 million. For both these categories, these four-weekly sales were higher than the average four-weekly sales normally seen in the peak flu season, which speaks to the scale of the disruption in consumer buying behaviour. These significant numbers can be attributed to new shoppers entering these categories as well as shoppers shopping more often and spending more per purchase. IRI’s Shopper Panel, which is now the largest in Australia, consisting of more than 13,000 shoppers across the country, has recorded an amazing 8.9 per cent increase in penetration of the analgesics category (January-April 2020 versus the same period in 2019) and a 1.5 per cent increase in penetration of the cold and flu category. Average spend per trip has increased by 17 per cent for analgesics and a massive 41 per cent for the cold and flu category during the same time. Sales started stabilising from April as infection rates gradually declined. In the four weeks ending April 19, 2020, sales have stabilised to pre-COVID-19 levels, which is a fair indication of consumers being comfortable with the levels of stock at home. Implications and opportunities For both manufacturers and retailers, these developments have major implications. Near term implications would be lower demand for analgesics and cold and flu medications during the flu season given the current higher than normal level of stocks with consumers. Demand will also be dependent on the severity of the flu season or a second wave of COVID-19 infections. Being agile to these scenarios is critical. From a longer-term perspective, these categories will find a more permanent place in shopping baskets. We should expect many of the new shoppers to remain in these categories. This is a huge opportunity for brands to win consumers for the long term. It’s also an opportunity for retailers to expand their loyalty base with new consumers and increase basket size. Sources: IRI Market Edge 2020 IRI Shopper Panel 2020 By Arnab Banerjee. A Lead Consultant IRI Arnab is a Lead Consultant with IRI Australia and an experienced leader in the field of strategic insights and consulting. Prior to this, Arnab has spent considerable time in international assignments in the market research industry, based in Singapore, Hong Kong and Dubai for roles covering Asia Pacific, the Middle East and Africa, partnering global FMCG clients. RETAIL PHARMACY • AUG 2020