In this episode, Steve Perlowski from NACDS discusses the evolution of retail technology, pharmacy innovations, and the future of healthcare retail, including AI, patient engagement, and store experience enhancements.
Key topics
Chapters
00:00 Introduction to Steve Perlowski and NACDS
00:31 Historical perspective: retail tech in 1988
01:01 From typewriters to mail correspondence
01:15 Early retail data collection methods
02:34 Impact of internet, cloud, and AI on retail
03:22 Prioritization of pharmacy tech investments
04:12 Transformations in pharmacy customer experience
05:26 Automation and AI in pharmacy operations
07:05 Centralized pharmacy fulfillment and robotics
08:42 Pharmacy's role in healthcare and longevity
09:40 Implications of extended lifespans and biotech advances
12:23 Misunderstandings about pharmacy and healthcare
13:50 The complexity of prescription fulfillment and insurance
17:47 Technological improvements in prescription accuracy
19:02 AI and computer vision in medication dispensing
20:06 GLP1s and the broader store health story
24:37 Emergence of new health categories and merchandising
27:24 Creating experiences and merchandising by life stage
32:22 The evolving role of pharmacists and in-store health services
39:11 Challenges facing pharmacy location sustainability
41:27 Tech industry disconnect and opportunities in retail
44:57 AI build vs. buy and organizational ownership
45:41 Data privacy, HIPAA, and AI regulation
47:06 Lightning round: personal preferences and insights
Philip Moore (00:00)
Welcome to Retaili$tic with Deborah Weinswig, brought to you by Coresight Research.
In this episode, Deborah catches up with her old friend Steve Perlowski Executive Director of the National Association of Chain Drug Stores, to talk about the monumental changes underway in healthcare and how scientific breakthroughs in longevity will impact all aspects of retail. But first, Dana is here to catch up on what is on offer from Corsight Research this week.
Dana (00:29)
Thanks Philip, and welcome back to the Retaili$tic Podcast. We have a big week ahead on the research side of things. Our report of the week is the Global Luxury Market Navigator. Plus, we've got the US Retail Outlook, Weekly Earning Insights, the AI Impact Monthly Analysis, as well as a CEO brief on holiday expectations, also a new SIP report on retail footprints and the migration wave, and of course the US and UK store trackers.
Also, mark your calendars for the Coresight Conference. Registration is open now. Today's episode is a good one. We're sitting down with Steve from NACDS. Let's get into it.
Deborah Weinswig (01:06)
Hello everyone, thank you, and welcome to another edition of Retaili$tic. We are very excited to have NACDS's own Steve Prolowski with us. I will say, I'm trying to remember. I mean, I've probably been involved with NACDS for almost two decades, originally finding my way to it as a retail analyst who also focused on the healthcare space. And you'll find through this conversation just how much NACDS as an industry association has evolved.
As well as the problems we're tackling. So, Steve, thank you so much for joining us.
Steve Perlowski (01:35)
Thanks, Dub. Delighted to be here with you.
Deborah Weinswig (01:37)
So if we take a big step back and look at when you joined NACDS, which was in nineteen eighty eight,
Steve Perlowski (01:43)
That is true.
Deborah Weinswig (01:44)
what did a mean, we you and I have spoken about some of these things, which I I always love the anecdotes, but what did a tech problem even look like back then compared to
Steve Perlowski (01:53)
So I'll give you, you know, first the office. we used memory writer typewriters. so that I mean and ever all of our correspondence was done by mail.
you know, it and when you're sending out hundreds of thousands of letters on a on a weekly basis, one you want to make sure you don't have a typo in your memory writer because then you gotta redo everything and and it gets really loud with those. I don't know if you remember those. They may not have you may that may have been a a lifetime past you, but know, and then you know, then it was always looking for the whiteout in case you did have a typo.
And then if if I think about retail at that time
you know, scanning wasn't widespread at that moment in time. You know, in in grocery stores it was, drugstores it wasn't, and Mass Merchants was kind of a mixed bag. So, if you wanted to know how sales were going, you went to a company called Town Oler, who you may remember and they they did they measured say or they measured product movement by warehouse withdrawal.
they got retailers to tell them how many cases of, you know, these products did they ship in a given week. So that was how you figured out sales.
Deborah Weinswig (03:00)
Wow. And and over the right, I mean there's been, you know, several, I'd say foundational changes, right, between, the internet, cloud, and now AI. How how have you seen industry adapt and then ultimately adopt?
Steve Perlowski (03:16)
Well, the way I I look at this, i there's two things. One, what are the competing projects? And two, who's gotta do the work? And and and most often the who's gotta do the work is you know, if it's in the store, it isn't gonna get done. And you know, if it's competing projects
you look at what what part of the business is more valuable than the others. So it may be, you know, in our industry, pharmacy gets the lion's share of the technology investment versus the front of the store.
Deborah Weinswig (03:47)
What what are some of the biggest I mean I will say I'm and I I am not often wanting to say super positive things about my CVS store experiences, but I I think I've posted very few of these, but I mean there'd be lines of twelve, eighteen, twenty people. I went the other day and I mean there is no line
And and everyone seems happy, the people who work there and the customers. And literally all it goes back down to now is you're typing in, right? You're going up to a kiosk, you're typing in your name, your birth date, or whatever. They're literally pulling your medicine and the amount of time, if you think about the fact you've gone from lines of let's call it twelve to twenty people down to no lines and everyone who works there so it's it's like a win, right? I'm sure the shareholders win, the employee wins and the customer wins. That's that's something I had to see with my own eyes.
Steve Perlowski (04:29)
Yeah, I you know, I I actually got a prescription for my dog filled at a C V S the other day. And the the interesting thing was there was a long line at the pharmacy
But there was no one at the kiosk. So I probably should have asked if everyone's punched in their information into the kiosk.
Deborah Weinswig (04:47)
Interesting.
Steve Perlowski (04:47)
But I just walked up, punched my information up. The tech came down, gave, you know, asked me if I had any questions for the pharmacist and rang me up and let me go. And I was out literally in a minute. And all of a sudden all these other people behind me started walking
Deborah Weinswig (05:01)
Like running.
Steve Perlowski (05:02)
up.
Ha ha.
Deborah Weinswig (05:03)
Yeah, it's I I think I mean where I live in New York, we've had a drugstores closed. So I think the CVS took on a lot of volume. But it's interesting, right? the techs are like they're doing a great job of training us the customer, right? Because there there has to be a whole change in our behavior. And I'll say it takes like two times where they're like, just put your information in the kiosk. And like, this is amazing, right? Like why w why wouldn't I do that? And then and they're
Steve Perlowski (05:25)
Right.
Deborah Weinswig (05:26)
much
less stress, they can spend more time with you. So you start to think about like I mean obviously about patient engagement, patient care, right? You then have more time to spend with the the customer and answer their questions. And you're not just like to me in my history of s of like what I've I mean yes, pill counting technology and all that, but and the ability to read, right, the whether computer vision or whatnot, the prescriptions. But this to me is if you can free up time
on both sides, the customer may have questions that they wouldn't have normally or wouldn't have thought about because they were just rushing. And then also everybody on the retailer side, they've got so much more kind mental capacity to answer questions. It just it it's I I feel like we're at the beginning of a bigger change in you know, kind of we'll call it whole health than we've seen in long time.
Steve Perlowski (06:13)
Yeah, well one of the things that's working behind the scenes with that pharmacy is many are moving to something called Central Phil.
where they're you know they they can they can do the analysis of of a ninety day supply and when you're coming up when a patient's coming up to get a refill. So it at night when you've taken your 80th pill you're gonna get an email typically saying do you want to refill your prescription? And you know you just say yes you know to the email and and you know lo and behold you know a day later you get a pr you get another email saying your prescription
is
ready, you know, do you want to pick it up at this time or some other time? And that prescription's getting filled, you know, miles you know, hundreds of miles away potentially, with high volume robotics and AI that's that's doing automated pill counting and you know, it it I I had the the luxury and pleasure of of visiting a new Walmart Central Phill last year and it was eye opening. How
how quickly they could they could take care of hundreds of stores.
Deborah Weinswig (07:14)
Well,
and hundreds of people too, right? I mean, I think that's that's the other piece of it.
Steve Perlowski (07:16)
Well, thousands
of people. Hundreds of stores and thousands so it's all the maintenance medicine that people are taking is now getting they've moved that work to the central field facility so that that frees up the pharmacists and the technicians, to your point, to spend more time with the customers. And you know, some pharmacies are, you know, doing even more in store to speed up that process as well.
Deborah Weinswig (07:40)
And
if if we
Steve Perlowski (07:41)
Which we
j which you described at CVS.
Deborah Weinswig (07:43)
Yeah. So if we think about where where we've gotten to, and then of course GLP one will come up in our conversation, but with newer ways of approaching patient health, what what do you think this I mean, right, Peter Dumontis had said so amazing last year in San Diego, right? If you're under sixty, you'll live to a hundred and twenty.
What what does all this mean to you?
Steve Perlowski (08:02)
you know, one is opportunity. two, we we actually had a colleague of his speak at our annual meeting this year and and he made the claim that the first person to live to a thousand has already been born.
Yeah, that's you know, so you know, and then then he went off on on the tangent of what does this mean for the definition of a marriage?
Deborah Weinswig (08:21)
geez. We're not going there.
Steve Perlowski (08:23)
but it was I mean it it's it's really interesting if you if you think about you know, y there w there was a tape of a conversation between Chairman G and Putin
shortly after the Diamanda speech where they were talking about how long they were gonna live. And it it wasn't dec it wasn't years, it was decades.
And so obviously, know, in certain circles, there's a shared belief that, organ reproduction and you know, all sorts of other advances in science are are going to dramatically enhance the length of life. And and so it it begs the question, what am I doing about longevity in my in my store?
and what are the things that I should be looking out for. there's an interesting conversation going on at the FDA today in Washington talking about peptides because the belief is peptides are are going to be one of the major sources of creating a this this extended lifetime.
Deborah Weinswig (09:24)
Well
ultimately how are they regulated, right?
Steve Perlowski (09:26)
Well, they're not right now.
Deborah Weinswig (09:27)
Right, well that's
the conversations I've been in, right? People are like, you know, I think this is good for me. I'm but everyone's like, I feel so much better. But yeah, I think and and I think that that's right, therein lies some of the challenges and opportunities when think about right, chain drug and and also we can talk about what that means today, but pharmacy now sits at this interesting intersection between health care, regulation, retail, longevity, right, and and whole health.
Like, what's the thing about running whether it's a drugstore chain or a pharmacy that people outside the industry don't understand? and how do you think that I mean, I've always thought that because health, in my opinion, starts somewhere between, you know, food and medicine or food as medicine, there is a huge opportunity to kind of change that conversation. But what do you think people get wrong? And then like, how do we start to change the conversation?
Steve Perlowski (10:14)
I I think the two big things people don't understand is how from the what happens from the time a doctor writes a prescription to the time you pick it up in the store, what happens? Most consumers think that it should only take you know, from the time it takes me to drive from the doctor's office to the store, it should be ready.
and you know that's the the the number of things that have to happen to make that occur are you know, th there's a lot a lot going on behind the scenes. And then the other thing I don't think people truly understand is the economics of a pharmacy or a retailer that has a pharmacy and drugstore merchandise. you know, to to fall back on the front of the store, you know, our bigot
One of our biggest problems in the front of the store is theft. And you know, too many people think theft, you just file an insurance claim and you get reimbursed. if that were only true.
Deborah Weinswig (11:09)
If that were only true, the numbers would be very different.
Steve Perlowski (11:12)
so, you know, one, I don't think people really understand, you know, the impact of of theft on retail.
Two I don't think they they they understand all the work that goes on behind the counter.
To make sure that the product you're getting is the one not only that the doctor says you should be taking, but also is what your insurance company says you can be taking. and there's a a large amount of back and forth that goes on between doctor, pharmacist, pharmacist, insurance company.
to make sure that the product that that is being dispensed is one covered by the insurance company and is a you know if it is if a if a change is recommended by the insurance company that the doctor has to approve it as well. And the doctor's not sitting by the phone waiting for a pharmacist to call.
Deborah Weinswig (12:02)
No, and that thereby are are you seeing a change in whom ultimately is solving that problem right? At one point it was the pharmacist, at one point it was doctor, the consumer. If they need to take something that's not covered, et cetera, or they're out of stock, which has been a challenge. How how are those problems getting solved these days and how is that different?
Steve Perlowski (12:22)
Yeah, I would I would suggest right now the pharmacist is the gatekeeper. because they're the one that ha I mean the doctor doesn't have communication with the insurance company over what the approved products list is. So the pharmacist has to be the translator between the two. And by the way, if it's a paper script, somebody's gotta interpret what the doctor wrote.
Deborah Weinswig (12:42)
That is true.
Steve Perlowski (12:43)
You know, the good news is more and more
scripts are being sent electronically, but even then you have to make sure that what comes across electronically is what's intended based on, you know, a set of criteria that the pharmacist has, and the insurance company has. So you know, there's there's a lot of give and take in there and and and in that area
that that that's an area where AI could probably play a much bigger role. And some companies are actually you know, moving in that direction where, you know, AI and the insurance comp actually it's the PBM, is talking to the you know, the pharmacy AI is talking to the PBM AI and they're they're going back and forth over
who's right, who's wrong and w and what can be dispensed and at what price. and then, you know, if it's a different drug, then then it, you know, initiates the phone call to the
Deborah Weinswig (13:34)
Doctor.
Steve Perlowski (13:34)
physician so that when the physician picks up, then the pharmacist can grab the phone because right now pharmacists, you know, they can spend almost half their day on hold on the phone with either the insurance company or the doctor's office.
Deborah Weinswig (13:47)
Just I I feel like it just seems like there there should be could be a different way that you know going back to could improve outcomes, improve profitability, and ultimately, know, just kind of improve transparency. I mean, I think one one of the things that that I don't think
the consumer also realizes is the if you will, the the burden on the pharmacy in terms of delivering the right prescription and what you know, what have you seen from a tech perspective that's that's improved that and how much more like how much farther do you think there is to go?
Steve Perlowski (14:21)
Well, there's a couple of things. One, every bottle that's shipped to a pharmacy now
it has a 2D barcode on it, and in within the 2D barcode, you've got the National Drug Code number, NDC, you have the lot number, you have the expiration date, and that bottle is serialized. So when I go to when I scan that to dispense it, one that's that's one guarantee that the patient's getting the right medicine, but then you you have traditional methods where when you scan it,
A photograph of what that product looks like comes up on the screen. So whoever's counting the medicine can do a quick check of the medicine against the photograph. But now there's a couple of companies that have use computer AI to computer vision with AI to do that check. So you're taking the the human out of that process, or it's a an additional.
Process to make sure that the right pill is getting in the right bottle for the patient.
Deborah Weinswig (15:21)
that to me is kind of one of the great use cases for AI. And then the more time of course you can free up, the more time people can spend with, you know, patients, customers, et cetera. So we
Steve Perlowski (15:31)
And it also
it also double does a double count on the on the number of pills put in the bottle. So it you're getting less mistake I mean you're getting a better understanding, you know, you if you're counting ninety pills, you're getting ninety pills. You have a double a double check on the count.
Deborah Weinswig (15:46)
Interesting. I mean, it it is interesting if we start to think about how we're gonna think about kind of being in stock and on-shelf availability, kind of back of house, front-of-house. But I feel like you know, in 25 GLP1s came on to the the market so quickly that right consumer demand for front-of-house products changed so rapidly that it was difficult for the retailers to stay on top of that.
When did you first realize this wasn't just kind of a pharmacy story, but like a total store story?
Steve Perlowski (16:15)
Well here's here's the funny thing. We didn't want to dispense GLP ones because we lost money on every one we s we sold.
be based on the contracts we had with with the PBMs. F every
Deborah Weinswig (16:25)
Okay.
Steve Perlowski (16:25)
pharmacy lost money on every GLP one they sold. So, you know, there are some some chains that said we you know, I'm sorry we don't stock the item. And that's that's kind of how the the compounders got their foot in the door.
Now the contracts have changed because, you know, now we're now we we see what the the volume's gonna be and we've renegotiated the contract. So now retailers or pharmacies are saying, yeah, well, you know, we we support you. And you know, the other thing that that happened is there's a great recognition that there is a significant lack of
adherence to the medication.
So and you know and and you know that that's caused by the price, but you know, insurance more insurance companies are now are now covering. you know, and then in you've got the federal pro bridge program going on now. So for seniors, so you know it's the the the affordability issue is being addressed. there also was a supply issue
you know, with Lilly and with Novo, which again gave gave access to the compounders, but that you know the FDA is is is getting tough on the compounders of GLP ones, you know, for for patent infringement.
so there's there's some issues, you know, a number of companies have been sent cease and desist letters. but then, you know, so so that was you know, that was then, you know, but as as we saw the side effects, I don't think here's what I don't I don't know that the the companies spoke to
the other the CPG companies
Deborah Weinswig (18:03)
Yeah.
Steve Perlowski (18:03)
to say, you know, we're we're coming out with a blockbuster drug that's gonna have side effects and you know this is gonna be a big opportunity for you. and but I that's that's now been recognized.
And you know, you're you see many pharmacies will will put in end caps of com not competing products, but also a a variety of products, whether it's it's anti-nausea pills or constipate you know, something for constipation, probiotics, you know, those c you know, to to improve gut health that that are, you know, right adjacent to the pharmacy.
And I think what we'll see is I think we'll see a gut health or GLP one category manager and
Deborah Weinswig (18:48)
Hmm.
Steve Perlowski (18:49)
within retail. And that person's job is to understand the side effects and to create an arrangement of products that
you know, that makes it very easy for the GLP one patient to shop the assortment to get the products and information they need to feel better faster. And stay
Deborah Weinswig (19:07)
D is
Steve Perlowski (19:08)
on the and stay adherent to the product.
Deborah Weinswig (19:10)
Which is a biggest
Do you think I I've I've thought about this more than I care to mention, but where do you think the right places to also sell that product, right? How is the consumer thinking about the purchase of let's say very high protein content or whatnot, like when they're shopping? Because I'll tell you like when I saw protein water, I was like, e everything I think I knew is like
But I I need to unlearn.
Steve Perlowski (19:34)
There's protein chips now and there's protein sodas. Car
Deborah Weinswig (19:38)
Ha ha.
Steve Perlowski (19:39)
protein carbonated beverages. So you know the CPG manufacturers are are catching on. And and you're gonna
Deborah Weinswig (19:45)
I I can see that. I mean
Steve Perlowski (19:47)
see a lot of fiber too.
Deborah Weinswig (19:48)
Yeah. yeah. No, that's so it's so do we we ultimately 'cause there was of of course a lot of concern, right, in terms of the decrease in terms of overall consumption and what they ultimately meant for C B G, but I will say, I mean, hey, they've they've always been great at R and D, but how quickly in some cases they were able to to lean into that, I I think your point about having kind of a GLP one category manager is really interesting.
And so is it that we've just created a whole a whole new category?
Steve Perlowski (20:14)
Yeah, a hundred percent. And you know, and and the challenge and and I argue with with my merchants from time to time about this, but I'm not the biggest fan of organizing my store by product.
I'd like to think of merchandising my store by life stage, then I can create experiences. you know, if if you look if you've ever been in Holland and Barrett, over in the UK, they've created a women's health category that's filled with a whole variety of products that they merchandise, you know, under the banner of women's health, all the different products that a woman might need. and it's been so successful that
you know you know boots and a couple other retailers are in the process of trying to do something similar so I you know I think it if if you're if you think about the future of retail brick and mortar it's creating experiences it's you know you you you have to be efficient you have to be convenient but you also have to be experiential
And if I I can provide you with in in the GLP one category, one an efficient shop information that you didn't know, and and curate products that you didn't know you even needed.
then I I've got I've got you on my side. You know the I the the corollary is diabetics. They shop 17 different categories in a drugstore and they're in 17 different aisles. So how many sales am I missing by not having all those products together on a visit?
Deborah Weinswig (21:40)
lot. Yeah, I mean it's almost
Steve Perlowski (21:41)
Probably.
Deborah Weinswig (21:42)
it it's interesting because
the more that we can remove friction and drive ease. And then I also think I'm a very big believer in like the gamification aspect of it. And and it just it's about making shopping fun again, right? Or if it whatever was fun, but making it fun and I mean and it was interesting. I was recently in a Walmart. I'm like a Walmart Plus member and I had to like log in to use Wi Fi in the store. I get I go to the self checkout and
it it like knows me, right? I'm like, this is like the coolest thing, right? And it's like, go just scan your QR code, right? That has your payment or you know, just if you're comfortable with your payment. And I'm like, talk about like removing friction. like, it it just and and it was it was kind of very like it was not what you expected. Now the next time I go it may not be as interesting, but I was like, you know, these are some of the things that you start to see where you're improving the overall customer experience. Now
I do think you bring up something that I haven't heard that much, which is around providing information to the consumer on either a condition that they have or, you know, just as you look at the items in their cart. I feel like years ago Kroger had talked about this, but right, other other problems, you know, kind of rise to the top to solve. What what are you seeing that different retailers or brands or healthcare companies are doing to kind of
Help the consumer like bridge their knowledge gap.
Steve Perlowski (22:58)
So I mean I I go back to when I was a kid and this is Stone Ages, I know.
But when you went in to the pharmacy and talked to your pharmacist and get a prescription, the pharmacist also walked around and took you to the OTC aisle, like if you had strep to make sure you had throat lozenges, Kleenex, and and you know, kids' Tylenol to make sure that you were addressing all of the pain points. And so he built the market basket. You know, then then what happened is they they started giving out people.
pieces
of paper to say, you know, these these might be something you might be interested in while we're filling your prescription to help you feel better faster. And and by the way, there was always a lollipop or a candy bar added
Deborah Weinswig (23:44)
Always.
Steve Perlowski (23:45)
added to the list. and and it and that the the the pharmacists have gotten so busy that
that they they don't have that chance. and
You know, there we used to have an old VP of pharmacy here who said, you know, a pharmacist could make more money for my chain if he was just he or she would work the OTC aisle versus stand behind the pharmacy counter. Because so many people came up for advice and by the way, I think the number is I think it's seventy-one percent of the of the recommendations that a pharmacist makes, the patient buys.
Deborah Weinswig (24:18)
That's that's insane.
you reminded me I was in Canada a very large retailer had a nurse nurse practitioner up at the front. And you know, before you kind of check out, and it was unbelievable how many people were going up and asking her questions. And she I mean it'd be great if they'd had like a runner versus her running back and forth. But
you could see the amount that people were adding to their baskets because they had a a question that they needed answered. She was standing right there, white lab coat the whole thing, and so took on that that authority figure. I do think that there is, you know, we increasingly think about ROI on spend
But that seems to me not only do does it make the visit you know, more sticky, but you're starting to learn about products maybe the store didn't have and also you may may feel better or, you know, ultimately live longer because you had that one conversation.
So if you think about kind of where where we are today, July of twenty-sixth, and where we were six years ago, right in the middle of the pandemic, what do you think where do you think things are in six years and how do people shop? How do they get their products? What what information is available to them? And just what's this like
What does longevity look like?
Steve Perlowski (25:29)
sixty four thousand dollar question.
You know, I I I would say the the role of the pharmacist has only been enhanced over the last six years.
you know, pharmacists and pharmacy technicians can now do vaccines and a and a much broader variety of vaccines. and you know to the point where you know it's it's now the number one destination for a whole boatload of of different vaccines in the US I you know and then the the other thing that's going on right now
is there's a big push, we call it test to treat, which is allowing the pharmacist to practice at the highest level of their degree, where a pharmacist could give, you know, i it's typically there's there's seven ailments that a pharmacist can test and it's it's stuff like strep and flu and when they get a positive test, they can then prescribe the antibiotic
or the prescription that the patient will take and you know and that way the you know the patient doesn't have to wait to get in to see the primary care physician. it could be in a rural health setting where you know the the nearest physician you know is thirty forty miles away, a couple different counties away and you can't get in to see and but you can get always get in to see your pharmacist. So I
I think that's that's the next phase that you know that certainly we and our members are working on is to enact legislation at the state level to to give us that that authority and then also working to make sure we can do the medical billing so we can get paid for it.
Deborah Weinswig (27:05)
Hm.
That that almost puts pharmacy and pharmacists in a
more I mean, already incredibly elevated in the community, but the ability not to just listen to your challenges and try to help you solve them, right? But can solve them in a different way and do it very quickly. That's I mean, it seems like it's it's a win win win. What's what are what are some of the the issues that are slowing that down?
Steve Perlowski (27:28)
there may be other healthcare professionals that
Deborah Weinswig (27:32)
Don't don't look at it as favorably as understood,
very much, very much understood. And then as the consumer, I think, continues to increasingly think about how they spend their time, do you think about I and there's gonna be a better I I feel like last mile is kind of like a a last year's term, but how do they think about
delivery of these products, especially if they can do like a telehealth visit. What does what does kind of the relationship between the customer and the retailer look like? And increasingly how right, like what does that look like in terms of, you know, I I'm gonna use last mile for now, delivery to the the patient slash customer.
Steve Perlowski (28:10)
So I think, you know, the for as long as I've been at NACDS, the pharmacist has been the second or third most trusted professional in America. And trust is is something that you can't compete with if you don't if you don't have that relationship. And so that's why I think
There it's been a challenge for a number of pure play companies
to enter into the world a and you know and haven't entered as quickly as one might have thought, because there is this relationship between the pharmacist and patient. And and the patient knows they can go in the pharmacist and ask questions and take up as much time as the pharmacist will give them and they don't have to pay the pharmacist a penny. So where else are you gonna get that kind of advice?
on your on your schedule.
Deborah Weinswig (28:59)
It's an excellent point.
Steve Perlowski (29:00)
So so you having that pharmacist and having that physical location is is really important and when the pharmacist sees you, they can't I mean they're trained to also do a visual analysis of the patient that you can't get over a televisit.
So you may be sweating that the that the the physician or the pharmacist can see and say, do you have a fever? That you're not gonna get during a televisit or may not get. You may not even know you're hot in a in a you're you have a fever in a in a televisit. You put your hand to your forehead and you say, no, I'm fine. But
you you know, your your body gives off other signals. and and then the other thing is you also have the ability to not forget products that you might forget that you're ordering online. so there's you know the the val the value of the store of the physical box
whether you know, doesn't matter what size the box is, is incredibly important to to your healthcare journey.
Deborah Weinswig (30:06)
Wewrote a very in-depth report around having access to a clinic or you know just kind of in store health services or diagnosis etc and you know at the time right there there were projections that were you know let's just say on the high end now we've lost a lot of pharmacies right like physical locations and
It it just seems like something has held the industry back. How how do you think about that?
Steve Perlowski (30:33)
well there's there's no doubt that that you know the industry is contracting. and you know the frankly the it's the economics that are making it contract, it's not the volume. you know, the volume was there for a lot of companies that are no longer in business. They just couldn't make any money, you know, with what they were being reimbursed.
you know, we we've we've done some work actually it's up on our website, that in rural populations eighty-three percent of the consumers are scared to death that their pharmacy's gonna close, which is the same number if their physician goes out of business and it's only one point less than if their local hospital goes out of business. So
Yeah.
Deborah Weinswig (31:15)
Those
are not good things to be like I mean, because it goes back to there's there's things you worry about that you can control. things that you worry about you can't control. All that is outside of your control factor, which has to be really stressful for the consumer ultimately.
Steve Perlowski (31:27)
Yeah. Yep. They're I mean they're they're concerned where they're especially in rural communities, where are they gonna get their health care? And you know, the the the the true answer is in their in their pharmacy.
Deborah Weinswig (31:38)
Yeah. I mean it's absolutely I mean it's it's interesting, Steve. I mean, you've always I mean since I've known you, you're you're asking the questions that I'm just I'm gonna just use Silicon Valley for a proxy for for next generation tech that that they're kind of talking about but haven't solved yet. and you've been an intricate and incredibly important member of our Coresight AI Council. When you sit in those conversations, what's the gap between what
tech companies are talking about and what the pharmacy chains can actually not only do but absorb right now, right? Like I mean they're they they have so many different priorities. How do they cascade them?
Steve Perlowski (32:13)
Yeah, great question. The and then the the the one thing that overlays all of it is the AI world is changing so fast that even if you studied it you're still missing half the advances. So you know retailers in general are are
probably one of the most risk resistant enterprises there is in in business today. And so the the challenge and you know what that what that causes us to do is to take a while to make a decision. And and when we then are at a point where we're ready to make a decision
the technology's already two generations or three generations ahead. and and and so then I then I go back to the tech companies and the tech companies are filled with brilliant people but they don't know the industry they're selling to. So there's there's a total miscommunication in terms of we're not using we're using the same words but they don't have the same meaning.
And so
So that I mean that's a big disconnect in that you know what what I need is is and what I'm saying translates differently to what you're hearing, to what you're building, to what comes out on the market. Now I'm I'm hopeful we have we have a trade show coming up in three weeks.
and we're we're now up to sixty comp sixty AI sixty companies that have AI in their solutions that will be exhibiting on the floor.
Deborah Weinswig (33:37)
And that's up from
how many a year ago?
Steve Perlowski (33:39)
Less than ten.
Deborah Weinswig (33:40)
I mean that that to me, when you shared that with me, that was probably one of the most interesting things I've heard in terms of going back to how right 'cause they're they're attending a pharmacy show, right? And and ultimately you're empowering the the brands, you're empowering kind of pharma, you're empowering right, like retail, it's it's it's really interesting. I mean I
ICSC this year for the first time, right? They're their L V C C in Las Vegas, right? They got space, right? And they carved out the space and made it kind of like a prop tech pavilion. And I think the same thing, they were surprised at how many companies were there, but also how much the attendees gained from that. And I think with AI, there's a whole kind of teaching component. Of course everybody's like there's a selling component, but but it's it's different.
And and as you said, right, like, you know, you're gonna build something and it's you know, you're you're three generations behind already. So I think the whole build versus buy is an important question. And and when you're talking to a lot of these companies, how are they thinking about like who owns AI in the organization, where it falls on their priority list and whether it's build or buy or or what do they do?
Steve Perlowski (34:47)
Well, you know, the the the the one additional caveat we have is we have to be HIPAA compliant.
And so when you're talking about letting AI into your building, how do you carve out
Or how do you carve in patient records?
Because my guess is if we ever figured out how to monetize patient records.
we could have a different kind of business than we have today.
Deborah Weinswig (35:12)
Yeah, and I I spoke to somebody
Steve Perlowski (35:13)
And and
be tot and let me also say hundred percent HIPAA compliant, no personalized information ever going away. But you get that's that's the fear. I mean we talk about cyber, you know, my my bigger fear is AI screws up. And and you know, God forbid it, you know, it it gives away somebody's famous prescription records.
Deborah Weinswig (35:34)
Right. Right. I mean it's it it's yeah, I mean those are those are absolutely all all things that I think have kept all of us up at night in terms of I hey, we we all I mean right, I'm I'm sure we've all had that, you know, kind of chat or claude moment where we're like, well, don't you remember I and right, you're in the same chat. It's not like you're you're in a different or project, right? You're in the same co work.
Whatever it might be, codex. And you're like, well, I I just said this back here. yeah, yeah, yeah. That's right. And so you're like, but but we're just starting to head in a completely different direction. So I I agree with you. All right. We've got our our last five minutes down to my favorite part, which is our our lightning round. So you can pass, you can ask for a different question, but you know, I I want, you know, say what kind of comes first and we can move on if it's not an appropriate question for you. All right.
Starting easy, number one, coffee order.
Steve Perlowski (36:23)
Ooh, dark roast skim milk and a d touch of natural sugar.
Deborah Weinswig (36:28)
Nice. Okay. Two, one retail acronym you wish would just retire.
Steve Perlowski (36:32)
ECR.
Deborah Weinswig (36:32)
number three, best piece of advice you got early in your NACDS career.
Steve Perlowski (36:37)
Listen and ask smart questions.
Deborah Weinswig (36:39)
Good advice for all of us. number four, this is a tough one drugstore or supermarket pharmacy, which wins on customer experience?
Steve Perlowski (36:46)
I'm gonna say it depends. Well
Deborah Weinswig (36:48)
The defense are both or both you know.
Steve Perlowski (36:50)
I I I ha I have seen both do excellent jobs.
Deborah Weinswig (36:53)
Same, same. number five, GLP ones, are they the biggest retail story of the year or are they overhyped?
Steve Perlowski (36:59)
this might be a little bit longer answer than you want. Are you familiar with Professor Scott Galloway?
Deborah Weinswig (37:04)
Yes.
Steve Perlowski (37:04)
I was at a presentation he made last month where he said GLP ones will affect the CPG industry more than AI will.
Deborah Weinswig (37:13)
Yeah, I I think that's I mean people are
Steve Perlowski (37:15)
I just
Deborah Weinswig (37:16)
I and we should just double click on this. I I mean, what we're seeing with AI, right, ultimately is a lot of experimenting. I mean, we're still haven't gotten over the build versus buy question. How are you measuring the actual ROI? How are you benchmarking? And then how are you communicating that throughout the organization? So I think it's good because it's opened up this kind of
You know, innovation isn't owned by anybody anymore. It's like throughout the organization, I think that's really healthy. But with GLP ones, I mean, that's here and now. And and we're seeing, I I attend a lot of healthcare research presentations because something I'm personally interested in. So I was in one the other day actually by Columbia University, and it like there's a whole white paper that they delivered and just talked about, right? Like how many
conditions it could ultimately treat and and what that could ultimately look like and right whether it's liver health or kidney health, you know, the inf I mean there there's so
Steve Perlowski (38:04)
Addiction.
Deborah Weinswig (38:05)
Yeah. There's so many it and it's and it's fascinating. And then and then I'm totally going off on a tangent, but had to at some point. So I I mean I think what's so interesting is we work with that's why we get along so well.
Steve Perlowski (38:14)
Why we love you, huh?
Deborah Weinswig (38:17)
but but we talked to a lot of restaurant groups
And they're like, we can now charge the same amount of money for a mocktail as a cocktail. And so, and right, when people used to go, right, you'd go to dinner and then you'd go out and you go out and you go out. Like, dinner is like the destination. And so you're seeing change in almost everything. And and that I think has been so incredibly interesting. But I still believe, and I I I just think that, right.
Ultimately your members have the opportunity of a lifetime, truly, to lean in and I I just hope that they can kind of get their their fair share. That's that's what I hope. All right, number six. AI overhyped or underhyped in retail right now? Or appropriately hyped.
Steve Perlowski (38:58)
I think it depends on the company.
Deborah Weinswig (39:00)
I think you're right. size, what those leadership look like, is there quote unquote an owner? Is it in tech? Is it the business? Yeah. number seven, one committee meeting topic you never get tired of.
Steve Perlowski (39:10)
Consumer.
Deborah Weinswig (39:10)
Hmm. I like that. Yeah, it was always changing. number eight, Cornell or Kellogg, which executive program left a bigger mark?
Steve Perlowski (39:17)
Well, you know, I'm gonna have to say Cornell. And the reason is the class I went through, I ended up getting really close to people that ended up being the president of Car Drug, the president of Kmart President
Deborah Weinswig (39:29)
Wow.
Steve Perlowski (39:30)
President So, you know, we we we did a a mock computer game of who could run the best drugstore chain and and of course I was on the winner. But
Deborah Weinswig (39:38)
I love that.
Steve Perlowski (39:39)
Not not for anything I did, but but it was i it was a it was a fun experience. they both were truly great programs, so.
Deborah Weinswig (39:46)
That's very cool. All right. number nine, and I'm gonna make this nine A and nine B, a word that describes the NACDS annual meeting.
Steve Perlowski (39:53)
Productive.
Deborah Weinswig (39:54)
And how would you compare that to T S E and for those of you who don't know, Total Store Expo, which is in Boston, I think it's the August fifteenth to seventeenth if memory serves me correct.
Steve Perlowski (40:03)
Yep. So one I would dec I would describe more as strategic and the other
Deborah Weinswig (40:07)
Yeah.
Steve Perlowski (40:08)
I would describe more as tactical.
Deborah Weinswig (40:09)
It's interesting, so you go to learn about it and then you can figure out what to do about it at T S E.
Steve Perlowski (40:13)
Yeah, well you you set the plan
Deborah Weinswig (40:15)
Mm.
Steve Perlowski (40:15)
and then you execute the plan.
Deborah Weinswig (40:16)
I love that. That's and and that's very hard to do. And I think that's why I mean the events you guys host are so well attended because I think people get so much out of them and like they continue. And as do the relationships. So I urge everybody to go to T S E in Boston August fifteenth to seventeenth. You won't regret it. All right, lastly, what's on your desk right now that you can't work without?
Steve Perlowski (40:34)
These
Deborah Weinswig (40:35)
Ha ha ha.
Steve Perlowski (40:36)
if I can't see it I can't process it.
Deborah Weinswig (40:39)
I
that that is although I find these days I'm like, you know, if I just make the font big enough that I don't really need to wear them and you know, there maybe maybe there's other ways to process this. All right. So, Steve, as we as we close on our amazing conversation, what what advice do you have to tech startups that are really interested in the sector in terms of how to approach it? And I think we already talked about some of the biggest problems to solve, but if you have any other advice.
Steve Perlowski (41:04)
I'd I'd go with listen and ask smart questions. Well
Deborah Weinswig (41:07)
And with yeah.
Steve Perlowski (41:10)
don't walk don't walk in thinking you have the solution.
Deborah Weinswig (41:13)
Yeah. Yeah, 'cause you might just I you know what, I I'm glad you I'm glad we're ending there. Last year at TSE, right, with Meet the Market, having the opportunity to have a real conversation where where everyone is there to kind of start to think about solving problems and and how ready they wanted to share their their problems with you, which were way in some cases way bigger and way different than what you thought.
But there was a posity I think going back to being at T S E that they're like, We have this problem, haven't figured it out yet, but that's that's why we're here. And so that's why all of you should go. And Steve with that, thank you for joining us. Always a pleasure.
Steve Perlowski (41:47)
Thank you for having me. Great to see you, Deb.
Deborah Weinswig (41:49)
Thanks.
Philip Moore (41:49)
Thanks, Deborah, and thank you for joining us. If you enjoyed this episode of Retaili$tic check out our full catalog of interviews with retail industry leaders and set your notifications so you don't miss any of our upcoming episodes. Have a wonderful week.