[00:00:00] Suzy Davidkhanian: Join EMARKETER The Future of Digital Summit on September 15th in New York City for a full day of research, expert analysis, and executive conversations on AI visibility, commerce media, and the future of marketing. Click the registration link in the show notes for tickets Hi, everyone. Today is Wednesday, July 22nd.

[00:00:21] Welcome to EMARKETER's weekly retail show, Reimagining Retail. This is the show where we talk about how retail collides with every part of our lives. And I'm your host, Suzy Davidkhanian. And on today's episode, we're exploring what happens when changing consumer behavior forces retailers to rethink the way they do their business.

[00:00:39] Joining me in the studio are podcast regular Rachel Wolff. Hey, Rachel. Hello. And for his first time on our retail show, Rajeev Leventhal, who covers all things healthcare and pharma. Hey, Rajeev.

[00:00:52] Rajiv Leventhal: Hey, Suzy, Rachel. It's an honor to be here.

[00:00:54] Suzy Davidkhanian: We're so excited to have you. Okay, so a recent Wall Street Journal story caught my attention.

[00:00:59] [00:01:00] Some bridal boutiques are asking brides to sign waivers if they expect to lose weight before their wedding. So like if you're taking GLP-1s, you gotta let us know. While David's Bridal just launched the exact opposite, and they're doing this whole fit guarantee. So as GLP-1s become even more accessible in mainstream, stories like this are becoming so much more common, which got us all thinking.

[00:01:22] We spent so much time thinking about what these drugs mean to food and beverage companies, and obviously healthcare, but maybe that's just too narrow. So today we're using the growing adoption of GLP-1s as a jumping-off point to explore how changing consumer behaviors are reshaping the retail playbook, from ingredients and package sizes to merchandising and marketing, and even the customer experience.

[00:01:47] As well as all the assumptions that retailers are making about these consumers that they serve, and maybe debunk some. Okay, but before we get started, what's one GLP-1 headline or story over the past few months that made [00:02:00] you stop and think, "Oh, I was not expecting that"? So you guys know mine was the David Bridals.

[00:02:04] I was not expecting the wedding industry to be impacted so severely. What about you?

[00:02:10] Rajiv Leventhal: It's nothing to do with retail, not really, not at least, uh, super close to it, but maybe, maybe adjacent. How it's going to affect divorce rates. Ah. So people who are overweight suddenly lose weight. They feel a new renewed sense of confidence and energy, and does that lead to them maybe seeking a relationship outside of their marriage, or I, I- You just

[00:02:37] Suzy Davidkhanian: blew my mind.

[00:02:38] Rajiv Leventhal: I don't think there's a definitive conclusion. I did not think about that. But it makes you think, right? Not enough

[00:02:42] Rachel Wolff: data yet. Yeah.

[00:02:43] Suzy Davidkhanian: Wow. It really is a lot of ripple effects. What about you, Rachel?

[00:02:46] Rachel Wolff: Okay, so mine, I'm going back to retail, and that is, um, Americans on GLP-1s overwhelming retailers with their nonstop returns, and we'll probably touch on this later in the pod, but that was one that really grabbed my attention.

[00:02:57] Suzy Davidkhanian: The returns, which is a structural [00:03:00] problem for retailers. Rajeev, we actually have you on the pod because you cover the healthcare angle. And so it seems like GLP-1s are everywhere right now. Everyone's talking about it. Um, if we can move beyond those headlines, what's driving this latest wave of momentum, and why do you think it's becoming a lasting shift rather than just- Another healthcare trend

[00:03:19] Rajiv Leventhal: Yeah.

[00:03:19] So it's important to remember that these treatments have been popular for a few years now, but you're right, there has been a recent surge. A, a Gallup poll just came out last month, said there's more, more people are on GLP-1s now than ever before. So what's driving that? I, I think there's a, a few key factors.

[00:03:36] First is, um, people are just getting more and more data and information on how effective the GLP-1s are at helping people lose weight. The clinical trial data shows that bet- you can lose between 10 and 15% of your weight at about a year, maybe 15 months or so. So that's really significant, and while we kind of knew, we did know that already, more celebrity use, more [00:04:00] influencer use, more people on social media documenting their weight loss journey, uh, these treatments really, really work.

[00:04:07] So, uh, more people are becoming aware and asking their doctors for prescriptions. And related to that, I think another big factor is, uh, the GL- GLP-1s are, are so easy to get. Um, it's not just for people who are really obese and overweight, even though that might sound, uh, like a contradiction, because they are FDA approved for people who are obese and overweight.

[00:04:28] But, um, y- there are so many telehealth platforms and online websites where you can kinda just... S- Suzy, we, we were talking about it the other day. You used the phrase weasel your way into prescriptions. I did. It is so true. You can weasel your way into prescriptions. You might not even need a video call.

[00:04:43] There was a study the other day that, that we covered that looked at people who, um, like secret shopper type study, where people, um, or someone, you know, kind of pretended to be a, uh, a patient, uh, who needed to lose weight and just kind of game the system and was able to [00:05:00] get a prescription on like 45 out of 49 online websites that they went to.

[00:05:04] Oh my God. So it is really easy and, and you people... It's not just for people looking to lose 50 pounds. It's for people looking to lose a few pounds and, um, it's become much more of a, a lifestyle tre- type treatment than actually for a medical condition.

[00:05:17] Rachel Wolff: Yeah. I would say probably most people at this point know somebody who either is on GLP-1s or has been on GLP-1s, and there's just not as much of a stigma about it anymore, as you said.

[00:05:27] You know, because you have celebrities being open about their use and influencers and so on. And so I think it's almost like, uh, the dam has been broken in a way. Yeah. Um, but, you know, there are obviously caveats to that, which is that it is still a minority of the US population that is, uh, using these drugs.

[00:05:44] Suzy Davidkhanian: Well, and for me, one of the things you guys have both said, I'm just gonna say it a little bit differently, it's like- Now it's okay the stigma's gone, but it's like so social and it's so prevalent and um it's become more than losing weight maybe you're taking it for [00:06:00] different reasons whether it's wellness or whether it's you know you have to go to a wedding in a couple of weeks or in a couple of months and you want to look great.

[00:06:07] So beyond being the bride, but just even folks who are- are taking it uh for themselves for those short term hits which brought you when we were talking brought us to this other point around and you sort of talked about it too just now people are on it and they might be off of it and then they go back on it and it's not just about losing twenty percent.

[00:06:28] Sometimes it's just about losing two pounds. Well no, obviously not two pounds ten pounds.

[00:06:31] Rajiv Leventhal: Yeah.

[00:06:32] Suzy Davidkhanian: Fifteen pounds So when we first started talking about GLP-1s, it really was about people eating less, and it was, it felt like it was a lot more about the health benefits in terms of diabetes, obesity. But now it's really a much bigger story, and it's about how people are living.

[00:06:49] And we, we just covered some, um, CPG, uh, investor calls. Everyone's starting to talk about it more and more. GLP-1s is becoming part of a lot of business [00:07:00] decisions. But what do you guys think is some of the biggest misconceptions that retailers still have about how these drugs are changing consumer behavior?

[00:07:08] Rajiv Leventhal: Yeah. I think, uh, you c- alluded to it a little bit, Suzy, but it's not really an appetite story or a customer segment that's just going to lose weight consistently and be on these medications, even though of course that's what the pharmaceutical companies would like, if the c- if the patient was on it forever.

[00:07:24] But, uh, the data shows, as y- as you noted, uh, I think only one-third of GLP-1 patients are actually still on their medication regimen like 13 months in-

[00:07:34] Rachel Wolff: Wow ...

[00:07:34] Rajiv Leventhal: according to a recent study. So, um, I think the misconception is that it's not, you know, an ap- uh, necessarily a, uh, eating less story. Um, it's turned into a really, like a l- a lifestyle and spending re- uh, reallocation story.

[00:07:47] Um, and everyone's at a l- uh, everyone is gonna be at a different stage of their GLP-1 journey. Some may stop. They might regain weight and then g- come back on. Uh, while that's happening, [00:08:00] others might start at a, at a, you know, th- their first treatment journey. So, um, you know, I, I think that you, you as a retailer, as a brand, you have to think about things like, uh, is, is the pers- is the consumer in the journey where, a part of their journey where they're experiencing, you know, side effects?

[00:08:19] Are they in the part of their journey where they're losing a lot of weight? Are they microdosing? Are they going to maintenance dosing? Are they, you know, have they stopped using and regained weight? And thinking about that, uh, life cycle I think is much more important than thinking of it as a static customer segment.

[00:08:33] Rachel Wolff: Yeah. I think, you know, I agree with Rajiv that companies can't think of it as, you know, this is just a one and done, you're on the drugs, and so your behavior is gonna change forever. I think, you know, the bigger frame that retailers should have is that, you know, yes, people are using GLP-1s, but not everybody is taking GLP-1s at the same time, so how do you make sure that you have products that fit their entire journey?

[00:08:56] And also, how do you make sure that you're not alienating the other portion of [00:09:00] your customer base that is not on GLP-1s and doesn't have plans to take GLP-1s? And I think for me, I wonder if some retailers are leaning too far into the, you know, GLP-1s are gonna change everything type of mindset.

[00:09:12] Suzy Davidkhanian: I mean, there's so much to unpack there.

[00:09:13] First, let's start with you gave us the statistic, Rajiv, when we were chatting ahead of time, around how many peop- what percentage of the population is on the drug at any one point in time. It's not that high in the end.

[00:09:24] Rajiv Leventhal: It looks like it's about 12 to 15%. Um, but y- th-there's potentially tens of millions of people.

[00:09:32] That's a, a, a much larger pool of, uh, uh, population of people than, um, you know, what we saw two years ago. So I think it does. I agree that maybe there's some overcorrecting and maybe too much, uh, GLP-1 type messaging out there, but you can kinda see why because, uh, of how this has just become a, such a, a, a cultural movement, right?

[00:09:55] And it's, you know, so many people are talking about it. And, and yeah, there, there's probably an [00:10:00] argument that maybe there's too much of, of the GLP-1 type marketing going on. Um, at the same time, it, it is tens of millions of people potentially. Yeah.

[00:10:08] Suzy Davidkhanian: Or maybe like you were saying about overcorrection, Rachel, it's more like if you understood the motivation behind...

[00:10:14] And y- your article was amazing, right? The halo effect of confidence means that something, I might do something differently now that I'm more confident. Yeah. Maybe not get a divorce, but something else, right? Buy a new type of bathing suit that I haven't worn in a long time, right? Yeah. And so, like, how can retailers think about their strategies and their playbook with this idea of the motivation behind it so that you do capture all the new folks that might be coming to you that weren't before without alienating the people that are already coming to you?

[00:10:42] Sure.

[00:10:42] Rachel Wolff: Right, and I think that also comes down to understanding what it is exactly that the GLP-1 consumer needs, right? And it's not just about making sure you have smaller portion sizes because that's just one element of it. And, you know, you see a lot of this in apparel, for example. The fit changes of these consumers change as [00:11:00] well.

[00:11:00] It's not just that they need smaller sizes, but the types of features that they're looking for in products are also shifting. There's one example about a bra company that is rolling out new products to, you know, help support consumers who have maybe lost a little bit of elasticity or, like, their body has changed in ways that they didn't anticipate.

[00:11:17] And I think that companies have to know what those changes are in order to market and to suit the needs of those consumers effectively.

[00:11:25] Rajiv Leventhal: We're, we're seeing some interesting data come out that, uh, while they are, while GLP-1 users are eating less, they're actually trading up and spending more in certain, uh, categories.

[00:11:35] So for example, fresh food, produce. Um, so it's, it's almost like you can, maybe this is an oversimplification, but, um, I'm eating one less meal a day, but I want the meals that I am eating to really matter and to really taste taste, taste great. Whereas maybe if you eat three meals a day, okay, you can sorta throw, throw one away so a little- Yeah

[00:11:56] you know. So I think that's, that's a big factor too.

[00:11:58] Rachel Wolff: Yeah, and a similar trend in dining [00:12:00] as well where, you know, there's evidence that GLP-1 users are maybe not going out casually as much, but they're going out more socially. They're meeting with friends more often or for work functions. So again, you know, like, how do you figure out how to change the messaging, um, to account for the fact that these consumers are spending and could actually spend more than they were before?

[00:12:18] Suzy Davidkhanian: So it sounds like really the, the big-

[00:12:29] The big takeaway in my mind is that your existing customers, and it's not new, right, their needs are evolving. This is one other factor, and that you really truly need to understand your customer base versus think about this as an actual customer segment. That said, we do know, and you pointed to it up top about the returns, and we do know maybe resale will be impacted 'cause there'll be more clothes coming into the resale market.

[00:12:47] As consumers are changing how they eat, how they shop, how they live, they are so much more intentional now. What parts of the retail playbook do you think we need to rewrite, Rachel? Is it something around, you know, rethinking about [00:13:00] merchandising, products, marketing, loyalty?

[00:13:04] Rachel Wolff: I think definitely merchandising.

[00:13:06] I mean, if you have a sizable segment of the population that doesn't know what size they are at any given moment in time, and that, you know, could change week to week, as a apparel retailer in particular, you have to think about how do you make sure that all of the information that you're giving to these consumers is accurate enough so that they can make decisions so that, you know, you as a retailer aren't faced with ridiculously high return rates, um And, you know, that requires investments in other areas like AR/VR, thinking maybe you rely more on, uh, gen AI to help you produce, um, photography and, and predict where people could end up at any point in their, uh, weight loss journey.

[00:13:44] Um, and I think it also requires companies maybe to just offer more high-touch service and have, you know, more experts on hand who can help guide people through this process, whether it's a personal stylist maybe, or a health and wellness expert who can help with [00:14:00] diet, and I think that will all become much more important.

[00:14:03] Rajiv Leventhal: I think that's a great point, and if, uh, if you also think about it, many re- retailers operate pharmacy businesses. Mm-hmm. So you're gonna experience increased foot traffic of people coming in to pick up their medications. What does that mean? Well, that means a conversation with a pharmacist, maybe scooping up some over-the, uh, over-the-counter health products.

[00:14:23] Maybe they're having, like, some gastrointestinal issues, which is a top side effect. Um, and then like Rachel mentioned, even beyond that, dietician support, uh, nutrition support. Walmart is, uh, Walmart and ShopRite have actually rolled out, um, both in, you know, in the pharmacy business, they've rolled out sort of, uh, health and, and diet type guidance and counseling specifically for GLP-1 users.

[00:14:47] And, uh, it'll make sense 'cause, uh, these folks are going to come into your store more and, uh, their shopping needs and habits have changed.

[00:14:55] Suzy Davidkhanian: So it's interesting 'cause it sounds like it's not just about the pack size or the protein [00:15:00] included or, you know, more fiber, but it's also really redesigning what, how you're servicing folks and also what you're offering potentially.

[00:15:09] I think marketers really often fall into the trap of treating everyone the same, and we talked about it as Gen Z. All Gen Z-ers do the same thing. All value shoppers look for the same thing. What do we do? How can we impress upon people not to make that same mistake for GLP-1 users?

[00:15:24] Rajiv Leventhal: Yeah, I think it's, again, really just important to consider that GLP-1 use isn't necessarily a permanent state.

[00:15:32] Um, and that, you know, you, you, we haven't even talked about, like, the, um... There's a lot of people on these drugs that, that are, are added up into the total percentage that are actually taking the drugs for diabetes instead. So what does that user look like for someone who's taking it for, for weight loss?

[00:15:47] Um, you know, and a new user navigating side effect shops differently than someone who's been on med- medication for a year and is really used to it and is comfortable with the, uh, you know, potential, what the side effects they're potentially [00:16:00] experiencing. And that might be different than someone who's reached their goal and is now just in maintenance mode.

[00:16:04] So you just-- You're right. You, you can't think of it as, um, just like, you know, marketers might think of, you know, just Gen Z or just millennials. You have to think of it as that fluid customer journey.

[00:16:14] Rachel Wolff: Yeah. And I think related to that, you have to recognize that not every GLP-1 user wants to be reminded that they're on GLP-1s.

[00:16:21] Like, there is still, you know, we talked, there's less stigma, but I think there is still considerable hesitance among a lot of people to publicly proclaim that, right? And how maybe as a brand or retailer, you don't put, like, GLP-1 friendly on the package, but you still make it clear through your messaging and, you know, the attributes that you emphasize that it is friendly to GLP-1s.

[00:16:41] Rajiv Leventhal: It's interesting because some of the-- I saw you wrote a piece on this the other day, and it was great. And some of the CPG companies, I think not only do they have it on their packaging, but they have, like, websites. I, I think Nestle has, like, a GLP-1 friendly website. Um, and it's just all of the products.

[00:16:56] Not every one of the products has GLP-1 friendly messaging or labeling on it, but [00:17:00] it's all just designed for people who, um, are on the medications and, like, here's the products that could help you. But you're right, like, maybe, maybe you don't wanna be thinking about the medication that you're on all the time.

[00:17:10] Like, it doesn't have to define you as a person, right? It's a really interesting thought.

[00:17:15] Suzy Davidkhanian: And I love how there was a time where we talked about shrinkflation as a way to manage margin, but now shrinkflation is as a, a, a cleaner way of helping folks think about portion control without it being in your face.

[00:17:26] Is there anything that you think businesses, specifically retailers, but also drugstores, uh, every type of retailer, is there anything that wasn't on their radar two years ago and as this is ramping up, and we didn't even get to the quote unquote black market of folks taking the drug, so it's probably even more people are losing weight than we expect it to be.

[00:17:45] Is there anything that wasn't on businesses' radars a couple years ago that you think should be front and center now?

[00:17:51] Rajiv Leventhal: I think maybe how much these medications cost, which, you know, isn't necessarily something that retailers are thinking about, you know, [00:18:00] top of mind. But, uh, one of the, one of the first questions we, we discussed was what's driving this latest surge?

[00:18:06] Well, the costs have come down some, uh, but interestingly, insurance isn't covering it for as many people. So, uh, the list prices for these drugs, like, two years ago in some cases were well over $1,000. Nobody is paying that any- I mean, few people were paying that two years ago, but nobody's paying that anymore.

[00:18:23] Pretty much everyone, whether your insurance covers it or not, you're in, like, the 50 to $300 range per month, which, you know, again, is, is ... That high end is expensive for some people, but you could argue it's the same. It's cheaper than a luxury gym membership, right? Mm-hmm. So anyway, so, so the fact that, um, I think the costs have come down could potentially reopen or reallocate some consumer spending in other areas.

[00:18:46] Suzy Davidkhanian: That, and also it's easier to ingest, right? I think we were talking about how it went from, um-

[00:18:52] Rajiv Leventhal: Injections to pills. Yes,

[00:18:53] Suzy Davidkhanian: thank you. Yeah. I was like- Yeah ... what's the English word here? Yes. Pill format- Yeah ... that's also much easier. So there will probably be [00:19:00] continued momentum of folks-

[00:19:01] Rajiv Leventhal: Yeah ...

[00:19:01] Suzy Davidkhanian: uh, on and off the drugs, changing their, their journeys.

[00:19:05] Rajiv Leventhal: Yeah. And one of the main pills, it, you have to, um, you have to wait 30 minutes after you have it before you eat or drink anything. So again, that's, like, another consideration for, uh, you know, how you might want to, uh, you know, market specific products to, uh, to consumers.

[00:19:20] Suzy Davidkhanian: Okay, so let's end with this. Finish this sentence for me: The retailers that will ride the wave rather than get caught in it are the ones that

[00:19:29] Rajiv?

[00:19:29] Rajiv Leventhal: The ones that recognize a GLP-1 user's needs, preferences, and purchasing behaviors will evolve over time, and it won't be a static customer segment.

[00:19:38] Rachel Wolff: Um, th- think holistically about what the GLP-1 consumer needs from, you know, education to product to fit to, you know, services.

[00:19:48] Suzy Davidkhanian: I think that's a great place to end.

[00:19:49] You really need to know who your customer is so that you can build the right sort of customer journey and the right products, the right marketing, the right loyalty ecosystem to get them to stay [00:20:00] with you. Thanks so much for joining us,

[00:20:02] Rajiv Leventhal: Rajiv. Yeah. I had a, I had a great time. Next time we come on and talk about GLP-1s, we might be at 25%- Can

[00:20:07] Suzy Davidkhanian: you imagine?

[00:20:07] Rajiv Leventhal: population usage.

[00:20:09] Suzy Davidkhanian: Thanks, Rachel.

[00:20:10] Rachel Wolff: Thank you. Had so much, we could have talked about

[00:20:12] Suzy Davidkhanian: forever. Totally. And thank you to our listeners and to our team that edits the podcast. Please leave a rating or review, and remember to subscribe. I'll see you for more Reimagining Retail next Wednesday. And on Friday, join Marcus for another episode of Behind the Numbers.