Since its establishment in 1926, the Chain Drug Marketing Association (CDMA) has helped give its members an edge in a highly competitive retail marketplace. Initially founded solely to support the marketing and merchandising efforts of its members, the CDMA today helps them in all aspects of their retail operations, particularly when it comes to stocking their store shelves.
The Novi, Mich.-based association represents 144 buying headquarters of independent and regional pharmacy chains, along with grocery stores and regional drug wholesalers, collectively totaling over 6,000 stores nationally and internationally. Although the CDMA was founded as a trade association, it has evolved to take on distribution duties for the Quality Choice private label of brand-name equivalent health and beauty care products and the HyTop brand for general merchandise and consumables.
This evolution came about through the association’s doing what it has done best for 85 years: listening to the needs of members and helping them make connections. It celebrated its 85th anniversary during its 85th annual trade expo in Orlando in January.
“We think one of the reasons we’re successful is because we stay focused on what the needs of our small to mid-size retail members are,” Vice President Judy Aspinall says. “Fifteen years ago, our members found they had a mutual need for a private label, so they came to us and we helped them fill that need.”
Quality Choice includes 1,000 SKUs distributed to 100 of its members, who collectively buy from manufacturers in a co-op arrangement. Products are kept in the CDMA’s warehouse in Novi and shipped out to order. The Association also handles packaging and promotion, including sales flyers and retail displays.
“For most of our members, these are probably the most successful thing they sell,” President Jim Devine says. “We’ve had many retailers literally tell us that if not for Quality Choice, they wouldn’t be in business – that’s how important it is to them.”
Sales of Quality Choice products have remained high the last few years despite the recession, mainly because of their value and price point compared to name brands. “Sales are up 20 percent this year over last, which itself was a record year,” Devine adds.
Quality Choice is one of several ways the CDMA offers to help members fill their shelves. The association nine years ago established a partnership with the True Value Company that offers general merchandise and name-brand products in categories including automotive, electronics, hardware, kitchen gadgets, light bulbs, personal care, small appliances and seasonal items.
True Value offers more than 67,000 items serving more than 6,500 drug and hardware retailers. CDMA members can order items from True Value daily. “This is a strong alliance that has proven to be very beneficial to our members,” Aspinall says.
CDMA members’ general merchandise needs are also met through the Everyday Essentials program, which provides 4,000 additional items including school supplies, cleaning supplies and cosmetics.
Products can also be sourced from the CDMA’s 150 Associate Member supplier partners, who offer services, displays and products including candy, cosmetics, hair care and durable medical equipment. “A lot of regional chains and independent pharmacies don’t have the resources they used to have because their distributors have reduced their SKUs or gone out of business, so they’re really looking for resources for their front-end,” Aspinall says. “We’ve been able to reach out and fulfill those needs.”
CDMA has developed their own custom software suite to manage inventory and distribution. Orders are typically sent out within seven days, but can be expedited if needed.
“Because we’re so close to our members, if they call us today, we can get product out to them tomorrow if it’s something they really need,” Devine says.
The CDMA recently purchased the Great Plains accounting system, and is looking to upgrade its CRM systems to consolidate and integrate all of its systems. “I think anybody who doesn’t try to improve or increase their technology will fall behind,” Devine says.
Devine, Aspinall and other association staff keep in regular contact with their member base through personal visits, phone calls, physical sample and informational mailings and electronic newsletters.
“We let them know what’s going on in the association and the industry and react to important developments very quickly,” Devine says.
CDMA leadership also believes in being open and accessible to staff. Devine describes his leadership approach as “management by walking around.”
“I don’t just sit in the office here, I find out what’s happening in the association by getting up and moving around and talking to people,” he adds.