In 2018, CVS hit the news for squeezing mom-and-pop pharmacies – as its in-house pharmacy benefit manager slashed reimbursements for medications sold to patients on Medicaid for independent pharmacies, while offering much better rates to its own stores.
Of course, CVS Health is one of the largest pharmacy chains in the U.S., though the negative press has done little to hurt its status as a pharmacy powerhouse as it ranked seventh on the Fortune 500 last year.
Remove it from the headlines though, and independent pharmacies can learn a lot from CVS. Rite Aid, too, is an interesting case study in pharmacy marketing and how to grow your store.
So, what can you do as independent retail pharmacist to go toe-to-toe with these giants?
Superior customer service
No doubt, you’ve been in business long enough to know that customer service can make or break your business – especially in a pharmacy, where customers often deal with sensitive health issues.
However, it goes far beyond remembering a customer’s name or greeting them with a smile. Instead, it ties into your store’s offerings and choice.
CVS trumps many of its competitors as a retail pharmacy as it dispenses more prescriptions than any other drugstore chain in the world. But it doesn’t just sell: pharmacists are on hand for face-to-face consulting, while many stores have clinics where physicians and nurses treat minor health issues, perform screenings, or take part in vaccination services.
Rite Aid is taking it a step further by partnering with a telehealth company to offer virtual connections to clinicians in its in-store retail clinics. Customers can come in-store to visit express kiosks where they can be linked with a clinician.
While you may not have the budget for high-tech kiosks, the base principle here is obvious: to be as useful as possible to customers and to make healthcare accessible.
Your pharmacy can get ahead by investing in specialist pharmacists who can consult on chronic illnesses or fertility issues, or by introducing programs to help patients to stay on the right medications.
Another reasonably simple addition might be to introduce click/call and collect or access points where consumers can pick up or return packages. It’s all about ease for customers, who want a shopping experience that fits around their busy lives.
Marketing, marketing, marketing
As a business owner, the old adage ‘you have to spend money to make money’ is painfully true.
In 2016, Rite Aid took this to heart and installed beacons across its stores in the U.S.
Beacon technology is a novel way of providing extra information to your customers.
If a customer walks by a beacon, it connects to their phone’s Bluetooth and Rite Aid can send them a message.
In 2018, Rite Aid used a combination of beacons and marketing to roll out a campaign around flu vaccinations.
Again, while the tech powering the marketing activity isn’t necessarily accessible to all retailers, it showcases the value of being smart with your marketing.
Most pharmacies are doing all the obvious things: hosting events, running expanded services, keeping their website updated, and sharing on social media.
In order to compete, pharmacies need to be smarter about the data they collect. If you have an electronic point-of-sale system, you’ll have reams of data at your fingertips. Likewise, if you have a website that’s optimized for personalization, in-depth analysis, and user experience, you’ll be ahead of the curve.
However, it’s another pain point for independent pharmacies: you may not have the budget to invest in a website or a complex e-commerce platform.
But being online doesn’t necessarily mean adding e-commerce to your store – though it certainly helps.
The future of pharmacy is in mixing digital and community
At an Adobe Summit in Las Vegas, Dean Bowerman, Rite Aid’s vice president of digital marketing and commerce, looked at the pharmacy’s nine ‘pillars’ of e-commerce. Analytics, he said, was key in meeting customer needs.
“Getting accurate and complete product content is still one of the most challenging and time-consuming exercises for an online merchant,” he said. “Customer focus has to have the priority. […] Analytics provides all behavior data in one location and delivers insights to improve user experience.”
For independent pharmacies, complicated analytics and personalization may be out of reach – but there are entry points: building an email list and personalizing recommendations based on purchase data goes a long way, as does tracking your inventory data for forecasting.
One area where independent retailers have an advantage is in community: Rite Aid and CVS have thousands of stores and their staff can’t possibly get to know the locals as well as an independent retailer.
Local marketing – where retailers advertise to customers who are nearby – is a possible plus point for independent pharmacies. It’s a simple concept but it’s one that’s not outright facilitated by Google. For example, let’s say there’s a woman nearby called June.
June needs to buy homecare products for her grandmother. She takes out her phone and searches for ‘homecare products near me’. She might see a listing for Amazon, some ads, or some businesses within a certain radius that supply homecare products.
However, there might be a pharmacy a block away that stocks the exact product June is looking for, but she has no real way of seeing that in the search results.
Pointy is a retail tool that connects local searchers to stores that sell what they’re looking for.
Pointy connects to the store’s POS and puts its in-store products online alongside a live inventory so local people can see if the product they want is available. The customer can then see the store address and get directions to complete the sale.
Ultimately, if a customer is searching for a product near them, it’s a clear sign that they’re looking to buy – which is a powerful tool in an independent pharmacy’s battle against the CVSs and Rite Aids of the world.
Pair that with a great customer experience, useful expanded services, and smart pharmacy marketing, and you’ll have plenty to take away to implement into your own store.