A couple of weeks ago there was commentary about Chemist Warehouse (CWH) on the popular marketing TV show Gruen. After reading about it on AJP and Pharmacy News I felt it was necessary to watch the segment.
The host Wil Anderson and other guest speakers discuss in detail about CWH’s strategic marketing. The chemist chain spends $100 million a year to look cheap and cleverly gives the impression that all their merchandise is a bargain. They describe CWH as a marketing machine and that it’s more a media empire than chemist.
Lastly, they spoke about whether other brands and community pharmacies could compete with CWH. They stated that although expertise cannot beat price there is other strategies community pharmacies can focus on. These included niching and value add services.
CWH has been making strides in the Australian pharmacy industry for some time now and unfortunately, they aren’t going anywhere. In the future there will be other heavyweights who might enter the market and again, community pharmacy will have to adapt.
This doesn’t have to be all doom and gloom. We know it’s easy to wave the white flag and admit defeat. However, at Peak Strategies we believe that there are ways to run a profitable pharmacy even when big box discounters are present in the market.
Rather than focusing on just price and worrying about how you cannot beat CWH prices, look at what your pharmacy offers that CWH doesn’t. One mistake we see is pharmacies trying to be everything to anyone. Why spend your marketing budget on appeasing people who will never buy from your pharmacy? Don’t be afraid to hone onto a target audience and market accordingly.
John highlighted in a recent blog three questions you should be asking about your pharmacy: -
What is your pharmacy’s niche offerings?
What can your pharmacy offer that others can’t?
How do you personalise your offering?
For example, CWH design their pharmacies to look like ‘organised chaos’ and the layout is set up like a big warehouse sale. Their niche is driven by price and being “Australia’s Cheapest Chemist.” They do this niche well and it’s hard to compete with. However, the pharmacy industry isn’t based purely on retail health products.
Below are some suggestions to consider for your pharmacy’s marketing plan:
Marketing as “Pharmacists”
Pharmacists are well trusted health professionals within the local community. One of the guest speakers on Gruen stated that other pharmacies rather than marketing themselves as “experts”, that they should market themselves as Pharmacists. Pharmacists are a well-respected profession within Australia. So, there is an opportunity to market the value pharmacy adds to the community. Pharmacists are a necessary cog of the health industry, therefore embrace this role and use it to drive more traffic into your business.
CWH marketing is a national campaign and of course, with a marketing budget of $100 million they manage to reach a mass audience. If you are associated with a brand (TWC, Amcal, Priceline etc) then let head office worry about your national marketing. As pharmacy owners you can market more locally and engage with your customers.
There are some pharmacies that are doing this very well. They position themselves as the health destination for customers. Furthermore, they form partnerships with allied health professionals in the area, connect with other local businesses and host relevant health events. These pharmacies do not rely on discounted retail goods and price; their focus is on connecting with the community.
Personalised services such as home delivery is also another great way to connect with your customers and community. Personalised services are also something that you can offer which a big box discounter wouldn’t. Allow yourself to connect on a deeper level with your customers. Building a relationship with your customers rather than just transactions is very powerful.
To the public, pharmacies can often be perceived as the “same”. People cannot see the different values and service that one pharmacy provides. This isn’t necessary a bad thing as they trust what a pharmacy offers. However, there is the opportunity to make your pharmacy stand out from others and that is by niching.
There is a wealth of different health related services that a pharmacy offers. That can range from baby health to sleep apnoea to diabetes etc. Look at your POS reports and see what is a common health issue people visited your pharmacy for. Run customer surveys and speak with your team to see if there is an opportunity to focus on a specific service.
For example, your pharmacy might be in an area of new mothers. So, you could decide to turn your pharmacy into a baby health destination. This could include workshops, ordering specific retail stock related to babies, hire a baby nurse, share and provide content about the topic. All your marketing strategies would be directed at new or expecting mothers.
Niching also enables you to broaden the range of potential customers from outside your immediate suburb. If you’re well known for a specialisation, customers can and will visit from a wider area to use your services. There are several examples of pharmacies doing this successfully here in WA.
For those who watched that Gruen episode and immediately started worrying, we hope this article has provided you with a fresh perspective.
Just because CWH is dominating the market, it doesn’t mean there isn’t room for your pharmacy. Think of your strengths as a business and how you can showcase this to your customers. Remember, customer numbers should be about quality and not quantity!
Did you know that at Peak Strategies we offer marketing consulting? Contact us on firstname.lastname@example.org for more information.