Multi-channel Pharmacy Driving Front End Pharmacy and OTC Healthcare
That pharmacy profits are under pressure is an increasing fact of life. The underlying causes present major challenges to both suppliers and retailers. These include competition from mail order and online pharmacies; the commoditisation of generics and punitive price regulation as well as adapting to an increasingly globalised market place. Pharmacy owners will need to form competitive retail strategies to secure loyalty among increasingly fickle multi-channel shoppers, work closely with suppliers to expand into profitable OTC healthcare and front end categories free from price regulation. They should also focus on integrating aspects of digital pharmacy into their portfolio of competitive advantages to provide multi-channel options for their customers.
“Multi-channel pharmacy strategies can in part help retailers to exploit front end opportunities through reaching consumers seeking fragrances, skincare and cosmetics as well as those looking for discounts on high value non-prescription OTC healthcare products or the anonymity of the Internet to purchase embarrassing OTC products”, says James Dudley the author of Mail Order and Internet Pharmacy in Europe – Entering the Digital Battleground from James Dudley Management published at the beginning of this year - www.James-dudley.co.uk
‘Pure play’ Internet pharmacies make discounting, ordering convenience and large ranges of available products their strengths. However, these strengths are relatively fragile in markets where, as well as integrating e-commerce into their multi-channel strategies, retail chains and buying groups can easily match discounts offered by the digital players. Furthermore, multi-channel pharmacy retailers can provide in store counselling and advice as well giving customers shopping online the options of home delivery or ‘pick-up- in-store’.
The response of retail pharmacy chains and other organised retail groupings to the challenges posed by ‘pure play’ mail order and Internet pharmacies is a factor influencing the development of the digital sector. Indeed, the slowdown in ‘pure play’ mail order pharmacies in the USA, Australia and United Kingdom is due at least in part to multi-channel strategies being adopted by retail drugstore and pharmacy chains.
By integrating digital elements into its traditional ‘bricks and mortar’ offer a pharmacy chain it not only competes with the strengths of its ‘pure pay’ rivals, it can attack their weaknesses. What is more, the combination of traditional pharmacy and online services reaches out to consumers who use both traditional ‘bricks and mortar’ outlets and online services - the so called multi-channel shopper segments. Importantly, multi-channel retailers see ‘order online- pick-up-in-store’ as a competitive advantage over their ‘pure play’ rivals.
In the United Kingdom a fifth of British consumers buying from online pharmacies order fragrances, skincare and cosmetics, while one in ten buy non-prescription OTC medicines and other health products. 64% of turnover Boots the Chemist (Walgreen Boots Alliance) in the United Kingdom is from non-pharmacy merchandise and represents around three quarters of the retailer’s profits. Boots runs the largest online pharmacy business in its home market with one in five online pharmacy shoppers purchasing from Boots.com.
Pharmacies could well find that e-commerce is a useful way of reaching women according to James Dudley. More women than men shop online pharmacies in Europe and this is reflected in the products they buy. For example Spanish and British online pharmacy shoppers are twice as likely to purchase cosmetics or skincare rather than non-prescription medicines. In Belgium the leading online pharmacy claims 70% of its shoppers are female. In Germany the gender gap for pharmacy shoppers is narrower with 33% of women and 27% of men purchasing online.
Consumers who either shop exclusively or mix online shopping with traditional pharmacies are principally attracted by discounts. For example 46% of British online pharmacy shoppers gave cheaper prices as a main reason to buy online, as did 51% in Germany, 59% in Austria and 51% in Spain.
Convenience of ordering at home and wide ranges of available products from online pharmacies are among the other reasons given that stand out.
Yet while, pharmacy shoppers are principally attracted to mail order and Internet pharmacies by discounts, convenience of ordering at home and wide ranges of available products from online pharmacies are among the other reasons given that stand out.
Ordering online and ‘picking up in store’ is becoming a key growth driver in digital retailing across Europe’s main healthcare markets and is much favoured by Spanish, Polish and British pharmacy shoppers. Indeed, Boots, Britain’s biggest pharmacy chain and online pharmacy market leader claims that around 60% of its online business is ‘pick-up- in-store’.
Information for Editors
James Dudley is a well known consultant, speaker and author of studies on European Consumer Healthcare.
Mail Order and Internet Pharmacy in Europe - the 2015 edition – Entering the Digital Battle Ground is the third edition a major study covering 17 European States plus a chapter describing the progress of online pharmacy in the USA – markets studied include Austria, Belgium, Czech Republic, Denmark, Finland, France, Germany, Hungary, Italy, the Netherlands, Norway, Poland, Slovak Republic, Spain, Sweden, Switzerland and the United Kingdom
Tags Online pharmacy, channels of distribution, healthcare availability, modern pharmacies, European mail order pharmacy, OTC Distribution, channels, consumer purchases from Internet pharmacies
Fahren OTC-Arzneimittel und Front-End-Apotheke - ist Multi-Channel-Apotheke die Lösung?
Online-Apotheke, Vertriebskanäle, Gesundheitswesen Verfügbarkeit, moderne Apotheken, europäischen Versandapotheke, OTC-Distribution, Kanäle, Verbraucherkäufe von Internet-Apotheken