Health and Pharmacy in the Digital Economy

There’s a sense of excitement and trepidation surrounding instore and online commerce in Australia.

Amazon’s arrival is akin to the landing of a foreign colonial power — are they here for mutual benefit or to plunder? Of course, only time will tell.

Across the world, consumers have been delighted by Amazon, who, in the pursuit of service and revenue, have kept customers central to their strategy.

Simply put, Amazon keeps an ‘endless aisle’, and provides cheap and fast delivery, all at low costs for goods. They then add on other services like Amazon Prime to engender brand loyalty.

For pharmacy, this will provide challenges and opportunities in our retail space — but we aren’t pure retailers. We’re health carers primarily.

So, what has worked with health care in the digital economy? What can we learn from Amazon? How can we drive customers to our services, our people and our offer, considering changes in the economy?
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Lessons for Amazon

Ever heard of ‘Cadabra’ or ‘Relentless’? Probably not.

They were the original names for Amazon from Jeff Bezos, Amazon’s CEO, Founder and America’s second-richest man.

When Amazon launched in 1996, Seattle, WA, USA, they sold books. Bezos was passionate about the potential of e-commerce, saw books as a simple category to start with, then drove his company and employees hard to achieve his goals.

He saw the company as a full-service, e-commerce supplier — a tech company at heart, not a retailer — and believed in a long-term, full-range vision.

Within two years, the company was turning over US$610 million and by 1999, Bezos was Time Magazine’s Person of the Year.

What can we learn in Australian Pharmacy? Well, re-read the above statement — ‘Bezos saw Amazon as a tech company at heart, not a retailer’.

Pharmacies are health care destinations at heart — not pure retailers.

The lesson is stick to your core strength, ensure your customers know and love the experience and do it unforgettably well.
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Health and E-commerce Success

Would you like some good news? Health e-commerce has been a tough nut to crack globally.

It’s relatively easy to sell a toaster or dress online — people can wait three days for it to arrive.

When it comes to health and beauty, there are some factors that make it less attractive for consumers to purchase online. I

f we look at the top 20 e-commerce sites in Australia, we see brands like ‘The Iconic’, ‘Kogan’, ‘JB-HiFi’ and ‘Catch of the day’.

Ultimately, if it is stored at an ambient temperature, has no or low regulatory restrictions and someone can wait a few days for delivery, there’s a sweet spot. In short, if it’s simple, it’ll fly.

Where health and beauty differ are the elements of human interaction and emotive purchasing, which are removed in the online experience.

In short, items and services where touch, feel, smell, taste and care are integral to their impact, do not currently lend to e-commerce success.

The challenge for pharmacies will be encountered on repeat purchases of these items.

After the initial positive, emotional interaction and purchase in store, consumers have trust in the product and often make price their purchase determinant.

This is where Pharmacies need to ensure they are capturing customer details, re-engaging with use of local area digital marketing (LADM) and overcoming the drawbacks of online with a compelling instore offer.

1) Make the initial instore experience unforgettable.
2) Capture their contact details.
3) Send them relevant offers to make repeat purchases from you the better option.
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Pharmacy and E-commerce

There are two key discussion points with Australian pharmacy and e-commerce:

1) Prescriptions
2) Consumer engagement.

Due to the regulatory environment, subsidised medicines through the PBS and paper prescriptions, there are several complexities which detract from the e-commerce playbook (if it’s simple — it’ll fly).

Alongside this, is the nature of many medicines — they’re needed here and now, require human interaction and are an emotive purchase.

Customers want to feel better, and the most effective way is through direct human contact.

Some products, such as children’s antibiotics, require immediate preparation. These are just impossible to be purchased online.

We see large brands dominating the e-commerce and digital landscape of Australian pharmacy.

No doubt, with size comes resources and the power to stake out a piece of digital real estate to drive consumers in store.

However, it’s not out of reach of the average, independent pharmacy as well. You need the right infrastructure and strategy.

To me, the average community pharmacy must have:

• a website (could be your brand’s website) which is both informative and lead generating, e.g. your customers can contact you via the site
• useful, relevant and fresh content
• a consumer email list with regular emails from an eDM platform (e.g. MailChimp)
• an active Facebook strategy
• people who can run the engagement and narrative, in store, every day.

Engagement is the key to success with digital — not just throwing up what you want customers to buy, but a genuine, authentic story about your pharmacy, its people, its services, range and opportunities to make their health better and lives more convenient.

This is in the reach of every community pharmacy — and the target market is within the postcodes of the scripts you see every day.

Herein lies the key to success against Amazon or any other large discount provider of products online.

Your customers can source their products from you faster than anyone else if you get your pricing right (note: not cheap, right) with a true value proposition and engage with them in a meaningful, cohesive narrative. The results will follow.

Pharmacy has every opportunity to use Amazon as part of their e-commerce sales strategy through many of the services Amazon offers retailers. This will fail, along with any other e-commerce tool that is not fed time, resources, strategy and consumer engagement.

If Amazon’s ‘knitting’ is a killer tech platform, our knitting is genuine care for our local customers. Both can exist and thrive, but stick to your knitting.

If you dig a little deeper, Amazon’s main strategy is to compete and partner with industries and businesses. The best example is that Netflix is hosted on Amazon Web Services … and Amazon runs a similar entertainment service called Amazon Prime.

With pharmacy’s core services of prescriptions, professional services and health retailing, we are well placed to grow if we use the technologies currently available in a digital strategy as part of the pharmacy’s business plan.

Pharmacies wanting help in this area should contact info@pharmacy.com.au. There is a worthwhile digital journey which requires advice and realistic knowledge of health and Australian pharmacy — and the Guild is here to help.

We will watch the landscape continue to change, but one constant will be maintained — genuine connection with your local community. It’s been pharmacy’s strength until now and it must continue in the digital world.

Aaron D’Souza B.Pharm MACP, General Manager, pharmacy.com.au