Big discounters have arrived in the New Zealand pharmacy market. It’s been a long time coming, but now that they’re setting up shop next door, how prepared are you to compete?
We speak with Managing Director of First Retail Group Ltd, Chris Wilkinson, about the importance of an online strategy to help prepare against discounters.
Chris, we’ve seen discounters come into the market in other verticals. What affect can they have on established businesses?
Discounters are disruptors in that they shift consumer expectations, making it more challenging for established businesses to compete. Retailers must look to other ways of demonstrating their overall value proposition and widen their audience through new channels such as e-commerce.
Why is an online presence important when competing with discounters?
Price is important, however increasingly we’re recognising that convenience and empowerment are becoming key factors in driving retail performance. We’ve seen excellent examples where strong online visibility has heightened priority in consumers’ consideration set – eclipsing price-based competitors’ web presence and offers.
Quality of service is usually thought of as being an “in-store service”, how can this be applied to online?
Retailers need to achieve a rich, immersive user experience online. This starts with demonstrating what differentiates your business, heart of community positioning and heart-felt representation of customer relationships – such as comments or reviews, that provide added assurance.
What advice do you have for pharmacies just entering the online sphere?
It’s vital to consider an overall digital strategy in how you’ll integrate and leverage social media, electronic direct mail and other channels to reach and engage customers. Take the time to plan this, then task your team to ensure all these elements are working together to maximise the potential from your enlarged online audience.
If a pharmacy doesn’t feel ready for e-commerce, what benefit can they gain from just having their products online?
Online presence is fundamental to retail success, but the majority of consumers now expect to be able to purchase seamlessly online too. Shoppers will leave underwhelmed if they have taken the time to visit and understand your range, then be let down at the last-mile if purchasing is beyond a click away.
Life Pharmacy Kilbirnie owner Androulla Kotrotsos said that “the increase in sales that we’ve seen has been fantastic” since having an e-commerce enabled website.
A solution for pharmacies not ready for the full e-commerce experience may be ‘Click and Collect’. By 2020, the UK’s Click and Collect market is expected to grow by 78% to NZ$14.8 billion. 42% of retailers offer the service in Australia, and in New Zealand we see the majority of major retailers offering Click and Collect as a free service. This allows customers to purchase online, with the benefit of bringing them in store also.
Ways pharmacies can compete with big discounters include:
- Demonstrate value
- Connect with a wider audience
- Build customer relationships
- Have an online presence
- Build strategy and plan for online
- Be e-commerce enabled
This article produced by Storbie, originally featured in the May ’18 edition of Contact, the magazine for members of the Pharmacy Guild of New Zealand and has been re-published here with permission.