My (healthy) obsession with pharmacy
We recently met with a pharmacy shopfitter specialist in Sydney who spent two hours telling us the retail side of the pharmacy industry in Australia was: a political beast, and that there was no money to be made in pharmacy store design and fit out; that the small to medium size retail pharmacy model was dying against the rise of Australia-wide chains; that small-scale pharmacists were cutting costs wherever possible to try to compete, because customers were only interested in paying as little as possible for a pharmaceutical product.
Traditionally, I’m pretty agreeable, so I smiled and nodded and, on the drive back to the city, I couldn’t help but feel that I’ve been hearing this sentiment all around Sydney and Melbourne a lot, and that it didn’t add up to me.
Full disclaimer though, I love pharmacies. On a personal level, on a cellular level. In the words of Marian Keyes; “I adore chemists, as they straddle two areas I’m passionate about: beauty and bad health.” Wherever I go, I always want to stop in at the pharmacy to see what they have. To make a long story short, in my experience, Dubai and Thailand have the best over-the-counter range (antibiotics and the pill, next to the shampoo), and France has the best range of beauty products, hands down.
But back to Australia and the perception that the retail pharmacy industry is flagging…
With an ageing population, we know that medical supplies/pharmaceuticals is a growth industry, probably even recession-proof. So a decline in consumer-demand is off the table as a viable reason as to why ‘there is no money in pharmacies’. That, and the fact that Australians spend approximately $180b per year on healthcare, tells me there is still money in medical.
I’ve heard firsthand designers and shopfitters pointing fingers toward behemoth retailers like Chemist Warehouse, and their market domination of the category. I don’t know if their products are actually cheaper, but I do know that when I’m in their stores, it feels like they should be cheaper, similar to the JB Hifi experience.
The exposed metal racking posing as shelving, and the painted concrete floor, which both chains feature, would have me believe the costs saved on fit-outs are being directly passed on to me.
Between these huge corporations running vast retail chains, small one-off stores trying to keep up, and consumers who can cross-check prices on the phone at a moment’s notice, somewhere along the line, it’s been proffered up that price is the consumer’s tipping point when it comes to where they shop.
But is this true? Do shopper’s only ever want the lowest price? So then by default, does everything else becomes a distant second?
In short, I don’t think so. If it’s only about price, then the biggest would have won by now, because their bulk-buying power will always be able to reduce the price. But if I look at any other retail industry, price is only one of the levers that influences a consumer’s decision.
Some pharmacists, to differentiate and reposition themselves in the consumer’s minds, have shifted their offering from price to service. There is a side swell of pharmacies that are marketing themselves as a ‘community health hub’, offering diet and nutrition advice, flu jabs and home delivery services.
Of course, I don’t have all the answers, but I think making a move away from race-to-the-bottom pricing makes total sense, though I’m not really sure how it will take, it’s a time-will-tell situation. What I am curious about, is whether the gaping hole left by bargain basement retailers and community hubs, will be filled by what I think is obviously missing. A beautifully designed space where people want to be in, and by default want to care for their bodies in.