Learning from Chain Pharmacies


Independent pharmacies can learn from the chains — and then focus on differentiation by emphasizing what makes independents unique and special

With a little research, it is easy to see where the top retail pharmacy chains are focused. In general, the major areas of focus revolve around:

  • Becoming community health providers. This could include: ACO strategies for working with hospitals and health systems to reduce readmissions; expansion of in-store clinics; programs focused on chronic diseases, especially diabetes and cardiovascular diseases, as well as conditions such as asthma, COPD (chronic obstructive pulmonary disease), osteoporosis, and depression; vaccines and immunizations; and anything targeted at improving medication adherence.
  • Improving the customer experience. In order to further enhance the overall customer experience, many retailers are redesigning their stores, providing new types of employee training and launching new types of experience-focused initiatives.
  • Investing in technology. This includes customer-focused technologies, such as the Web and especially mobile, as well as various operational technologies to improve workflow, efficiency and promotions.

Other retailers, small and large, can learn from these strategies and decide whether or not to apply them to their businesses.

What Can Independents Do?

Independents can learn from the chains and decide which strategies to apply to their business, while simultaneously emphasizing those unique attributes that distinguish independently owned pharmacies.

Strategy #1: Decide Where to Follow the Chains’ Lead

The major chains have resources and capabilities to invest in extensive market research, to understand consumer and industry trends, to engage in long-term strategic planning, and to spend heavily on new marketing campaigns that promote major initiatives. Independents may not have the same resources, but there is no reason they can’t learn from the chains’ investments and research.

Trying to replicate a chain’s strategy may not be the best path forward for independents. Instead, independents can follow the overall direction in which chains are headed and customize a strategy that works for their patients and their communities. Important themes from chain activities that independents can learn from and emulate include:

  • Focusing on health and wellness. The chains are launching a variety of initiatives to position themselves not just as fillers of prescriptions but as an essential part of the healthcare system. They are also investing in ways to demonstrate how their activities are improving patient outcomes. The same logic applies for independent pharmacies, which need to evolve to stay relevant.
  • Prioritizing innovation. The chains are clear that they are attempting to reinvent the business of pharmacy. They are developing new service offerings and trying new things, like different formats and footprints. They are also using the front end to reshape the customer experience to maximize customer satisfaction and ultimately increase front-end purchases. This general mindset is applicable for independents as well.
  • Utilizing technology. While independents lack the scale and budgets of chains, they can still take advantage of online and mobile technologies and social media to market themselves and build customer loyalty. Independents can also employ pharmacy technology and automation to help improve efficiency.

It’s Never Too Late

The good news is that even though the chains are ahead in some areas, independents can decide where to focus in order to level the playing field.

Strategy #2: Emphasize Areas of Uniqueness

The key to success isn’t playing catch up; it’s being different and better. Knowing where the chains are headed gives independent pharmacies plenty of opportunities to showcase areas of uniqueness.

  • Leverage relationships to create personalized service. The strength of independents has long been having trusted, personal relationships and delivering unparalleled customer service. Independents can use this history of service to offer new types of health and wellness services — where relationships and delivery of care matter. This could be counseling about medications, MTM programs, or initiatives that target specific segments of patients with chronic diseases. While chains are starting to focus on such clinical services, they fit perfectly in independents’ sweet spot.
  • Use technology to enhance patient care. Going “high tech” can easily complement “high touch” service, such as a contemporary website as an online extension of a pharmacy’s personality, text message reminders, or a mobile app for refills. Independents may not have the resources to develop technology from scratch, but many vendors offer easy-to-implement and easy-to-manage solutions that do not require huge upfront investments.
    • Learn how Jernegan’s Health Mart Pharmacy in New London, Wisconsin is using technology to take care of their patients.
  • Leverage local professional relationships. Independents are embedded in local communities with deep local knowledge and relationships. Build strong relationships with local physicians and prescribers to demonstrate your shared commitment to the health of your local community.
  • Create focused, niche offerings. Chains generally provide consistent offerings across all geographies. In contrast, independents have the ability to see and pursue unique opportunities to respond to local community needs. This might include focusing on a particular segment of customers; offering a unique type of service, such as compounding or long-term care pharmacy services; providing delivery; or discharge planning. Independents have greater flexibility to quickly adapt their offerings as opportunities present themselves.
    • Search the tag “Revenue” on this site for additional articles and ideas.
  • Capitalize on speed. While chains may have significant marketing clout to do big things in big ways, being big means it can take time to make and implement decisions. Independents don’t have the same layers of management or bureaucratic processes and can therefore make decisions and act quickly, which is a distinct advantage. Independents can quickly develop new ideas, experiment, iterate and make changes.
    • Learn how Leanna Donner, an entrepreneurial young pharmacist, launches new services to build on the success of her parents’ pharmacy.

By being aware of what the chains are focused on — like health, wellness, customer experience, and use of technology — independents can decide how best to change and evolve in order to compete.

Note: The information provided here is for reference use only and does not constitute the rendering of legal or other professional advice by McKesson. Readers should consult appropriate professionals for advice and assistance prior to making important decisions regarding their business. McKesson is not advocating any particular program or approach herein. McKesson is not responsible for, nor will it bear any liability for the content provided herein.