Pharmacies across the country are gearing up to face another surge of demand for COVID-19 vaccines, presenting independent pharmacy owners with an important opportunity to reposition their business along more profitable lines.
Independent pharmacies were struggling long before COVID-19, and on the current trajectory, that struggle isn’t likely to end soon. Simply put, if independents insist on continuing to operate along traditional lines of business, they can only look forward to death by a thousand cuts.
There are ways for independents to leverage their unique assets to turn things around.
To do this, independents must first take a look at critical business trends in the space. Cash pay — through which consumers pay a flat cash fee for drugs or services — seems primed for growth thanks to Walmart, Amazon and GoodRx. Services that lower costs and maximize consumer convenience and accessibility appear to be increasing in popularity as well, as do services that keep care close to home, such as telehealth.
Given that cost and convenience are king, independent pharmacists must next ask themselves: “In what ways do we create value, and how can we create value in new ways that build on our strengths?”
There are a few short- and long-term ways for pharmacists to make that happen.
Most immediately, independents should look for new ways to bring customers into the store and get them to return. Independents could do that by specializing in a particular product or service line that has appeal in the local market, and by building on the current moment to become a center for testing and vaccines of all types.
Taking the idea a step further, independents could consider specializing in cash-pay business and competing in the same arena as larger retailers. Depending on the characteristics of the local market, it might even make sense for independents to drop insurance transactions entirely and build their marketing focus around the cash-pay concept.
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Alternatively, independents could also partner with those big competitors. Some have already partnered with Amazon to provide a bricks-and-mortar presence, in the process sharing in the economies of scale that Amazon offers.
An appropriately customized digital marketing program is a critical element that independents need to have. Mobile applications are more affordable than ever, and they can be used to enhance relationships with customers with refill reminders, online orders, advertising for targeted discounts and customer loyalty perks. When backed up with actionable segmentation of their customer base, this will also allow independents to tailor their digital and in-person interactions with customers, supporting consumer loyalty and the delivery of a broader service portfolio.
Looking to the future, the key to independents’ success will be leveraging their strategic location, their high visibility and their strong customer relationships. The “valued pharmacist” model positions the pharmacy as a provider of ambulatory care at a much lower cost than traditional providers, and efforts to diversify into clinical care delivery go hand in hand with efforts to win provider status in the context of managed care programs.
In sum, the current moment is more optimal than most for independents to pursue these shifts. Independents have played a highly visible and valuable role in helping to immunize communities and control COVID-19, and as a result, should seize this increased visibility to ensure they can do the same in the years to come.