How Drugstores Can Reinvent Themselves Amid Industry Challenges

• According to reports, U.S. drugstores have faced declines due to developing e-commerce, the encroachment of big-box retailers, and the pharmacist deficit.
• Providing services like wellness clinics, telehealth, and diversification in retail offerings is the only surviving alternative for the drugstores.
• Reinventing the whole model of drugstore operation will give a bright future for drugstores, especially toward providing convenience and technology to customer needs.

Drugstores have almost disappeared during the past 10 years from America, and interventions have revealed, about 30%, of having lost their presence from the retail topography during this phase. All these changes have come along due to increasing eCommerce, changing consumer behaviours, smaller profit margins, and tough challenges from big-box retailers and online pharmacies. Continuing changes in the market have made it increasingly problematic for drugstores to monitor their traditional place in the consumer shopping journey.

Understand the Dwindling Factors

Before, the traditional model of the pharmacy could have thrived as a stopover for medicines and everyday health items. And it was very accessible for the patrons. But this pattern just tailors to the understanding that the winds have blown differently for the market. According to retail experts, drugstores now need to diversify their services and adopt innovative, technological ways to stay in tune with what consumers want.

According to the U.S. Bureau of Labor Statistics, there will be approximately 13,400 job openings for pharmacists every year over the next decade. A major obstacle presently facing the sector is a continuously short supply of pharmacists. The number of pharmacy school graduates has decreased over the years, however, hence creating a massive gap in workforce availability. The shortage has caused burnout for many pharmacists which affects the overall service quality in brick-and-mortar drugstores.

Changing consumer expectations, at once, favour pharmacies for their convenience, affordability and competitive prices. Big-box retailers opening in-house pharmacies and offering online services are leading the charge, while traditional drugstores struggle. Many drugstores are now shutting down in low-income or high-crime areas due to concerns about profitability and customer safety. This reduces the availability of the disadvantaged parts of society to get essential healthcare services and damages the image of the industry.

Diversity and Innovate or Face the Future

Today, experts predict that drugstores will have to play a role more than just a pick-up point for prescription medicines. At best, they will add central pharmacy services and help strengthen the bond with the patron-client base in establishing another area for growth.

Enlarging the worlds of wellbeing services such as clinics, vaccination points and telehealth points could cover the considerations for reinventing the therapy experience. Integrating the use of modern technology-based applications in prescription keeping, home deliveries and virtual consultations would be quite a convenience for today’s health-centric consumers.

According to Zachary Robichaud, an instructor at the Ted Rogers School of Management, pharmacy chains are to expand from only filling prescriptions to carrying shelves of products from the wellness, beauty, and lifestyle categories. This is because they are well-placed to meet the needs of consumers who want an all-in-one shopping experience as opposed to consumers who have to go to Walmart or Target.

Adjusting to Changing Trends of Consumers

As explained by Sudip Mazumder of Publicis Sapient, vanishing brick-and-mortar drugstores can be blamed largely on eCommerce and the changing preferences of consumers. There is increasing demand for online pharmacies due to their ease of use, all-day service, and generally lower prices, particularly for generic medicines. This is even more observed now that an ageing population prefers mail-order delivery services, thus minimizing their visits to physical drugstores.

Soaring expenses, coupled with eroding refunds from the cost of a prescription, only add further burdens to the traditional pharmacy’s shoulder. Many chains have begun shutting down poorly performing stores and transferring their prescription files to more successful locations. At this same juncture, superstores and grocery chains are developing their pharmacy departments with competitive pricing and locations that are easily accessed.

In terms of relevancy, drugstores have to reinvent themselves to better customer experience. That includes personalized services like consultations, loyalty programs, and in-store experience improvement. The expansion into beauty and wellness products, in addition to services like vaccinations and telehealth consultations, will pull in another set of customers.

It will also be advantageous to enter into strategic alliances with healthcare providers by offering their patients convenient prescription refill and delivery services. Investing in e-commerce platforms and developing mobile apps for users will help compete with online pharmacies and fulfil consumer expectations.

Redesign the Model: It is Inevitable.

To survive in today’s market competition, all pharmacies have to change direction and diversify their offerings. According to Greg Zakowicz, senior eCommerce expert, it is increasingly impossible to describe the model as a pharmacy: it does not differ significantly from other selling outlets, such as grocery stores, online pharmacies, or convenience stores. Most imported products found in conventional pharmacies, such as cosmetics and nonprescription medications, are now available in all kinds of distribution channels, allowing consumers to purchase them right at their doorsteps.

Supermarkets have extended their reach into the pharmacy industry thus providing convenience to consumers by making it easy for them to purchase food and household items from one place. Mail-order prescription services have further contributed to reduced traffic flows to brick-and-mortar pharmacies thereby threatening the business viability of such establishments.

In an attempt to salvage the company’s dying presence, pharmacies will have to reduce their geographic footprint in the suburbs as part of their strategic effort to focus on major metropolitan areas. This will allow the establishment to function as a convenience centre for a much more concentrated population. There is space for drug chains to spread their wings by having the ageing population as a target market, but this pivot remains hazy as to how it will be executed.