Publication Date 01/04/2014         Volume. 6 No. 3   
Information to Pharmacists

Editorial

From the desk of the editor

Business is tight!
Cash flow has evaporated!
The PGA calls for unity while simultaneously dismembering the business of consultant pharmacists.
The federal government continues to strip massive funds from the PBS to the extent that it is gasping for air.
Oh, and I forgot, the Revive Clinic thinks that pharmacists cannot vaccinate patients in community pharmacies ( It is actually a warehouse pharmacy group trying to destabilise the market here to push fellow-pharmacists off balance by supporting the Revive group).
Even wage-earning pharmacists have discovered that they have not had a rise in their pay over the past five years

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Good news for community pharmacy from the Minister of Agriculture

Neil Retallick

articles by this author...

Neil Retallick is a former General Manager, Merchandising, for National Pharmacies, the successful community pharmacy model owned by the Friendly Societies. Neil holds a Graduate Diploma of Marketing from Monash University, is a CPM and a graduate of the AICD.He began his career with Myer Stores Ltd and worked for FMCG companies including TIA (Sheridan) and Pacific Dunlop. Prior to these roles Neil worked for Cadbury Schweppes Drinks Division - Grocery, and Trimex Pty Ltd in Victoria in State management roles.
He is currently Chief Executive Officer at the  Combined Dispensaries in Sydney and is a Member of the Advisory Board at Ehrenberg-Bass Institute for Marketing Science

Joe Ludwig, the Minister of Agriculture, recently released Australian Food Statistics 2010-11.
It provides a message of hope for community pharmacies.
This singular agrarian message of opportunity is in stark contrast to the constant proselytising in most media how technology in the form of the internet is going to ring the death knell (or beep) for local pharmacies.

Those espousing the great value of the web usually talk up the convenience and the value. The web is everywhere and is becoming more available as there exist more ways in which to access it. The smartphone is usually invoked at this point in the discussion. The web and everything on it is wherever you are. And the low prices are terrific value. No more traipsing from shop to shop to get the best deal. The best deal comes to you. This is what Derek Thompson at The Atlantic refers to as reducing the ‘friction’ of traditional shopping. Convenience, value... and choice. The choice is endless on the web. There are no bricks and mortar walls to confine the product selection. Websites are much, much cheaper to build than stores and they literally do have rubber walls. Just add another page.

It is for these reasons, argue the techno-savvy, that traditional retail formats are at risk. In Australia, retail sales via the internet have reached a “massive” 10% of total sales according to some. Well, according to the document released by the Federal Agriculture Minister Joe Ludwig during April, sales of fresh food through ‘alternative and farmers’ markets’ in Australia last year reached 7% of total fresh food sales.

Farmers’ markets are a more recent invention than the internet, at least in their current form. The first of these markets emerged in Victoria in 1999. Since then, more than 150 more have opened across the country with numbers doubling between 2004 and 2011. This is a phenomenal growth by any, even a digital, measure. 69% of all markets surveyed reported increasing numbers of stall-holders, so the growth does not look like abating. If the web is winning with convenience, value and choice then what is the secret to success of these retailers?

A farmers’ market is generally a collection of stands, stalls, caravans, small trucks and the like vaguely connected by plastic and canvas awnings that provide adequate protection from the weather for the goods on offer but little for the customer. Many retailers offer their goods on a cash only basis. Many run out of stock well before the advertised closing time for the market.

How convenient are these markets? According to the statistics, only 43% of markets are open on a weekly basis and all the others less often. Further, most markets open at the crack of dawn and are closed by lunchtime. This is hardly ‘convenient’ as defined by the web-savvy.

How low are the prices? Some items are cheap and many are not. It depends on the season a bit, but the more important question is, How many people shop at the farmers’ market because of the promise of cheap prices? The answer is, Not many. People shop at farmers’ markets for the promise of good quality fresh food. They shop at the markets to be able to speak to the people who know their products, who can provide advice about preparing their products for eating, for being given handy advice on storage and for being immersed in a fresh food experience that is full of authenticity, honesty and the human desire for goodness. It’s not about the lowest price.

How much choice is there? There is often less choice than at the local supermarket for many products as the markets only offer seasonal produce – nothing out of the storage chillers. There is often more choice as the small grower can introduce his or her particular products not grown in the volumes to attract the grocery chain buyer. In fact, each stall-holder typically has their specialities, the things they like to grow and can grow well, weather permitting. A farmers’ market is not about the width of product on offer.

Not convenient, not cheap and narrow choices, but an almost “massive” 7% of total fresh food sales across the country. A fantastic lesson in Retailing 101. It’s all about what the customer wants.

Joe Ludwig’s review, however inadvertently, illustrates to community pharmacies that the future is not and never has been all about technology. It demonstrates that the way technology defines, or redefines, consumer behaviour is not universal. It reminds us that people are different with different motivations even when it comes to a ubiquitous staple such as food. So it is with their healthcare. Different people have different attitudes and beliefs about their health. Some will be satisfied with a digital experience. Just as many will never be. As community pharmacies turn their attention to their ‘front-of-shop’ and see their local communities as customers, not only patients, we need to look for what really motivates them. That’s the difference between a smartphone and a smart retailer.

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