Among retailers, the pharmacy vertical is perhaps the most competitive and ruthless—acquisitions coupled with the emergence of online vendors mean there are fewer total players on the field, and those that still exist are bloated and fall short on customer experience. For example, while Walgreens’ same-store pharmaceutical sales increased by 5.1% in Q2 2018, their same-store retail sales actually decreased by 2.7%. The reason is that consumers are paying higher prices for their prescription medications, but moving online to purchase the over-the-counter drugs and cosmetics that fuel the drugstore retail business. It’s no wonder that drugstore chains are searching for innovative ways to improve pharmacy sales.
CB4 helps drugstore chains improve pharmacy sales by refocusing on the customer and correcting persistent floor execution problems that create lost sales. Our software helps both Operations and IT teams improve business processes through data. Below you’ll find five ways that CB4 helps pharmacies increase same-store sales by focusing on improving the retail business.
Solving Costly Floor Execution Problems
There’s no customer experience worse than the empty-handed exit. CB4 uses machine learning to help pharmacies correct persistent floor execution issues like out-of-stocks, missing or damaged merchandise, incorrectly applied promotions, and more. Most importantly, we fix these issues only when they affect the products with the highest local consumer demand, i.e. those items that your customers love the most and expect to see on your shelves
Our clients who focus on these problems using CB4 have successfully created between 0.5 – 2% in net new sales on average. In the pharmaceutical vertical, where velocity of sales is highest, CB4’s impact is particularly meaningful.
If you’re interested in running a proof of concept on your POS data to see how many issues CB4 detects, book a demo at the bottom of this article. The process can take as little time as 24 hours and all we need is 12 weeks of aggregated POS data.
Improving the In-Store Customer Experience
The in-store customer experience is the most important aspect of a brick and mortar retailer’s strategy today. According to the 2018 Global Path to Purchase Survey, 96% of global shoppers have left a store without making a purchase on at least one occasion. Of those surveyed, 67.3% said it was because they couldn’t find the product they came to purchase.
By correcting the floor execution issues mentioned above, pharmacies make it easier for customers to find what they’re looking for. In a survey we conducted earlier this year, we asked more than 2,000 US retail shoppers about their experiences shopping in brick-and-mortar stores. As shown below, we found that the majority of customers who can’t find their desired product head to a competitor, rather than (a) search for it at another location in the same chain, or (b) purchase a similar product available in that store.
If I Can’t Find What I’m Looking for in This Store, I:
Don’t drive sales for your competition. Focusing on the fundamentals (like floor execution) can significantly improve pharmacy sales for your business. CB4 allows you to do just that, and at scale.
Knowledge Transfer During Staff Turnover
Staff turnover is high in a retail environment. How can you ensure new employees are focusing on the most important items in the store, especially after turnover? On top of solving persistent floor execution issues, CB4 helps new employees become familiar with top-selling merchandise, so staff can stay on top of those items even when an issue isn’t detected. In addition, floor execution problems aren’t always obvious. Anyone can detect a hole on a shelf, but CB4 encourages staff to look deeper and search for the root cause of a dip in sales.
For example, CB4 might alert a store manager that there’s an issue affecting a checkout lane impulse purchase, like a pack of gum. The store manager takes a look and doesn’t see anything obviously wrong: the gum is there, stocked and in full view of the customer. On a deeper look, however, the manager finds that there’s actually a flavor missing—it’s been left in the stock room, and the space is filled with a repeated flavor. The manager then retrieves the missing flavor from the stock room, places it on the shelf, and completes the task in the app. She even moves the gum to a more prominent location in the stockroom and sends an email to her overnight stock associate to keep his eye on all flavors of gum moving forward, now reminded it’s in high-demand. Sales of that specific type of gum then increase for more profit in that category for that store.
Hyper-Localized Top-Seller Lists
Our technology is powered by advanced machine learning algorithms that detect hyper-local demand for individual SKUs in specific stores. It’s through monitoring sales of these products that we are able to detect floor execution issues. A myriad of external factors unique to each store creates demand for a specific SKU and, for this reason, no two stores are exactly alike.
While regional or chain-wide top seller lists have their purpose, CB4 creates single-store top seller lists. Our capacity to do this is especially critical in a vertical as competitive and open to external influence as pharmacy. CB4’s recommendations are more accurate than other tools that monitor for drops in sales or that benchmark items from year-to-year. For a more in-depth discussion on this topic, check out our article, Top Performers, a Retail Blind Spot.
By using CB4, your retail team becomes familiar with the items in their specific store that their customers love the most, and the recommendations they receive to fix issues are much more accurate than other reporting tools as a result. This ultimately serves to improve pharmacy sales and elevate the customer experience across your entire chain.
Keeping Competition at a Distance
In pharmacy retail, your competition could be just a few footsteps away. What differentiates you from them? As described above, the majority of customers who cannot find what they’re looking for shop at the nearest competitor, and according to Yotpo, 80% of customers say it takes at least three repeat purchases to make them a loyal shopper.
Customers in your stores may not function on a three-strikes-and-you’re-out rule, but it’s worth considering how many times a customer will leave your store empty-handed due to floor execution problems before they begin shopping elsewhere. These seemingly small issues really do have a big impact on their opinion of your brand, on their loyalty, and of course, on your bottom line.
Competition is advancing, profits are decreasing, and pharmacy brands have to focus on the customer experience to differentiate themselves. Forward-thinking retailers who want to improve pharmacy sales are correcting these challenges with advanced machine learning technology. How are you doing this today? CB4 helps thousands of stores improve the in-store experience by focusing on the fundamentals and improving floor execution.
Let’s see how CB4 works in your environment, and how we can help you improve pharmacy sales. Schedule a demo below to see the software running on your own data and learn how many operational issues CB4 can help your team solve.