August 14, 2008
GHQ: Looking behind the pharmacy counter
By Seth Mendelson
Through a special arrangement, what follows is an excerpt of a current article from Grocery Headquarters magazine, presented here for discussion.
According to a consumer-intercept survey conducted by Grocery Headquarters this year, the vast majority of shoppers have high expectations of their pharmacy. Most importantly, they are looking for great service, professional advice and convenience. Yet, many shoppers noted that when the pharmacy fails them in some way, such as dispensing the wrong prescription or providing shoddy service, they are quick to try another outlet.
Overall, the survey, which was conducted in the metro New York, Boston and South Florida areas since the beginning of the year, painted a very positive picture for the pharmacy business at the nation’s grocery and drug stores. For example, most consumers said that they were “extremely happy” or “very happy” with the job done by their favorite pharmacist. Most respondents also said that service at the pharmacy counter, especially at grocery stores, has improved dramatically in recent years. Finally, the vast majority of consumers said they were “extremely happy” with the service provided by the pharmacist or a pharmacist aide when it came to helping them choose the appropriate over-the-counter products.
The study also found that many consumers are eager to develop a close relationship with their pharmacist and many are likely to know their pharmacist on a first name basis, even at many of the larger grocery and drug store chains.
It also showed that consumers, with the notable exception of the New York area, have come to expect grocery stores to include a full-service pharmacy counter. Nearly 70 percent of those questioned reported that they use a pharmacy at a mass-market outlet, including grocery stores, chain drug stores or Wal-Mart. Most of those say that convenience was the deciding factor in choosing a chain store over a local drug store. Many also said that chain stores offer better pricing than independent pharmacists, though not necessarily better service.
Not all of the results of the survey were positive. Many customers cited long waits and a change in pharmacists as reasons why they have ended a long-time relationship with a particular pharmacy or are looking to change pharmacies. Shoppers seemed particularly concerned by a high turnover rate in pharmacists, with many citing the fact that their favorite store may have a turnover rate of two to four times every few years.
More than 60 percent of those questioned said that they are always looking for what some called “reassurance” at the pharmacy counter. Many consumers went so far as to say that they were significantly less likely to stay with a particular pharmacy if there was any kind of substantial turnover in the department.
Discussion Questions: Do you agree with the survey respondents that service at pharmacy counters, especially at grocery stores, has “improved dramatically” in recent years? If so, what’s driving the improvement? Secondly, what can retailers do to combat the two lingering customer complaints: long waits and high pharmacist turnover?
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Grocers are getting there. Many of them were under the impression that a pharmacist was like a store manager and would put up with all sorts of abuse from headquarters suits. This produced an environment that only a very naive pharmacist would tolerate and then not for very long. Pharmacists are highly trained medical professionals and they are in short supply. Certain situations are posting offers in excess of $150,000 per year as a starting salary.
Those operators who choose to find out something about the business soon find out that the pharmacist can be the most valuable employees in a location. They can also find out that not valuing their pharmacist can result in expensive turnover and even more expensive lost customers. I believe one of the basic problems grocers have is they are trying to manage the pharmacy portion of their business with grocery personnel. If you want your pharmacy to produce, then put a pharmacy professional in charge of that part of your operation. If you aren’t willing to make this commitment, then maybe you should avoid the pharmacy and convert the space to floral and greeting cards.
In-store pharmacies face 2 major long-term sales threats: (1) that the federal and state governments will reduce dispensing fees for Medicaid and Medicare and (2) that pharmacy benefit managers using mail order prescriptions will undercut prices for the insured folks. Number 2 is especially critical because a typical insurance plan with a $50 deductible for a brand-name patented drug will charge the insured $600 annually for the prescriptions, but the mail order pharmacy benefit manager will often charge only $400. Multiply that by 5 drugs per family and the savings can be $1,000/year. Is the pharmacist in the store worth $1,000 to an insured family?
I must agree with the survey, both from a personal point of view and doing store checks.
While one may hate to see the decline of the independent pharmacy, and the continued consolidation of the chains, it is my observation that the pharmacists working for the chains are better trained, more up to date and more engaged with the client.
While doing store checks, I often ask about items that are NOT behind the pharmacy counter, and the pharmacist most often knows the item and where to find it.
Personally, before finally changing to Duane Reade, we tried each of the neighborhood independents. Unfortunately, the independents failed on all levels of customer engagement.
I’m not sure whether I agree or don’t but I do have a suggestion about avoiding turnover–treat the pharmacists more like human beings. These men and women are pulling incredibly long shifts on their feet and trying to pack more and more work into an inflexible schedule. As to the lines? Wait until all the Boomers pass away and they’ll be shorter.
I don’t see many problems. Most prescriptions are filled through the drive-through, online, or phoned in. People go where the cost is cheap and the insurance is accepted. Once a relationship is established, changing pharmacists is like changing a doctor or dentist. My pharmacist would have to do something pretty bad in order for me to change.
Having a pharmacy that accepts your insurance seems to be the most important criterion. Then, if there is a choice, developing a relationship with the pharmacists or group of pharmacists is important. Beyond that, having pleasant personnel behind the counter who are answering the phone and checking out the orders is important for developing a relationship. Being able to provide those services well can make a big difference.
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Grocers are getting there. Many of them were under the impression that a pharmacist was like a store manager and would put up with all sorts of abuse from headquarters suits. This produced an environment that only a very naive pharmacist would tolerate and then not for very long. Pharmacists are highly trained medical professionals and they are in short supply. Certain situations are posting offers in excess of $150,000 per year as a starting salary.
Those operators who choose to find out something about the business soon find out that the pharmacist can be the most valuable employees in a location. They can also find out that not valuing their pharmacist can result in expensive turnover and even more expensive lost customers. I believe one of the basic problems grocers have is they are trying to manage the pharmacy portion of their business with grocery personnel. If you want your pharmacy to produce, then put a pharmacy professional in charge of that part of your operation. If you aren’t willing to make this commitment, then maybe you should avoid the pharmacy and convert the space to floral and greeting cards.
In-store pharmacies face 2 major long-term sales threats: (1) that the federal and state governments will reduce dispensing fees for Medicaid and Medicare and (2) that pharmacy benefit managers using mail order prescriptions will undercut prices for the insured folks. Number 2 is especially critical because a typical insurance plan with a $50 deductible for a brand-name patented drug will charge the insured $600 annually for the prescriptions, but the mail order pharmacy benefit manager will often charge only $400. Multiply that by 5 drugs per family and the savings can be $1,000/year. Is the pharmacist in the store worth $1,000 to an insured family?
I must agree with the survey, both from a personal point of view and doing store checks.
While one may hate to see the decline of the independent pharmacy, and the continued consolidation of the chains, it is my observation that the pharmacists working for the chains are better trained, more up to date and more engaged with the client.
While doing store checks, I often ask about items that are NOT behind the pharmacy counter, and the pharmacist most often knows the item and where to find it.
Personally, before finally changing to Duane Reade, we tried each of the neighborhood independents. Unfortunately, the independents failed on all levels of customer engagement.
I’m not sure whether I agree or don’t but I do have a suggestion about avoiding turnover–treat the pharmacists more like human beings. These men and women are pulling incredibly long shifts on their feet and trying to pack more and more work into an inflexible schedule. As to the lines? Wait until all the Boomers pass away and they’ll be shorter.
I don’t see many problems. Most prescriptions are filled through the drive-through, online, or phoned in. People go where the cost is cheap and the insurance is accepted. Once a relationship is established, changing pharmacists is like changing a doctor or dentist. My pharmacist would have to do something pretty bad in order for me to change.
Having a pharmacy that accepts your insurance seems to be the most important criterion. Then, if there is a choice, developing a relationship with the pharmacists or group of pharmacists is important. Beyond that, having pleasant personnel behind the counter who are answering the phone and checking out the orders is important for developing a relationship. Being able to provide those services well can make a big difference.