Independent state of mind: HRG report highlights independent pharmacy’s strengths

Hamacher Resource Group has served independent pharmacies since 1980 and has been conducting and publishing research on these pharmacies and their customers since 2008. In releasing the Independent Pharmacy Research Study 2020 report,  Dave Wendland, HRG’s vice president of strategic relations, said independents showed flexibility, creativity and perseverance as they’ve had to reshape their business amid the pandemic.

The findings support their positive reactions. When asked about the state of their business, two-thirds (67%) of independents survey indicated that their non-prescription business was growing or holding steady. “We look at that finding as a win. Every day we read that there are lot of pressures across the retail landscape, and independents have held these pressures off,” said Wendland. 

Another positive finding for independents comes from customers, who said that service was a top reason (63%) for shopping at the pharmacy. 

“When you think about it in the context of the pandemic, having a community-based pharmacy that is easy to get in and out of which provides superior customer service, it’s understandable why shoppers highly value that shopping experience versus what may be encountered in other retail formats,” said Wendland.

The survey’s examination of point of sales data also bodes well for independents. Categories that over indexed, or did extremely well in March, just as the pandemic was launching, are still holding their own. 

Wendland noted that these stellar categories included household products, skin care, and first aid. POS data analysis revealed the cold & allergy, vitamins & dietary supplements, and pain relief categories represent nearly 43% of unit sales in health and wellness.

HRG also found that after the initial spike when shoppers stockpiled many of these items, they didn’t stop going to the pharmacy to buy these items. “Categories like first aid and household products continue to achieve higher sales in units and dollars than they had when we went into the pandemic,” said Wendland.

On the subject of competitive channels for OTCs and vitamins and supplements, pharmacists indicated from their perspective that online shopping, Dollar stores, and specialty shops, like Ulta and Sephora for beauty, and Vitamin Shoppe and GNC, for vitamins and supplements, have become more prominent competitors since the survey conducted in 2012.  

“We saw the largest percentage shifts in those three channels as alternative retailers for those product classes,” said Wendland. 

Independents are taking action in this area, with some 19% of respondents indicating they currently have an e-commerce offering for non-prescription items, while 15% of independent pharmacies indicated that developing one is a priority in the next 18 months. “Independents are investing in e-commerce, not only recognizing it as a threat competitively, but focusing on it going forward as consumer demand for convenient options increases.”  

Independents also are investing in health education, with roughly half of the pharmacies said they have done so, or are planning to within the next 18 months, and more than 60% are offering health information and resources on their website. “We know these pharmacists are a wealth of knowledge and they are looking for ways to share that with their patients, shoppers and family caregivers,” said Wendland.

Having a delivery system also is on many independent pharmacies’ radar, with 83% of pharmacies surveyed saying they had a delivery system in place, and another 5% mentioning that they were implementing it. “A large number of these pharmacies bend over backwards to make sure people have access to prescriptions that are important in managing their chronic conditions and health. They also are delivering OTC medicines, personal care items and other products to people who didn’t want to leave the house,” said Wendland.

Finally, when it comes to immunizations, more than two thirds of the pharmacies interviewed said that they are offering vaccinations. “They are on many street corners, and in the rural areas where a lot of patients may not have access to a clinic, hospital or chain pharmacy. I’m hoping the independents, having been so successful with the flu vaccine for many years, can position themselves as an asset in the COVID-19 vaccine deployment,” he said. 

What can large chains learn from a study about independents? 

Wendland said when chains look at the study results, one finding that will catch their attention is that independent pharmacists’ OTC recommendations are accepted nearly 50 % of the time. 

“Independents are very focused on personal patient care. They consistently rate very high when it comes to trust. They are so engaged directly within their community and often have been active in their local neighborhoods for several generations,” he said.