Podcast | Customer First Strategies for Retail Pharmacy

With Tom Block, Christiane Feresin,
23 June '22

Tom Block (00:12): Welcome everyone to this dunnhumby podcast series about the importance of putting your customers first, whatever type of retail setting you operate in. My name is Tom Block, who together with my colleagues, David Clements and David Ciancio, we host a series of podcasts with experts across many different facets of retail disciplines in merchandising, marketing, and operations. We offer our practical examples, various techniques and lessons that have been learned from a longstanding history of relationships with both retailers and brands.

Today, we’re speaking with Chris Feresin. She’s our resident expert in customer engagement, which from the perspective of dunnhumby really is about connecting customers through loyalty programs, customer relationship management that occurs really throughout the life cycle of a customer’s experiences with a retailer. Chris, welcome, and thank you for joining us.

Christiane Feresin (01:05): Thank you for having me, Tom. Very happy to be here and excited for our discussion.

Tom Block (01:09): Great. And for today’s discussion, we are really going to be focusing specifically on the retail pharmacy sector and many of the evolving needs of the customers in this, hopefully, post pandemic world that we are entering now. Just as a quick background, even before the pandemic began, retail pharmacy was really going through quite an upheaval and continues to do so and has even been accelerated by the course of the last 24 to 36 months. Historically, this has been a business that, in at least North America but also in some of the other global markets, has operated very much in the space of both healthcare, as well as retail and within retail even extending in many cases to a convenience type of format.

With this, their advantages have historically been around convenience locations, being able to offer quite a breadth of assortment for relatively small spaces. But in this world where digital has really ramped up over the course of the last few years, and again, even accelerated with the pandemic, a lot of those competitive advantages have really started to erode, and the businesses have really had to look internally to understand how they can re-engage with the customer and continue to make their proposition a great and compelling one for their customers.

Chris, if you don’t mind, now, I’d love to get your perspective on some of these changes and challenges that have happened and what you think is the best moves for retail pharmacies to stay relevant today.


How can retail pharmacies remain relevant?

Christiane Feresin (02:36): Tom, I think you’re spot on. I think that when we look at customer’s preferences, and I can refer to our RPI report, we saw how the values shifted from years, 2017 to 2021. How the core values were shifting to all the emotional values. If we see how customers would prefer to deal with perceived prices and quality and how it is shifting to the importance of digital, having a good experience or having operations at store. It’s speed, getting in and getting out these stores quickly, find the products. All of that shifted very much.

And for the very first time, we see that those values amplifiers, they are even above the value core, the price, the quality perception. And this is where the main opportunity lies for all retailers, especially with pharmacy. So, when we see this movement of all customers looking for good digital experiences and they are looking for speed and they are looking for convenience. The way that the pharmacy retailers were positioning themselves was really to be close to the customers through mobile, web, through the experiences that would enable customers not to get in touch with people. So contactless was more important and assured customers that they could have the medications that they needed, or the products that they were used to.

Those were all very important for a pharmacy’s relationship for customers, especially in this moment where health became something even more important for everyone. This is one of the biggest things that digital brought to this industry, Tom. So, if it was important already with COVID, it became even more. So, it was a great opportunity for retailers to really position themselves into the way they deliver value for customers into this convenience and speedway.

Tom Block (04:32): Yes, I think that’s a really great point. In fact, in this space where I think many thought that convenience was defined just by the physical location. The new level of convenience that’s really driven by digital and specifically mobile is something that’s really gained traction in retail pharmacy over the course of even just the last 24 months. And I think that while we’ve seen a number of COVID trends, ebb and flow. There are some that are starting to swing back a little bit to how things were pre-pandemic. However, you do have some of these trends. And I think, especially, digital adoption, even in a retail pharmacy type setting is something that is certainly here to stay.

And something that we’ve seen continue to pick up, even after the initial shocks of COVID and the impacts that had on the ability for people to be able to physically go to locations, relative to digital. We’ve only seen that continue to increase. So I think that having that kind of flexibility for the customer is absolutely critical to help drive that loyalty. Another thing that I’d be interested to get your thoughts on, is around how retail pharmacy, given that it has this intersection between retail and healthcare, how they can potentially amplify that relationship and be able to have that more sticky and long lasting type of relationship with customers?


Building an emotional connection is key

Christiane Feresin ((05:51): One of the things about the health industry is about the emotional connection that can be created with customers and patients. Because when you are managing your health, you want to make sure that you are talking with people that you can really trust. And I think that during this period of COVID, there was a lot of uncertainty, and we still don’t even know if this is gone. But there is a huge diversity of opinion about, “Get the vaccines. Do not get the vaccines. Which are the side effects? Can I just handle this? Do I want to handle all those side effects?” And the retailers that could connect with customers and support them in this uncertainty, I think it was really pivotal to create this emotional connection. So how it connects with other health conditions and how retailers could build trust and respect because it became even more important.

One very interesting trend that we saw is how pharmacists became even more important to customers. And if this was already a trend that was happening before, again, COVID cemented this trend. And people were visiting the store way less. And this was representing a great opportunity for retailers to not only build this emotional connection, but also to deliver the functional values around convenience, speed, easy access, easy navigation through their mobile apps. I think that was really important. Truly, I believe that was a moment to create or cement, if was already created, but really reinforce this emotional connection that the pharmacist could create with customers and patients respecting whatever the decision was and supporting them in whatever path they decided to go. I think this was crucial.

Tom Block (07:38): And to your point about pharmacists, they have consistently been ranked as some of the most valued and most trusted professionals across any profession. That is a critical piece that, I think, pharmacists have realised for many, many years. The question is, as the world changes and customers change, how can we potentially use these invaluable assets to help drive the business, but also to form that lasting connection with customers? Because this is their wellbeing, they are as much patients as they are customers, in the eyes of the pharmacists. That is the critical relationship to develop. I think the last thing I was curious about if you’d be able to provide some perspective on is, there’s a lot of change in the business. You’ve obviously had shocks like COVID that have not really invented new behaviours but have accelerated a lot of behaviours that were already in place. As well as just the broad challenges of the business as customer and retail and healthcare all evolve.

When you think of the activities of customer engagement around loyalty programs, around the CRM connections that are now available as customers have become more adept at mobile and much more digitally engaged as well as just life cycle marketing in general, because you always have customers coming and going and it is critical to try to hold onto and delight those best customers. And be able to build a business around the idea of what works best for them in hopes of keeping them, but also attracting new customers that are similar. Can you speak to just a few of the key innovations in loyalty and in customer relationship management, lifecycle marketing, that you think is relevant for pharmacy today?


Being relevant is not an option anymore

Christiane Feresin (09:21): Yes. It’s really interesting to see how retailers can use these amplified values to deliver a good offering for customers. And there are many ways of connecting customers to their proposition through a valuable loyalty program. So, it is going further beyond what discounts give. So, it is going beyond the functional value. It has really been able to leverage this relationship, helping customers with education and helping customers with convenience through subscription. So, we saw a huge boom of premium loyalty programs, which are the ones that customers go and pay to have some level of benefits upfront, which is really giving customers the ability to understand which are the benefits that they will have even before going to a store. So, this type of positioning was really helping customers to pick and choose, which were the best places for them to go.

So, I think that out of all this loyalty positioning that the retailer is providing to customers, it is important that they keep this conversation going through a very consistent lifecycle with strategy. It is key because this is the turning point in having the loyalty proposition that does not just stop on giving the discounts for customers because they are visiting the store. So, a really strong communication strategy will make sure that your customers are constantly receiving all the contents for what matters most for them. And when I mean content, I would say articles, all the important talks services that are available either in store or online, products that make sense for customers’ needs and their expectations. Again, supporting customers in their health journey. And this is why having a personalised capability is so crucial. More and more customers are expecting this type of relevancy.

Being relevant, it is not an option anymore. Retailers cannot afford to send irrelevant communications to customers anymore because they are just being bombarded with so many communications that they must be careful with where they are investing or spending their money. And customers, on the other hand, do not want to interact with poor relationships. There are so many options out there. So, if the competition is so hard and strong, we do want to make sure that every touch point for customers matters. And I see this really as a great opportunity to, again, expand your emotional connection and deliver value in every interaction with customers. So I would say, Tom, that the biggest piece here will be to create a very consistent, relevant communication wherever customers are. Either in-store or out of store, from the sofa till they start.


A shift to a blended healthcare model

Tom Block (12:05): Excellent. And to your point, as these businesses evolve, and as they stretch further into healthcare, that relevant communication that linked to this business, I think it really becomes something that can be so enhanced from where it was traditionally as more retail centric, to now this blended healthcare retail model. The communications that you have, the relationships that you have, are incredibly strong because of the importance of all these elements and certainly, customers’ and patients’ health.

So, with that, I would like to thank everybody for listening today. Hopefully, you’ve found this discussion to be informative and useful. We’d certainly like to hear your thoughts on the subject. You can always do this by either emailing myself or emailing Chris at dunnhumby.com. I’d like to thank Chris again for joining us today and being able to provide her perspectives on customer engagement and retail pharmacy. And if you’d like, you can always access these podcasts on this subject, as well as the previous conversations that we’ve had. At Customer First Radio on Spotify, or also available on our dunnhumby.com website. Thank you again and thank you Chris for joining us.

Christiane Feresin (13:11): Thank you very much, Tom.