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30 PHARMACY BUSINESS MODELS LET DATA ROLL THE DICE By Peter Howard. Rights are rarely equal When I was a child, the phrase ‘doing the right thing is never wrong’ made sense to me. It was something my mother liked to say when convincing me to confess to crimes like putting chilli in my sister’s sandwich, and it sometimes worked. For me as a child, there was no grey area in wrong and right, and being banished to my bedroom for an hour seemed a fair trade for seeing my gasping sister’s bright red cheeks. As an adult, I’ve learned the glib and somewhat simplistic phrase raises more questions than answers because, with business decisions, identifying the ‘right thing’ is notoriously difficult. The options we face invariably have pros and cons, and achieving an optimal outcome always depends on factors beyond our control. This is certainly true for the owners of community pharmacies seeking the right business model for their future. The options are vast, the variables are complex and what’s right for one business might spell disaster for another. To help with this dilemma, our article on pharmacy business models focuses on the process of choosing a model, rather than on the models themselves. We’ve consulted the experts and explored some approaches to help identify a business model that suits your situation. Dive into the data Retailing is a complex industry leading some business owners to rely on instinct or a roll of the dice when making decisions, ignoring the multiple sources of data available to help with the process. Retail analytics and technology company NostraData specialises in the retail healthcare space. Director Mike Da Gama explains how data can pinpoint the strengths and weaknesses of your pharmacy across a wide range of parameters, giving insight into the areas worthy of development, assessment or removal. “A good starting point for making business decisions is to know how your pharmacy is performing against other pharmacies in your area,” he said. “The way we do this is with a catchment area analysis that tells you about the pricing and the performance of different product categories within your catchment area. “Using your existing customer data, whether it’s prescription or loyalty data, we find the postcode of the customers you normally get, and analyse it looking at the population density of the area. Then we look at the products that are being sold in that entire catchment area, excluding your store. “From that analysis we can identify, for example, there’s a new skin range available and it’s selling really well but it isn’t something you carry. “I think once you’ve got a good idea of what others are doing, you’re able to sit back and consider what kind of analytics you need for your own store, which leads to all sorts of different questions from our customers. “One of the common ones is around price banding, as in ‘on my top 200 products am I above or below the average price in my area?’ Another is, ‘are there any products missing from my top thousand products based on what other pharmacies are doing?’ “Spotting trends is very, very hard and takes a concerted effort and structured approach, whereas this kind of analytics is bread and butter stuff that pharmacies should all be doing, because it’s available.” RETAIL PHARMACY • AUG 2020