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Mr Da Gama says an additional tool in the data toolbox is that of overlaying your local demographic data with sources of disease statistics, such as the Australian Institute of Health and Welfare. “To look at a certain local demographic might tell you one thing, but when you look at it overlaid with health or chronic disease information, it can offer a whole new insight,” he said. “An example would be having a demographic that has a high propensity for smoking, but disease data showing smoking disease is low. Without the disease data, opening a smoking cessation clinic might seem appropriate but, having seen the additional data, you can see a clinic might not actually work, because people aren’t seeing the effects of the disease and there’s no desire to quit.” Objective self-assessment Having identified your performance against the benchmark of your local competitors and considered your local demographics, it’s time to look more closely at your own pharmacy using a range of metrics. Mr Da Gama says a key metric pharmacies should use in analysis of their store is sales per square metre of floor space. “It’s a metric used by most major retailers and although it’s been around for years, the majority of pharmacies don’t use it,” he said. “One of the main benefits is knowing if you’re using your space efficiently, because if you have very low sales per square metre, there are a number of things you can do. “There are companies, such as instigo and other businesses, offering retail layout consultations that can lead to the addition of a counselling room inside your pharmacy, allowing you to do a lot more consultations, including those that you couldn’t ordinarily do in a pharmacy, such as sleep apnoea tests.” Of course, adding a consulting room is only one solution and it pays to consider additional metrics to gain a more complete picture. Understanding customer behaviour using foot traffic data and observing how they flow through your pharmacy is certainly worthwhile. Is your flow creating opportunities for customers to browse, thereby generating impulse buys, or do they fast-track to scripts and then leave? Do your staff engage with customers in-store, leading them to make the all-important additional purchases that make such a significant contribution to overall profitability? Metrics such as basket size and mix, and sales by day of the week and time of day will yield valuable insights about customer behaviour. From a product perspective, analysing your product mix and knowing which products have acceptable levels of stockturn versus those that are simply taking up shelf space is an important part of the planning process, too. Align with current trends Retail Pharmacy magazine spoke with instigo Director Andrew Pattinson to learn more about how the current pharmacy landscape might impact the decisions pharmacy owners make concerning their future business direction. “Today, when pharmacies are looking at their community and seeking to understand the products and opportunities that exist from a patient and customer engagement perspective, we’re increasingly finding those products, opportunities and services are allied health products – so solution products around disease states,” he said. “We’re seeing continued global changes in customer behaviour, with foot traffic down. Customer shopping habits have changed, there are more convenience opportunities, and COVID has amplified this shift even further. “The shopper’s psychology has changed too, with safety, security and trust now more critical than they’ve ever been. “With the 7CPA signed and locked in place, I believe the time for investment in future business models is now. The government looks to have a stated intent of aligning pharmacy and future pharmacy outcomes with a 10-year national health plan, and that suggests this isn’t a fad but will be a trend. “We’ll see pharmacy program support continue, certainly through 7CPA and 8CPA, so now, when you’re looking at your five- and 10-year business plan, it’s about asking ‘what does the model for healthcare look like in the future?’” The recent signing of a positive 7CPA means the government has given a degree of security to pharmacies around the core function of dispensing, something that the threat of double PHARMACY BUSINESS MODELS 31 dispensing had placed under considerable doubt right up until the details of the newly signed agreement were revealed. With revenue for dispensing now more secure, pharmacists have the opportunity to see a clearer picture of what the next five years might look like, enabling them to be very deliberate about aligning their businesses appropriately. “If you’re a dispensary and you know that that process of dispensing medicines is locked in, safe and secure for the next phase of the business cycle, the question is: what else will you do to improve patient engagement and increase basket size? It’s simple economics to know if there are fewer people coming in, you need to provide them more services. “That includes finding ways for the pharmacists and the trained staff to sit down and engage with patients about what a better health outcome looks like. For example, ‘how are we going to help the cardiovascular patient better manage and maintain their overall health?’” In addition to the more secure future of dispensing, Mr Pattinson believes the current trend of GPs working remotely with telehealth consultations could also turn out to be of benefit to pharmacies. “In many communities, a lot of the GPs have been working remotely,” he said. “While this was happening, pharmacy saw tremendous growth in things like flu vaccinations and point-of- care opportunities. “Part of that growth is because the doctors are doing telehealth. We believe if they continue, the opportunity for pharmacy to be the point of care destination will simply keep growing. “We don’t know if this will be a long- term structural shift in how things happen, but the government is showing the intent to continue telehealth beyond October, which clearly links back to any considerations about your pharmacy layout.” With the government stating the future of pharmacy will be aligning with national health initiatives, it does appear further opportunities will arise. Any pharmacies failing to position their businesses in readiness for the emerging opportunities will sadly miss out. We’re already seeing increased TO PAGE 32 RETAIL PHARMACY • AUG 2020