Changing lifestyle has pushed the demand of nutritious supplements, seen stocked in the pharmacies nowadays. Here is a report on the growing nutrition merchandise in pharmacy retail, transforming the traditional business model.
There has been intense market competition and consolidation among providers of pharmaceutical products. In the retail pharmacy, the notable changes have been seen in closures of local independent pharmacies and growth in pharmacies located in supermarkets and mass merchandise stores.
Giant pharmacy chains like Guardian Pharmacy, Apollo, Religare and others similar to these are seen on the busiest street of Indian small and big towns. Not only do they fill prescriptions and sell OTC medicines, but are also offering wide variety of nutrition merchandise to the consumers.
“In the last 12 years, I have personally seen a significant shift of people using nutritious supplements. The actual product for example Vitamin C is something which is good for all of us and could be obtained through lime water. However, today, people are taking Vitamin C supplements. Likewise for Omega 3 fatty acids which one can easily get from fish, still people prefer to pop its pills. So, that is one part. However, the other part is the soil in which our fruits and vegetables grow, that is also eroded from nutrition. Therefore, what the nature normally provides to us is not available. Thus, the demand for supplements is growing as more and more awareness is spreading,” noted Ashutosh Garg, Chairman and Managing Director, Guardian Pharmacy.
Pharmacy merchandise watch
With the emergence of new trends, retail pharmacy has seen a significant shift in expanding its reach to the patients through the over-the-counter (OTC) department and healthcare counseling and in helping to connect the dots between health apps and self-care diagnostics.
“I think more than merchandising, it’s the visual merchandising engagement with the consumer at the front. These are the products on which customers have a lot of queries. The only difference in nutritious products and other OTC product is, people pick it up because they know and have seen advertisements. But in this particular case, there is a little discussion, engagement and conversations happened at the pharmacy level,” said Atul Ahuja, Vice President- Retail, Apollo Pharmacy.
Reportedly, the year 2015 will be a revelatory year for the Indian health sector as a portrait of the newly-insured emerges, fostering better care management programs and shifting in marketing strategies.
e-Tailing in nutrition merchandise
With exponential adoption rates of smartphone usage, online purchases harnessing the opportunity across the customer journey. This could be the ultimate game changer.
“Technology has revolutionalised various industries and its integration further in the Pharma retail space in India, is absolutely essential. A company like ours, which specializes in the area of narcotics and psychotropics medicines, in which doctor prescriptions is required, if integrated well through e-prescriptions, will increase patient compliance and accessibility to patients. With the use of right technology and mobile applications, patients can get useful information like locating the pharmacies which have their required medicines, general information about the nutraceutical products and their prices, etc.,” suggested Dr. Kunal Saxena, Managing Director, Rusan Pharma Ltd.
Nevertheless, with the growing rage of technology in all possible sectors in Indian trade industries, Traditional e-tailers are opening brick-and-mortar locations because they understand very well the highly personalised services can offer better traffic on their online store. In fact, the traditional brick-and-mortar retailers are creating more personal, digital-savvy experiences in the store to serve shoppers better.
Current purchasing trends
Despite perceptions that the rise of eTailers would jeopardize the physical retail store, Indian consumers are favouring the brick-and-mortar model. Tracking the current consumer’s preferences unveiled that Almost 70 per cent of consumers would prefer to shop from a brick & mortar store versus online, specially the one made their mind to try something new with the influence of peer group.
“Looking at the changing lifestyles, various lifestyle diseases are coming in; there is a lot of focus on nutritional supplements, vitamins and nutraceuticals. If you look at these kinds of products, there is a level of advice that is also required to sell. Thereby, at pharmacies, we are really equipped with pharmacists and these pharmacists are well placed and equipped to understand the requirements of the consumers and keep relevant nutraceutical products for them. So, to be more precise, pharmacy is ‘The channel’ to sell the nutraceutical products to the consumers,” added Ahuja.
The pricing strategy of the pharmacies again differs from the products in demand, target consumers, geographical location and partnership with nutritious product manufactures etc.
Infact, Garg informed that the pricing strategy of the nutritious supplements could be decided as per the import duty on the products.
“There is nothing like a pricing strategy for the supplements. There are very high import duties on supplements. Therefore, if we have to go in for large profit margins and then the pricing will be atrocious. We have been working with the world’s largest supplements company called GMC Lempel for the last 7-8 years and we are the exclusive master franchising in India. We are trying to keep our prices as low as possible to be able to enter the market and get a larger customer base because these are very-very heavily taxed because of the import high duties,” said the Guardian Pharmacy CMD.
Significantly, Ahuja of Apollo pharmacy unveiled, “65 per cent of our sale comes from pharmaceutical medicines, which are at the different marginal structure and the remaining comes from other products which includes nutraceuticals, supplements, personal care – skincare, hair care, baby care, OTC, pain management, so in all these categories, we have a different margin structure. The product pricing starts from Rs 150 and goes till Rs 1,200,” said Ahuja.
With high-priced new products and specialty drugs are hitting the market in 2015, increasing demand for new evidence and definitions of positive health outcomes are expected, which showcases a steady growth of nutrition merchandise in Indian pharmacies.
Nevertheless, with all companies that retail nutritious supplements, they too have a need to pull older items from their shelves to make way for newer incoming stock. It doesn’t matter that many of the products being pulled out are in perfect condition. This way retail pharmacy would see a striking growth ahead.