Does front of shop sales provide an opportunity for growth?

For 1 in 3 pharmacies, front of shop sales currently only represents 10%, or less, of sales. About half (53%) of this is for OTC medicines, and this percentage remains roughly the same, irrespective of whether the pharmacy receives a visit from a sales representative.

For almost half of pharmacies (45%), the OTC business has remained static over the last 3 years. 1 in 5 say their OTC business has declined over the last 3 years. Independents and small chains are most affected, with 70% and 78% respectively reporting static or declining business over the last 3 years.

The drive for front of shop growth is coming from the smaller chains, with 80% of small chains keen to reverse this declining trend. This is especially the case for more experienced pharmacists who are more likely to be owners/managers of their own chains, and therefore in charge of their own destiny.

What role do manufacturers have to play?

Over 75% of pharmacies believe OTC manufacture sales representatives can help increase front of shop sales. Those interested in driving growth in OTC sales are older owners, and tend to be based in towns or suburban locations. 84% of pharmacies believe that regular sales representative visits increase sales, predictably this is strongest amongst the smaller chains where representative access is easier.

Despite the belief in the value of sales representative calls, only 42% of pharmacies claim to receive regular sales representative visits, rising to 67% reflecting the relative ease of access to these smaller accounts.

Pharmacist’s views of manufacturers vary widely. Ratings of performance for OTC manufacturers range from 36% rated ‘not very good’/‘poor’ for one company, to 65% rated ‘excellent’/‘very good’ for another.

Overall, more than 60% of pharmacies report a decline in the frequency of sales representative visits over the last 3 years – this is in line with the cut backs made by a number of key manufacturers. The figures rise to almost 70% in the pharmacies most interested in driving front of shop sales.

74% of pharmacies most interested in driving front of shop sales would like more representative visits, underlining the need for support in pharmacy.

What support is required?

The top 3 areas of support expected from a sales representative include product knowledge, promotions/offers, and point of sales material – followed closely by category training.

In terms of the type of business support required, pharmacists rank shelf planning, business planning, and point of sale support as the top 3, closely followed by merchandising advice and interpersonal skills.

How does a digital solution fit in with pharmacy support requirements?

Of those pharmacies receiving regular sales representative visits, almost 60% think a digital solution could replace most of the functions of a sales representative. This was highest amongst the younger pharmacists, where almost 1 in 3 were in favour of a digital solution to replace a sales representative.

When asked what a digital solution should include, functions predictably included, product knowledge and training, but also interestingly, help/support in marketing their pharmacy to their customers in the local community. For those pharmacists most keen to grow their front of shop business, well over 40% expressed an interest in a service to help market their pharmacy within their local community.

When asked to rank the importance of various services provided to pharmacy, product information and a service to help market their pharmacy in the community ranked the highest, even above the provision of learning or ordering support.

 83% of pharmacists stated they were very likely or likely to use a digital solution as an alternative to sales representative visits, with almost 50% of pharmacies saying they would use a digital solution up to a few times a week.

Almost 75% of pharmacies, who already have sales representative visits, would be interested in a digital solution which was shared across a number of manufacturers.

Accessing a digital solution

Almost 60% of pharmacies would expect to access a digital solution via the pharmacy computer, with a high level of interest amongst younger pharmacists to access such a platform via tablet/mobile devices.

How is the provision of training changing?

60% of training is still conducted exclusively or mostly in traditional paper based form, with only 17% being conducted exclusively through digital channels. The larger pharmacy chains and major multiples are more likely to be receiving mostly digital training, whilst single outlet independents are most likely to be receiving exclusively paper-based training.

55% of CPD training is completed all, or mostly at work, with only 2% exclusively completing this at home. Over 1/3 view training as a combined work and home activity. Perhaps not surprisingly, the large pharmacy chains are likely to see training as mostly a work based activity.

How do pharmacists view their future?

In term of the future, NHS funding ranks the highest in terms of strategic issues facing pharmacy, followed by job security, workload and stress, all of which are related to the uncertainty created by the impending government cuts.

So what is the way forward?

It is clear from the findings that there is an opportunity to develop the front of shop sales in response to pressure on prescription income due to the NHS cuts. In order to achieve this, pharmacy is looking for help and support from industry. Support, not only in terms of traditional ‘inward focused’ disciplines of product knowledge, staff training, point of sales and promotions, but also importantly pharmacy has recognised the need for more ‘outward focused’ business building and consumer focused activities of promoting their services within their local community.

Whilst sales representatives can continue to provide the traditional services, they will remain an expensive resource and one that will continue to come under scrutiny from corporate and financial analysts. In addition, sales representatives are not trained or equipped, to provide other support services required by pharmacists in this growing digital environment.

The findings from this survey show that the provision of a digital solution to support pharmacy would be welcomed by the profession, especially by those already focused on front of shop and OTC sales to drive the future growth of their business.

For a copy of the full report please contact Ellie Hughes at Precision Marketing Group.

Ellie Hughes

Director of Client Services