MAY,Edition # 25, 2001

Recently, there have been two new online arrivals to the Internet Pharmacy line-up that look as though they have the expertise and backup to take on the established operators, particularly Pharmacy Direct.
The new arrivals are Chemistop (http://www.chemistop.com.au) and Ozepharmacy (http://www.ozepharmacy.com.au).

The most flamboyant of the new operators is without a doubt 24 year old Damien Gance, who, with the obvious support and resources of his well known pharmacist parents, has established an online extension to two "bricks and mortar" Chemistop pharmacies located at Footscray and Dandenong, in Victoria.
The new site is of unusual design and features strong colours, particularly yellow, red and blue. This contrasts sharply with established online operators who have generally favoured recessive colours in blues, greens or light shades of beige.
The strong colours appear to form part of a deliberate marketing psychology to promote the concept of "cheapness". It is a long-established marketing fact that the colour yellow is associated with cheaper prices, and for this reason is used to highlight shelf talkers, bin cards, posters etc. in a retail environment. The brighter the yellow and the total area of advertising material covered with yellow, tends to be directly proportional to the cheapness of the product advertised.
The colour scheme has been successfully utilised by major retailers other than pharmacies, and also includes one of Australia's successful marketing franchises, AMCAL.
In associating the colour yellow with a brand image (as distinct from merchandising materials), care has to be taken that it does not dominate, as the entire image, including whatever elements of professional services are involved, will be one of cheapness.
AMCAL has successfully avoided "cheapness" of image, but Chemistop has moved out to embrace it.

When you endeavour to access the Chemistop site, there is a slight delay before you are redirected to the "home" page. This involves an unusual "sliding" effect possibly designed to attract attention, but may also involve some of the security aspects of the site design. You do, however, lose the browser "back" button and tool bar, which may inhibit navigation slightly, but other navigation elements offset this loss.
It is definitely different.
You are then confronted with a photograph of Damien (but his name is not evident until you search the remainder of the site) coupled with a flashing sign asking; " Is this Australia's cheapest chemist".
There is some ambiguity at this point. He is not stating he is Australia's cheapest chemist, because a quick survey of competitor sites would disprove such a claim immediately, and would not make the Australian Competition and Consumer Commission (ACCC) very happy. There is no question mark after the statement and the statement flashes in two parts....."Is this Australia's", and then....."cheapest chemist" creates an unusual impression which you would have to view personally to gain the full import.
There may be an error in marketing psychology here, in an attempt to give the perception of absolute cheapest prices.

On a separate page of the site (in the "About Us" section) is a statement that may eventually need modification. It reads:
"Our promise to you is that, at Chemistop, you will always pay less and you will invariably receive the highest standard of personal service and professional advice".

Damien has obviously spent a lot of money with an advertising and public relations agency, for he has secured some high profile exposure, appearing on the Channel Nine show " A Current Affair", various media interviews, plus display advertising in newspapers, including rural newspapers.

The site is under continuing construction, and for the moment, information content is limited. A profile form has to be completed by a customer/patient if medicines are required, and there does seem to be a strong effort in the fulfillment of orders.
For the moment the site simply represents:
.....Product..Price....And where you get it!........... in very strong terms.
These are the basic elements of retailing, and when coupled with a "cheap price" approach, means that Damian is committed to the high volume, low margin end of the business. The brief survey that we conducted with other major online pharmacies (illustrated further down this article) indicates that Chemistop has a little more homework to do with their prices.
Otherwise, with a little tidying up and a close watch on overheads, Chemistop seems destined to join the ranks of successful online pharmacy operators in Australia.

The other newcomer mentioned is Ozepharmacy, which appears to be based in Sydney. It has a vision of becoming a national and international operator and uses a more low key description of "affordable" prices rather than cheapest or lowest. The site is well designed and easily navigated, although the colour combination used makes the navigation text a little hard to read.
No information is given on the site as to who actually owns it and I have not seen any major advertising or public relations campaign surrounding its launch.
However, it has the "feel" of a major operator because of the attention given to the design and detail of the site. Coupled with a good marketing campaign, I think we can safely say we have another major player about to throw his/her hat in the ring.

As mentioned earlier, a brief survey of a basket of goods was conducted by accessing the better known online pharmacy sites and checking prices.
The survey was conducted on Saturday, 28th April, 2001.
The results are shown in the following table:

PRODUCT	PHARMACY DIRECT	PHARMACY ONLINE	E-PHARMACY	CHEMISTOP	OZEPHARMACY
ZOVIRAX CREAM	$8.95	$8.95	$9.95	$14.00	$10.95
ZYRTEC 30	$14.95	$20.30	$18.75	$19.90	$19.95
PANADOL CAPLETS 24	$3.30	$3.25	$3.50	$4.10	$2.65
CLARATYNE 10	$7.95	$6.50	$7.95	$11.85	$7.95
CLARATYNE 30	$19.95	$19.95	$19.95	$19.90	$19.95
BASKET TOTALS	$55.10	$58.95	$60.10	$69.75	$61.45

Although the above sample is not a large one in respect of product range, the products selected are common choices for online shoppers.
It is clear that Chemistop is not the cheapest of the online pharmacies, and is in fact is 27 percent more expensive than the cheapest site, which is Pharmacy Direct. Excluding Chemistop, the next most expensive online site was the newcomer Ozepharmacy, which was still 13.5 percent less expensive than Chemistop.

It is pleasing to see the online pharmacy market slowly expanding, and doing so in an orderly and ethical manner. There is little to choose between the above sites in basic approach and presentation, and while the initial entrant into the mail-order/online environment, Pharmacy Direct, is still a clear leader in terms of sales volume, the stage is set to narrow the lead as all contenders develop new marketing methods and ethically compete. The tumult that was visited on Pharmacy Direct by sectors of official pharmacy, has not affected progress.
The site has taken on a more efficient design and aspect, and is heading towards being in a position to compete in the international arena, as the opportunity presents.
The Pharmacy Guild is still very quiet in the e-commerce field, in terms of letting members know what their future plans may involve.
What is the big secret?
Surely this is an area which, if thrown open to debate, would allow a range of creative ideas to develop. E-commerce is not just retailing on the Internet.
It involves a whole range of systems and processes, ranging from financial, inventory management, information sharing, records filing, interfacing with government agencies, networking among members....the processes are only limited by the constraints of imagination. Those with little imagination are unable to see potential and make this new technology work for them.
Last time we communicated and asked the Pharmacy Guild about e-commerce (November 2000), we got the following response (see newsletter edition #18):

"Editor:
* When will the Guild enter e-commerce, rather than debate the need for such a move?

[Kos Sclavos]
The Guild is in e-commerce up to our necks. Can't show our hand yet because as you know 95% of e-commerce ventures to date have failed.
Source (Time Magazine Sept 00)"

Surely enough time has elapsed to formulate some plans for membership appraisal, or is it the intent that whatever is coming is to be forced on members from the "top down". As we have previously pointed out on many occasions, a "bottom up" approach is required on a broad base.
It is not an expensive process to embrace new ideas, and ideas cannot fail until they are tested. They are less likely to fail if they have membership input and approval.
While official pharmacy is unable to come forward with a clear vision and a plan for development, they are holding the entire practice of pharmacy in suspended animation. Some pharmacists will clearly break the mould and run the gauntlet of official criticism, but surely there is enough evidence from the retail online sector (as listed above), to illustrate that a planned online entry can be successful in Australia. We do not have to measure ourselves by yardsticks created by international startups, who saw a quick dollar, and failed.

While retailing and the marketing of services will always remain a primary focus for community pharmacists, they can begin their venture into e-commerce by starting internally to link as many operating systems as possible.
For example, are you doing your banking online, paying your bills online, using your email as a business tool, accessing drug information databases online, using the Internet for storage and retrieval of business data and developing the Internet as a learning/education tool.
Even if you wish to enter retailing you do not have to emulate Pharmacy Direct.
At this moment, Computachem Services is gearing up to provide a range of boutique, customer-interactive sites that enable services and products to be sold via the Internet, based on a regional approach to a catchment area, rather than a national approach.
By this method you can offer something that the major retail sites are unable or are unwilling to offer, yet still have a facility that provides the convenience of a major retail site. Further, you are able to build on these boutique-type sites and add a full scale national discount operation at any future date of your choosing. More pertinently, you position yourself so that you can actively compete with the online operators if pressure dictates, and you can do it progressively rather than in panic.
To acquire expertise in developing suitable websites and preparing niche market plans that work, does need time. You must be prepared to accept the possibility of partial failure along the way to win through to eventual success.
There is only one way to find out.
Make a commitment to start!
Ends

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