|
Computachem
|
|
|
WWW (WHO,WHAT AND WHERE) + E-VENTS In this edition we begin a series on human resources in pharmacy, focussing on staff and customers, with a deliberate skew towards that forgotten sex...males! Women are the numerical species in pharmacy. They represent at least 60% of all pharmacy graduates, 99% of pharmacy assistants and counter staff, and as a rough estimate, 80% of a pharmacy's customer base. Where have all the men gone? More importantly, why are they missing in the first instance? It is obvious that pharmacy needs to address this trend with a more equalist approach, but how? To open up the discussion, we would like to introduce a new writer to our publication, Leigh Kibby. Leigh is a corporate coach to a number of international firms and banks. He is a counsellor and mentoring specialist, a consultant for a National Men's Health project and Chair of the Rural Health Alliances-Healthier Australians Organising Committee.He brings extensive practical experience and has a broad academic background. Leigh has written "Teenagers are from Pluto" based on more than 20 years working with children, teenagers, adults and parents. In his work as a consultant, one current project includes developing a professional healthlinks network for GPs and mental health workers. The list of academic and project successes is impressive, and space does not permit a full elaboration at this time, but we can assure readers that he is well qualified to tackle male issues and illustrate thoughts and strategies that may produce a more balanced approach within Pharmacy. From the Computachem perspective, we see a golden opportunity to attract male customers through the channel of the Internet. Men like technical gadgets and new technology, and stand to become "gatekeepers" to Internet shopping, if they are encouraged. At this very moment, my wife is drafting a letter to my daughter who is based in the U.K, and I have the job of typing it and sending it. I don't know what sort of a lead time I have before she catches up. However, I have the impression that I have an advantage and appear to be in charge, at least temporarily! As usual, Rollo Manning has produced a thoughtful article for this edition, illustrating that the return for pharmacists in providing Medication Management Services under new arrangements in the PBS is not large. However, the potential it presents for pharmacists to secure a future for larger payments is huge. The money allocated in the Third Community Pharmacy Agreement is only 2 per cent of total remuneration and evaluation of the system will decide how big it should be in the future to benefit the next generation of pharmacy owners.Pharmacists with a strategic eye to the future should bookmark these comments into some form of a business plan. GST has now enveloped us and caused a great deal of extra work and concern. However, most pharmacy retailers have seemed to cope, but some systems suppliers fell down in their ability to deliver correct prices and bug-free software. As you are all fed up with GST, I have left all commentary out of this edition, but will monitor events progressively. As an aside, I went to the local supermarket for a "top up" for the weekend and spent $30. The GST component was only 60c-but maybe I was just lucky for this first time. THE RETURN IS NOT
GREAT BUT THE POTENTIAL HUGE The signs are good that pharmacists will embrace the "new
age" of providing professional medication management services and receive
payment for it through the PBS. A cynic would say they should have been
doing it earlier, without payment, to prove their value, and the size
of the reimbursement. The training for a degree in pharmacy practice should
equip a pharmacist for the task, and "medication reviewing" should be
a part on everyday practice. Despite such assertions, the next five years
(life of the Third Community Pharmacy Agreement) will be the testing time.
The $114 million, which has been set aside for the provision of "Medication
Management Services", will need to be used wisely. Data will need to be
gathered to demonstrate the value to the health care system of the services
provided by pharmacists and this especially so if the total amount is
to be increased in to the future. When said quickly the dollar value sounds
a lot, but it must be seen that using the already established "averaging"
process it only amounts to $22,800 for each of 5,000 pharmacies, or per
annum, $4,560 a pharmacy. Even more reason for the need to spend wisely.
There will be the need for administration of the system, to include training,
evaluating, and monitoring the method of claiming. It is hoped this will
be kept to a minimum and the "contracts" to provide these elements given
to the already established institutions in the field of expertise. This
could mean the Health Insurance Commission for claiming; The Australian
College of Pharmacy Practice for training; and the Schools of Pharmacy
Practice at the Universities (now conducting research) for evaluation
of the system. The major factor to be kept in mind by all pharmacy owners
is that the next five years is crucial towards a new age of delivering
pharmacy services and being reimbursed for value added services to prescribed
medication through: Medication reviews to residents of Residential Aged
Care Facilities; Patients in domiciliary care; Case discussions and care
planning; and Pharmacist facilitators in Divisions of General Practice.
While the payment in this period may not be "fair and reasonable", the
potential for the future is tremendous. Done right now and it will ensure
the next generation of pharmacy owners an earning potential based on professional
services without the need to resort to the wide range of "other retailing
activities". Planned or not, this initiative has the potential to change
pharmacy in a manner which will assist in making it immune to challenges
of "who should own" or "who should sell" from the retail/service outlets
now in the market place. The value of payments for this "new" activity
is further seen in perspective, when looked at alongside the value of
the reimbursement now being paid to pharmacists for the provision of Pharmaceutical
Benefits. This will be $5 208 million dollars over five years or $1 billion
a year. The new "fund" for Medication Management Services is thus only
2 per cent of total remuneration. No one person is going to make their
fortune from the provision of these services. It is to be hoped all pharmacists
will embrace the opportunity to show what really can be done with the
knowledge base given pharmacists and the value each can add to the medicines
they dispense. FUTURE CHANGES TO THE RETAIL LANDSCAPE As you will have noted from previous editions, we have been monitoring changes in the food industry as a pointer to how pharmacy may develop strategies to cope with future competition. Processed foods are concentrated into three major retailers, who collectively hold 83% of the Australian market. This type of concentration is unprecedented in any other country, and some analysts believe that this makes the entire industry a vulnerable target for a major global retailer. Earlier this year saw the establishment of the organisation Aldi, a German global player. Aldi is a highly secretive organisation that has successfully changed the state of play for retailing wherever it has had a presence. New store openings are imminent, the first to be established in the Guildford-Cabramatta area of western Sydney. Paul Simons, ex managing director of Woolworths and Franklins, subsequently executive chairman of Woolworths and currently a consultant to Woolworths, addressed a meeting of the Queensland Grocery Industry Association in May of this year. He made the observation that the invasion of global retailers to Australia would depend on how well Aldi performed and that players following Aldi would arrive via acquisition of Woolworths or Coles. Aldi is renowned for stripping away rebates, shelf rentals and other creative components that are a feature of retailer/manufacturer dealings, and will only deal in a basic net price, protected by a long term contract to buy. Payment is guaranteed within 10 days, which is very attractive to a manufacturer (extended credit has become an inbuilt traditional fringe benefit for Australian retailers). Paul Simons made one very important point which has significance to community pharmacies and that is that given Aldi will only stock 6-800 product lines in the very high volume area, selling at around 30% under competitors, this would leave a large niche market area for specialty retailers to spring up next door to an Aldi outlet. Further good news for pharmacy may be that to conserve on labour costs, Aldi type outlets will have restricted trading hours. This is already being demonstrated in a Franklin's copy (Cheaper Choice) recently opened in Guildford, where trading hours are 8am to 6pm Monday, Tuesday, Wednesday, Friday and Saturday, with Thursday being 8am to 8pm. Unrestricted trading hours was a predatory method used by major retailers to transfer market share from exhausted small business operators who simply did not have the resources to match. Coupled with the manipulative manner in which the majors developed creative allowances and rebates, smaller retailers simply could not compete, and the corner store disappeared. Economic rationalists would have us believe that this form of free market enterprise is of ultimate benefit to consumers by enabling a wider choice at the cheapest possible price. Well, this was dispelled recently when a call went out from the NSW Farmers Association for the NSW State Government to curb the power of the major supermarkets. In response, the NSW Agriculture Minister, Richard Amery, released figures showing the low prices paid to farmers, by supermarkets, for apples and a range of other products and compared them with the prices consumers were charged for the same produce. He found that apple growers had been paid a low 32 cents a kilogram for apples that retailed at $2.99, which represented a 1200 percent markup by the supermarkets. This type of unfair trading practice is only the tip of the iceberg and demonstrates that Australia's efforts to deal with restrictive trade practices has been a dismal failure. Aldi is about to do to the major Australian supermarkets what they in turn, did to pharmacy, circa mid 1960. Now opportunities will emerge for those who keep a strategic eye open. For Australian manufacturers who can produce competitive products, Aldi represents an opportunity for them to have a global presence. For existing full line Australian supermarkets, the survival model is already established overseas where the emphasis is on fresh produce, a potential plus for Australian growers. For Australian pharmacists, a valuable site resource opens up because Aldi will attract customer volumes but will not necessarily be stocking health and beauty products sold by traditional supermarkets. It will remain to be seen whether the rules governing approval numbers will be flexible enough to handle this shift in market movement, but given the recent past, one should not be optimistic.The need for pharmacy licencing has never really existed, and in these times, there is even less argument for retention of this restrictive system of approval numbers. The need is for larger pharmacy units with the financial and human resources to compete in the market place, with a permanent restriction on ownership, limited to pharmacists only. This is not a new concept. AUSTRALIAN GOVERNMENT ALLOWS GM CROPS Following hot on the heels of our article on transgenic crops and animals, a Federal parliamentary committee has cleared the way for genetically modified crops in Australia, but only with "stringent regulation and constant and cautious monitoring". A call for a five year moratorium was rejected. even in the face of strong concerns from the scientific community. The announcement was made at approximately the same time that genetically modified soy had been found in a Kellog's product, by an activist group known as the GeneEthics Network. It was also at a time when there was evidence of stiff consumer resistance to genetically modified foods and an overwhelming demand for strict labelling requirements. Researchers recently identified that approximately 68 percent of people are not happy about eating genetically modified foods, while 90 percent want foods containing genetically modified ingredients to be labelled as such. Approximately 45% of people do not believe that there is any real benefit at all in genetically modified food. This issue is going to touch pharmacy in many ways, including the manufacture of genetically engineered drugs, the issue of using substances such as soya oil, as a base for some products (with the potential to have high levels of herbicides), the sale of soy based milks, and as reported last edition, the production of human milk with transgenic cows for baby formulas. I have asked a small number of parents if they would consider feeding their baby with this type of milk, and I have not yet found anyone willing to try it with their own child. Labelling requirements vary from country to country. The US requires a label only if major characteristics, such as the nutrition profile, are altered. In Europe, labels are only required when genetically modified ingredients are at scientifically detectable levels, while Japan labels major ingredients, such as soy and corn, and requires labelling for other major ingredients that are likely to have been genetically modified and have not been proven otherwise. Australian labelling regulations are yet to be announced, with manufacturers being less than upfront in their acceptance of proper labelling issues. Pharmacists may identify consumer need in the sale of non genetically modified substances in nutraceuticals, invalid foods and general pharmaceuticals and develop as a niche market. Others may well find that there will be an acceptance, particularly in the medicinal area, and that a good knowledge base may assist their customers/patients to make an informed choice. WHY E-COMMERCE
WILL NOT DISAPPEAR: It is interesting to follow trends and innovation in other industries, because, quite frankly, there is little pharmacy initiative driving development of the Internet as an interactive tool to expand the health market. To see how someone else is doing it, and what level of financial commitment is being given, it was thought that comment on the General Motors project might prove of interest. The way we look at our cars is sometimes thought of in the same light as adding a new member to the family. If we are celebrating a new arrival, we may even video the event of giving birth. The analogy to General Motors marketers in giving birth to a new motor vehicle was not lost, so the concept of allowing customers to view their car as it was being manufactured, was thought to be as equally exciting and interesting as childbirth. Using a video webcam, customers are able to follow the progress of their vehicle and even change specifications along the way. It works like this: The customer goes to the GM dealer website GMbuypower.com. Here it is possible to specify options, colours and model of the vehicle required. The site will allow the customer to view their prospective purchase from all angles, and to change the colour scheme and options at the click of a mouse. After the order is placed online to a specific dealer, the details are immediately sent electronically to the factory. After a period of time (less than a week) the customer receives an e-mail with a specific time and date when they can visit the web site and watch their car take shape. The first big moment for the proud parents-to-be is when the body emerges from the paint shop. Foetal development is progressing well and everything is intact. The next e-mail designates when the interior is to be installed. We are now past mid term. The final e-mail to the nervous parents comes with detail of the delivery and how the birth can be viewed as the new arrival is driven off the assembly line. General Motors hopes to have this running smoothly by September this year and is spending enormous sums of money globally to ensure its success. Other manufacturers are monitoring events with interest and the flood of new sites promoting new car sales is sure to educate a new group of consumers into the fantasy world of the Internet. Perhaps some imaginative pharmacist may come up with something equally as stimulating to provide an impetus for pharmacy e-commerce. E-RETAILING'S SECOND STEP: Outsourcing Logistics According to Forrester Research, online retailers should adopt an outsourced logistics solution, once their shipment volumes reach 1000 units per day. This is evidently the point when the juggling of stock management and order processing begins to create a cost surge. To meet this type of problem TNT has announced a new initiative called Loop Service, where the company provides a range of modular and progressive services to include order entry, order management, transport, billing and payment processing. The system is designed to handle every part of e-commerce fulfillment, from capturing and processing a customer's online order, to warehousing product, issuing invoices electronically and delivering orders through couriers and international transport networks. This type of integrated, paperless fulfillment system enables small business to compete with the big end of town. It will be of particular importance if a business wishes to become global. A competitor to TNT, GlobalFulfillment, is already taking orders in 160 currencies and distributes CD music through 22 global distribution centres on behalf of Coles-Myer (MusicNOW and Sanity.com), which illustrates the potential for any Internet business to become a global player, provided all elements of a good e-business management system are in place. RETAIL MARKETING STRATEGY AND BANKS In the popularity stakes, banks would probably rank lower than the GST. Rural communities have been forced to their knees because major banks have abandoned their towns and regions, and are still closing in large numbers due to amalgamations and rationalisations. We are told that even though these branches were still viable and profitable, the return on investment was simply not high enough to present to shareholders. The "social conscience" of banks is appalling, and the needs of the majority of customers are brutally ignored in the incessant pursuit of higher profits and shareholder dividends. We were told that deregulation would provide greater benefits and more competition, resulting in a more efficient and cheaper banking system. How could the regulators be so wrong? Looking at the global picture it is readily seen that Australia needs to have strong banks to offer any competition to the really big international banks. But should this have been allowed without offering an alternative to those local communities left to wither on the vine? Even less choice is available with the recent takeover of Colonial State Bank by the Commonwealth Bank. However, in a recent announcement, Elder's have announced plans to establish a chain of banks through its extensive rural network, which should provide much needed relief for the rural sector and fill many gaps. From a retail perspective, banks have always influenced trading patterns. It was once regarded as very poor planning if you set up a shopfront next to a bank, because it interrupted the traffic flow up and down a shopping strip. Then banks began to compete with a range of identifiable consumer products and added to the shopping experience, enhancing the traffic flow and becoming an integral part of local commerce. Recognising this pattern, a number of retailers offered bank agency services. I was one of these retailers, and I soon found that pharmacy was a respected environment to carry out a confidential activity of this nature. Banks offered substantial commissions to open new accounts, but very meagre payments on the daily deposits and withdrawals. In my mind, there was only one direction if the bank agency was to pay its way, and that was to sign up new customers. To do this, I gave away free bank accounts with a $10 initial deposit. These accounts were used as prizes for the local school athletics and sporting events, they were given on major promotional days to allow customers to extend their budget (spend $50 and get a $10 refund in a bank account), and as a result, my first month's commission cheque was $5500. This happened 15 years ago. It was very noticeable that once the service was established, customers came into the pharmacy, transacted their business and then proceeded to leave prescriptions for dispensing and moved on to spend part of their withdrawals in the pharmacy. My turnover growth percentage surged to a 40% increase in the first year of operation, and banking provided much of the impetus for this growth. Today, we are seeing a similar process occurring through an alliance between Woolworths and the Commonwealth Bank. A Woolworths-only product called Ezibank has been rolled out across Australia. Accounts established through this system are fee free, and the first promotion for customers was a free $10 bank account. The point of this story is that Woolworths are doing the job very professionally, and if history repeats itself, they may gain a 40% increase in their sales in the first 12 months. This is also coupled with an "award point" loyalty scheme which will anchor customers more permanently to their environment and enable Woolworths to continue expansion of their product range, to extend the convenience factor. Part of this extension will be traditional pharmacy products, and as this level of competition increases, pharmacy sales will suffer. The Pharmacy Guild have been investigating the establishment of branches and agencies of a preferred bank within the community pharmacy structure. It would appear that they have not been quick enough, giving Woolworths the edge. There are only so many new accounts a customer is prepared to open, and first cab off the rank is the clear winner in this form of marketing. Can I help you sir? By Leigh Kibby "I was wandering around the Chemist, looking for something to ease my piles when a 16 year old girl, with a stud through her nose and glitter in her hair, stopped in front of me and, smilingly asked, Can I help you sir?" I smiled, this was Stan's story. "What do you do?" he asked sheepishly for an executive of 40 something years, four children and the hero of countless staff insurrections and management border wars. "Buy a Panadol," I suggested. Stan's grimace explains why so many men buy Panadol or aspirin, or even leave the chemist as a shamefaced or recalcitrant and uncommunicative customer whilst, in the background, the young girl exclaims "Men!" to the knowing nods of women customers. Just imagine Stan's reaction had he been wanting condoms or, even worse, to fill his Viagra prescription (the getting of the prescription is another story within itself). Stan is not alone in his fear, discomfort and outright reluctance to enter the women's realm of pharmacies and retail. His story, though somewhat stereotypic, is the story of many men. The answer, also stereotypical, is to first understand men. To understand the problem men face in chemists, with women and with intimacy, you first need to understand what it is like having a man's experience and then what it is like being a man Men are not, by experience and perhaps inclination, inclined to discuss bodily functions past who "copped a thigh" during the football on the weekend. We are not trained to be comfortable with self-disclosure, especially if it is to unknown women and, worse, to young girls. So, how do men face the world and women when they must confront issues that are foreign to them, frightening or just simply uncomfortable? To do these things, requires being practiced in skills and situations for which they have no experience and even less training. No wonder they often respond with anger or avoidance. Men are not "socialised" into the process of self revelation and have not had the years of practice women have had with revealing biological intimacies, since the age of the pill and in the obvious openness of childbirth. In twenty years time, when the eventual momentum of social change rolls over us and we become fully "snagged", these issues will not matter. To our sons, a young girl asking "Can I help you?" will provide opportunities only they can imagine and we would like to remember. Until then, perhaps we need another man who looks a bit like us, acts like something between a corporate exec and bricky's labourer and asks "What's the problem?" whilst we both quietly face the corner where no-one can see or hear us. The comments and views expressed in the above article are those of the author and no other. The author welcomes any comment and interaction that may result from this and future articles, and can be contacted directly by e-mail at leigh@kinematic.com . Alternatively, the editor would be pleased to publish any responses directed to neilj@computachem.com.au . CYBERPHOBIA FOOTNOTE: A variant strain of Male Menopause? An additional male stress factor has begun to emerge. Apart
from being isolated from the pharmacy shopping experience, one segment
of the male workforce is experiencing the pressure to survive. It is age
related and perhaps there are too few males left in pharmacy to be concerned.
The following report has been extracted from Wired Magazine: Editor's Note: I am wondering where I go to from here? * Don't forget to advise of any
change in your e-mail address so that your subscription may be continued
without interruption.
|