Future of Pharmacy Business?

With digital development, every industry faces certain transformation. In some cases this transformation is radical and the changes are disruptive, in other cases it is rather mild. How can digital transformation effect such industry as pharmacies? For last several decades major sales channel for pharmaceuticals has been offline retail, therefore one might think that pharmacies don’t face as much disruption as other industries, but in fact, there are at least 3 directions, which are affected by customers turning to digital.

Digital provides choice and multi-screening and multi-selection

By growing their own private label brands, pharmacies implement vertical integration and become their own suppliers

Users get to choose more products from a larger amount of retailers at the same time. How does this impact pharmacy development? Given price comparison possibilities, pharmacies are intrigued to start producing private label drugs, because this allows them to control the product price/quality and end-customers cannot directly compare products which they cannot find in other pharmacies. By growing their own private label brands pharmacies implement vertical integration and become their own suppliers. A great example of this is Walgreens Boots Alliance – health and well-being enterprise, which is led by a pharmacy chain, that has expanded its private label by providing low price vitamins, grocery products, lubricants, ovulation predictors and tons of other health related products. Because of these strategic decisions WBA managed to sustain steady revenue and earnings per share growth in last 10 years and was able to increase the revenue twice from 53 bln. to 117 bln. USD.

At the same time medicine suppliers see this pharmacy activity as hostile and try preventing it. These pharmaceutical brands join e-shops on top of staying offline in the retails. Just on Amazon one can find hundreds of thousands of different health supplement products. All of these products have chosen either online-only presence, or an option, where they are both in retail pharmacies, grocery stores and on Amazon.

Such brands also try growing brand loyalty by promoting health related projects and by associating their brand with healthy living. This enables them to grow and control new online sales channels. Because of that former business partners are becoming direct competitors.

Pricing strategies and product leasing or investment fund

There is no such loyalty as a loyalty for which you have been paying your whole life

By spending only as little as 1-5 Eur per month you might build a fund for your baby right in the pharmacy chain, where you might spend the invested money with interest on the right products with special discounts only for you. Creating such programs would build up true loyalty among pharmacy clients, because there is no such loyalty as a loyalty for which you have been paying your whole life. Another strategy which pharmacies could also implement is product leasing. They can cooperate with the banks to insurance companies to reduce the risk, but in general leasing would allow them sell products in larger volume with 0 interest rate and let clients pay in even parts every month. This would make your personal health-bill similar to phone-bill, where you spend 10 Eur/month to have a worry-free month. And if you paid-up all your health-bills, you can continue paying the money to the pharmacy to fill up your health investment fund and get larger discounts at the pharmacy for the products that are tailored special for you.

Data driven subscription

Remember the Dollar Shave Club? Why can’t there be a Diapers Club?

Pharmacies know your purchasing habits. They hand out you loyalty cards and know which non-prescription products you buy and how often you do that. This opens up new possibilities for pharmacies. They can and should implement subscription based model for the routine purchases. Remember the Dollar Shave Club?

Why can’t there be a Diapers Club? Or Toothpaste Club? Charging 1 or 2 Eur per week for a private label toothpaste is not a hassle. Plus you get to remind your client about your brand 24/7 for Free. Ideally pharmacies should suggest you opting in to the program right at the moment when you realize that you might need the service. Data, used wisely, can help pharmacies come closer to our doorsteps without opening new locations.

These are only a few directions, which future pharmacies can take in order to grow further. All of them require pharmacies to focus less on being a shop-like place and turning more into a banking or insurance-like institution. In the end, they are selling a feeling of security, and this can be turned from a one-time interaction to a regular subscription.

Digital Marketing Trends for 2016

Usually when agencies think of digital trends for 2016, they try to think of one or two products that either just came out, or will soon come out, and based on that try predicting marketing strategies. Thus, more or less, all trends spin around those products.

So what are the trends and predictions for 2016?

The one, currently most talked about, is content marketing. Does it mean that content is the new king? Just like it was in 2012? Not really. Approach today is different – latest iPhone/iOS with enabled Adblock functionality poses some threat to advertisers, so they try to figure out a work-around. And the work-around is something that anyone who has ever written a good paper would give you – do not “copy/paste”, bring your own ideas, provide your own insights. And of course you can spend 10-20 k Euros and ask a portal to write a series of articles about your market niche with rare mentions of your brand. This is how content marketing will roll for 2016. Case closed.

Second trend is marketing automation and simplification. Do you remember days when you had to use tools like Hootsuite or Sprout Social to manage your multiple social media accounts because this was the only proper way to set the time when you wanted your posts to appear? Well those days are gone. Every single sales channel is implementing advanced automation. Examples follow:

E-mail: with GetResponse or Aweber you can get yourself a beautiful and simple landing page which will collect you leads and start your automated marketing campaign – sometimes successful, sometimes not that much.

On top of that you can also try converting your users via retargeting, or remarketing (Google created term) or remessaging (Microsoft created term) automation.

All you need is simple scripts added to your site and logic for setting the automation rules such as show ads supper frequently first day, less frequently on day 2 and stop showing ads on day 5 if the user doesn’t come to site anymore – ofc. this is a super basic example. Key takeaway is that retargeting today is so easy and useful that if you don’t do it, you are living in 2005.

Slightly more advanced automation is brought by Google – AdWords automation scripts.

If you have at least minimal understanding of Javascript, you can set a sales countdown and show your text ads with a countdown to increase the feeling of urgency. Or if you want, you can set your ads appear only when certain weather conditions happen. Or if you are a local restaurant, you can promote only the lunch menu during the certain hours of the day. Once again, these scripts vary from super simple to quite advanced, but all require only one thing – understanding the logic of your own marketing campaign.

Why did I also highlight simplification? Because the key role of Google and Facebook advertising tools is to make Digital Advertising stupid simple so that even your grandfather could use it.

Advanced Facebook users will use Power Editor, but in most of cases simple corner business will just “boost posts” and still will have some results. Same is with AdWords – if you are completely clueless in Digital, but still want to try it out because everyone is doing it, you can try AdWords Express – a solution ignored by anyone, who has more than average understanding in AdWords. Do you want to make yourself some banners but don’t want to pay designers? Go for AdWords inside tool which will scan your site and will auto-generate banners.

 

You cannot make advertising more simple, unless… you get to be asked by Google if you wanted that sale to happen while lying on the beach at the same time. But let’s leave this level of laziness to the year 2021 🙂

Third trend is user buying. We don’t want to buy “hypothetical” website visitors. We still care about the affinity audiences, but not that that much anymore. What we really want is that 27 year old 4 month pregnant woman who just went to Star Wars and found out that she will have a boy.

I call it buying real users, not audiences. As Digital Marketing grows easier every day and more local businesses start trying it, they for sure have no 10.000 € month to spend on great YouTube/ GDN/ Search/ Facebook mix because simply this is all their monthly income. But no worries. The beauty of buying users is that you can have results even with lower budgets. Just know your user. If you are a corner-store, talk to your customers: find out what they like, what music they listen, where do they go for holiday, how old their kids are and where does their husband/wife work. All this will help you map the connections between your current and future customers. Get yourself a website and add Google Analytics/Google AdWords remarketing, Facebook pixel and start building your user lists.

Ask your actual customers for their emails and add them to Google/Facebook audiences. Use Google Analytics custom metrics and assign values that Analytics misses – e.g. user gender. How can you do it? Use URL builders and tag your Facebook/email campaigns properly and import the properties via Google Analytics.

Fourth trend is Virtual Reality. This one is the most beautiful and most promising of them all. I have been craving for it and talking about the potential that VR brings since middle 2014 and now I feel even stronger about it.

In next few months Oculus (owned by Facebook) will release its Oculus Rift. Previously released Galaxy Gear VR (also a product of Oculus) has already topped the Christmas wish-lists for kids, sharing the spot with BB8 Droid from Star Wars.

Key takeaway for anyone reading this post is that VR is going to be as popular topic in major Digital conferences as Big Data used to be two years ago.

For advertisers this brings new level of creativity, placements and new ad formats. For users this brings new and different level of engagement with the ads and content. You will hear about new and great experiences created by automotive industry or travel agencies to test-drive the products. Real estate companies will be one of the first ones trying to virtualize the user experience and create virtual tours in soon-to-be your homes.

And you will try it yourself, and You will enjoy it. And then You will think of how to reach the users in Virtual Reality, because this is where they will be spending their time and money 2-3 years from now.

Google Shopping Insights

Google has just released a completely new product, which will be extremely useful for anyone, selling things. It shows the heat maps – where and when are the customers interested in your products. The sad part is that for now the product is in Beta and shows only the data from United States. Still, Shopping Insights breaks down search data by products, cities, and devices, and illustrates it in heat maps. It also shows data from cities targeted by AdWords, and categorizes searches by devices, which is helpful for fine-tuning online campaigns.
Google says that even though 87 percent of shoppers research products online, the majority – 92 percent – of purchases are still done at brick-and-mortar stores. For this previously Google has developed the concept of ROPO (Research Online, Purchase offline).
shopping with googleShopping Insights can help retailers plan what to stock in different locations by showing them which items are trending by city.

Shopping Insights works best when tracking major trends. The beta version currently includes data for the 5,000 most popular products on Google Shopping between April 2014 and September 2015 (these include gaming consoles, Birkenstock sandals, Disney Vans, and emoji joggers, which were endemic in New York City last year but mercifully have yet to invade the West Coast, at least according to Shopping Insights).

While that should cover most holiday shopping lists, it means Shopping Insights still isn’t particularly helpful for sellers of products that are considered relatively niche but still in demand, especially as gifts (like the limited edition sets many cosmetic companies put out for the holidays). Furthermore, while Shopping Insights can give businesses a sense of what their customers are interested in, it still can’t predict what they will actually buy. Retailers will have to continue relying on their own analysis and guesswork for that.

TEDx Presentation on Artificial You

Several months ago I delivered a TEDx presentation on Artificial You and your Artificial friends. The presentation had great interest amongst the listeners. Therefore I’m sharing both the speach itself and the video to it.

TEDx Aurimas Paulius Gircys

All my life I have been passionate about digital. Now I live my life building online customer paths, helping my clients sell cars, houses and smartphones. Whenever I have a chance, I share this experience with my university students or in international conferences.
Both as an advertiser and a professor I notice how much potential there is in technology. It allows me to deliver an exam online and enables me relax on the beach instead of grading the tests. They are being graded by themselves. 🙂 At the same time I can pop up my phone and have a Skype-call with my brother who stays in Germany. I can run a Hangout and post it on YouTube instead of coming to the lecture. And this is what I did last year, when I left to Mobile World Congress. I created a YouTube video explaining the topic of my class and the students could watch it whenever they wanted. To be honest, the video attendance was 120%, because some students watched it several times. Technology is enabling. It enables us to have access to all the great minds and ideas around the world and at the same time spend that time playing Clash of Clans. It allows us do fact checks – for example, I will be talking about Turing Test and you can do a fact check, if I made a mistake. This is the reason why I never force my students to put the phones into pockets or close their laptop lids. Technology is enabling. It enables us to make our own life so much easier. It also enables us care more about our family members. For example, a friend of mine has a child and he always does Facebook check on the parents of his child’s friends. Sounds creepy 🙂 ? He wants his kid to grow and develop. In fact I think that he would prefer buying friends for his child. He believes that he would help a child develop and make better decisions in future. What if this friend is artificial? A robot so to say that helps your child develop skills that one will need in future? Would you buy a friend who would help you get better at Tennis or Math? I would 🙂

In fact, the only scary thing about this idea is that this friend is artificial. But what if you could not distinguish a real human from an artificial. In fact this is already done. A Turing test – ultimate test to identify a program from a human was passed this year and a program was so great at answering all the questions that the group of experts could not distinguish it from a 13 year old boy. Turing test was passed. It means that artificial intelligence is so advanced that programs can now become your classmates.

This brings so much potential. It means that eventually even in your virtual study classes You will be collaborating not only with other humans, but also with programs, who will try to cheat, will want to be your friends and will have great goals for their lives. Currently if You take classes at Coursera you get to collaborate with people from all around the world. I took one class myself and I was so amazed with the scope and magnitude – 700 teams with 5 people per team developing business ideas. This is such a Think Tank! And with artificial classmates you can have all this on every possible topic starting from business strategy and ending with cooking. I don’t have to grade the exams anymore, so to be honest I don’t mind if I have 200 or 7000 students in my virtual class. And if I do a bad job, I can be replaced with an artificial better me.
This brings so much potential and greatness. For example there is a chance that some of us would not have gotten admitted to university because a superior program student would have better grades. Are you prepared to share your classrooms with virtual students? What if you failed exams because artificial students would study more? Will you care and be digitofobic, or will you embrace the potential?

You won’t need old school communication. Facebook and Snapchat will look as ancient as Egyptian pyramids look today. And that’s fine because your friends and student colleagues will be replaced by algorithms anyway. And not only friends, but also employees and employers. Currently it is still a moonshot away, but algorithms are already in our daily use. How do you know if a letter you received was written by a person or an algorithm? Currently there is both primitive random text generation software and advanced versions that help you write content using special keywords. Most of such software is used to create dummy websites with loads of banners. They have a single purpose – make sure that You find them on search engine and visit the site. But if applied in studies and created by artificial intelligence such papers have a potential of being more unique than anything that we create.
In advertising we already use event based advertising automation. For example right now one campaign is waiting for weather to reach 30 degrees and then it will suggest ice-cream on Facebook. Another client is waiting for snow and will announce instant sale. It doesn’t matter if it snows in December or Tomorrow. Such automation replaces human factor not only in advertising, but also in social conversations. How many of You really know whether somebody retweeting your tweet is a human or a bot? You don’t care, thus your everyday social conversations can be replaced with algorithms and your actions can be observed by agents in order to simulate your conversation and actions while you are outside on the beach. For example last year I spent two weeks actively engaging in social network discussions while at the same time being without Internet on an island in Greece. All due to automation and agents, that observed my behavior and learned from it in order to behave like I would. In fact there is a solution, called LivesOn, which detects that You might be dead and starts Tweeting on your behalf in order to sustain your Digital Afterlife. Scary, right..? One day you might be dead and your friends won’t even notice.
But the beauty of it lies in the potential. Would You pay for a computer program that would take your classes and pass exams while you went skiing or snowboarding? I would.
Problem is that if you miss the classes and skip all the boring things that You do while studying, your friends might chose to invite a computer program to their birthday instead of You. Because the program was the one that cheated together on the exam of law and the program was the one that sent this automated, but very unique birthday text, while You were snowboarding.