By now every pharmacy owner knows it takes a lot more than dispensing medications to sustain your business. Increasing vertical integration and sky-rocketing DIR fees are forcing pharmacies to pivot to alternative revenue streams.
If your pharmacy isn’t providing unique service offerings or keeping up with industry trends, your business could risk falling behind.
But before you choose which niche (or niches) you want to specialize in, it’s a good idea to think through what will work for your pharmacy.
1. Consider: The demographics in your area
When you’re ready to implement a new niche program or service, think about what kind of patients make up your community and what they need. You can carve out a niche for yourself by catering to a specific demographic that may be underserved.
The retailer Lefty’s caters to a demographic of left-handed people. Left-handed people make up 10 percent of the population, and most items are made with right-handed people in mind. Lefty’s stepped in to serve this long-ignored niche by selling office supplies and kitchen items designed for left-handed people.
In order to take advantage of a demographic niche, consider who’s shopping at your pharmacy, then decipher what those patients want and need.
For example, before you implement a medication management program at your pharmacy, you should consider whether your most populous patients are the elderly.
If your most loyal patients are millennials, you may want to implement a different niche service, such as focusing your efforts on becoming a health resource center or becoming an expert in preventive care.
Also consider what population isn’t currently having their needs met. If you have a large population of diabetic patients in your community, but no other pharmacy offers diabetes management, you have a chance to step in and serve those unmet needs.
2. Consider: The buying habits of your current patients
Monitoring your patients’ buying habits can help you best determine which new niche service to introduce at your independent community pharmacy.
The bakery Milk Bar made its name by flavoring its sweet treat with cereal milk. But because more and more of their customers have gone gluten-free for health reasons, they created all their classic menu items without the gluten. By not limiting their gluten-free selection to a single cookie or cake, they capture more business from their gluten-free customers.
If you notice an uptick in interest for a certain product category, you may be able to create a niche by expanding that category. For example, if vitamin sales are on the rise, you can make your pharmacy a hub for supplements.
3. Consider: Industry trends
Not only should you consider your local patients’ interests but also nationwide industry trends.
Even before the pandemic, more people were working remotely, and for co-workers who needed to be in constant communication, email wasn’t cutting it. Slack stepped up and took advantage of the trend of remote work and provided an alternative communication method, one that was instantaneous and made it simple for groups of people to collaborate.
To stay on top of what’s trending in independent pharmacy, you can:
- Attend continuing education seminars or networking events
- Subscribe to newsletters
- Watch webinars
- Attend conferences
- Follow social media
4. Consider: The competition
Before implementing a new service or niche program at your pharmacy, it’s wise to examine what your competitors are doing.
These days, if someone is looking for a specific book, they’ll probably go to a giant retailer like Amazon or Barnes & Noble. But even with stiff competition, Powell’s City of Books in Portland, Oregon, has still managed to make a mark. Instead of focusing on the product, it has styled itself as a book-lovers bookstore, with a giant collection of both new and used books and frequent discussions about books and the publishing industry.
You, too, are in a crowded industry that gives your patients many different options. That’s why it’s critical to pay attention to what your competition is doing well, because you may be able to do the same things successfully.
Also pay attention to what they aren’t doing, or what they are struggling with. You may be able to swoop in and provide a much-needed new service or improve upon a service your competitor offers.
As a small operation, you also have an advantage over your chain store competition, as you can implement a new niche quickly, while they have to run the idea through many levels of management and take the time to roll things out to hundreds of stores.
5. Consider: Your business
Your patients are always top-of-mind when you’re focusing on running your pharmacy, but it’s important to take your business into consideration, too. Before implementing a new program or service, look at your financials to determine if you can afford it — and if you can afford to do it well.
When Google introduced Google Glass, it was supposed to revolutionize the way people interacted with their environment. But it was too expensive, didn’t work the way it was supposed to, and brought up serious privacy issues. Ultimately, Google scrapped the project.
You should also consider the health and wellness of your employees when implementing a new niche. If it’s going to increase people’s workloads and require them to learn skills outside of their comfort zone, you could wreak havoc on the business by adding additional stress or causing unnecessary employee turnover.
A Member-Owned Company Serving Independent Pharmacies
PBA Health is dedicated to helping independent pharmacies reach their full potential on the buy-side of their business. Founded and run by pharmacists, PBA Health serves independent pharmacies with group purchasing services, wholesaler contract negotiations, proprietary purchasing tools, and more.
An HDA member, PBA Health operates its own NABP-accredited warehouse with more than 6,000 SKUs, including brands, generics, narcotics CII-CV, cold-storage products, and over-the-counter (OTC) products — offering the lowest prices in the secondary market.
