By Jen Johnston, CHHC, senior marketing services account manager
As a store owner or manager, it is essential to know who your competition is when planning your marketing efforts. From a purely prescription perspective, you might peg chain drug stores or even mail order as your fiercest foes; however, do you know who your competitors are when it comes to your front-end? While margins in the Rx department have continued to decline, your high-margin front-end selection, along with your friendly service, can help you retain and gain shoppers.
Once you’ve identified these businesses, learn their marketing strategy which can help inform your own. You’ll be able to take your own unique approach to capture some of their market share. Chain drug stores and mass merchandisers often carry the same types of front-end items, but there are also other competitors to keep your eyes on. See step 1 below for other retailers you may consider competitors in your community.
Here are five easy ways to start analyzing your competition.
- Identify your competitors. Look at surrounding businesses such as greeting card shops, gift boutiques, hardware stores, convenience stores, grocers, book shops, natural health stores, and of course the biggies – supermarkets, chain drug stores, and mass outlets.
- Categorize your competitors. Are they direct or indirect? Define the products and services you overlap on.
- Check your competitors’ prices. You can scan their ads or better yet, shop in their stores. Shopping trips like these can be among the best ways to scope out the competition. In store trips mean you can check out their merchandise, stock levels, signage, condition of store, hours, services, displays, and more!
- Monitor your competitors’ online presence and promotional efforts. Do they have an e-commerce platform? How do they engage with their customers when they are not in the store? What social media platforms do they utilize? How often and what do they post? Do they host or participate in community events? How do they partner with other businesses in the area?
- Perform a SWOT analysis on your closest competitors – those that have the most overlap with your products and services or you believe are attracting more customers for products or services you offer. What are their strengths and weaknesses? What are the opportunities for your store and the threats to your operation?
Once you’ve completed the SWOT analysis, focus on developing marketing strategies that will either overcome or minimize your competitors’ advantages and focus on your strengths. For example, you may not be able to go head-to-head with a deep discounter on price, but you can strengthen your position by focusing on other positives such as personalized customer service and home delivery. And while grocery stores can offer one-stop shopping, your selection can be broader or more niche.
One way to set yourself apart is to position and promote your store as an informational resource. You do more than sell products – you’ve got the healthcare expertise to make important recommendations. Beyond branding your pharmacy, consider branding your pharmacist staff as well, as experts in the community who go out and speak about different health topics to clubs and other organizations.
When it comes to rising above the competition, emphasizing your strengths and continuing to hone them will help you succeed. And remember, not all businesses have to be competitors – you can partner with other retail operations, too! You can both benefit from each other’s strengths and ability to tap into your respective customer bases. Elements magazine wrote an article all about “unusual” business partnerships for pharmacies, with input from our pharmacy experts here at HRG. I hope they inspire you to think outside the box!