The Pharmaceutical Journal Vol 264 No 7093 p633
April 22, 2000 Forum

Institute of Pharmacy Management International/Young Pharmacists Group

Public "will demand on-line pharmacy"

Pharmacy would inevitably change and on-line pharmacy would become a reality because the public would demand it, Mr David Wood (deputy managing director, Numark) told the IPMI/YPG conference. Independent pharmacists had to be in it together, giving the public what they wanted, he said, because those who simply tried to protect their existing businesses would be passed by. Mr Wood emphasised that it was possible to combine traditional business successfully with electronic commerce. Some large United States companies that had been hit by internet trading had pulled back some of their lost business by integrating e-commerce with their existing "legacy" business. Even so, only five of the top 20 e-business websites were offshoots of existing legacy businesses. Many legacy businesses were reluctant to embrace e-commerce. One reason was that managers resisted change because they had invested so much in the existing business. Another problem was fear that going onto the internet would simply take business away from one's existing outlets. A further problem was companies' existing distribution systems. They were not a strength because they were not geared for internet fulfilment, being based on the supply of pallet loads to shops, not small parcels to homes. Similarly, the consumer information held by legacy companies was of the wrong sort, relating generally to the customer base as a whole. The advantage of net sites was that they could be personalised to the individual, perhaps e-mailing customers with news geared to the individual.

During a question and answer session, left to right, David Wood, Musa Dhalla, Daniel Lee and Eric Hunter

Despite those problems, there were a number of advantages to moving into e-commerce for large multiple companies such as Boots and Marks & Spencer. One was an established brand name which, if also used as a web address, made it easy for customers to find the site. Another was the existing customer base. With their existing strong links with suppliers, such companies also had an advantage in negotiating e-commerce deals. Furthermore, their existing outlets could be used for order fulfilment and distribution and gave customers somewhere to return unwanted stock.
Before moving into e-commerce, businesses should be aware that websites generally had their problems. One was that they were not user friendly. Customer research by the BBC Money Programme had found that customers mistrusted credit card payment over the internet, preferred to speak to a real person, found on-line ordering complicated and had problems with home delivery.
Another e-commerce problem was that it could be expensive to attract customers to one's website. Some internet companies were spending three-quarters of their venture capital on advertising their existence. A new problem was that capital markets were now rethinking the valuation of e-commerce.
Mr Wood said that Numark was creating a website (www.numarkpharmacists.com) designed to enhance, rather than compete with, the business of existing independent pharmacies. It would include a catalogue of products not normally stocked in independent pharmacy. Customers would be able to order either on-line or through their local Numark pharmacy. Delivery would be to the pharmacy, with a confirmation of delivery e-mailed to the customer and enhanced service at point of sale - adding back the face-to-face contact that customers liked.
The site would also carry health and personal care advice and include a sophisticated search engine to allow users to find their nearest Numark pharmacy. Numark members would have their own web presence, and the service would be free to shareholders as part of their Numark membership.