Restoring health
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Restoring health. Partnering with pharmacies to survive and thrive. Three changes in the convenience industry create new opportunities. 1. 2. 3. Channel blurring between supermarkets and convenience stores. Increasing regulation around tobacco sales. Increasing labour costs.

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Restoring health

Restoring health

Partnering with pharmacies to survive and thrive


Restoring health

Three changes in the convenience industry create new opportunities

1

2

3

Channel blurring between supermarkets and convenience stores

Increasing regulation around tobacco sales

Increasing labour costs


Industry revenue growth indicates a need for change

Industry revenue growth indicates a need for change

Change in industry revenue (%)

Source: IBISWorld, 2014


As consumer preferences change health and wellness have taken on increased importance

As consumer preferences change, health and wellness have taken on increased importance

Consumer Trends

Retail Growth

Expectation for 24/7 availability

Increasing OTC medicine consumption

Increasing engagement with digital advertising

Population increasingly health conscious

Source: Australian Institute of Health and Welfare, 2013

Source: Aztec & Retailer Contribution, 2013


Strategy overview repositioning convenience stores and redefine convenience

Strategy Overview: Repositioning convenience stores and redefine convenience

2

1

3

$

Expand Over-the-Counter (OTC) pharmaceutical range

Alliance with the Pharmacy Guild

New revenue stream


The convenience store industry requires a long term and far reaching solution

The convenience store industry requires a long term and far reaching solution

What does a solution require?

Scalable

Innovative, to gain a first mover advantage

Capitalise on key consumer trends

Short and long term sustainable benefits

Source: Aztec & Retailer Contribution, 2013


Convenience stores can advertise through led screens on street front

Convenience stores can advertise through LED screens on street front

$

Benefit for convenience stores

Will it work?

A quick win for convenience stores

Coca Cola used biometrics and facial recognition technology via a clear LED digital screen on fridges.

The screen serves ad campaigns, collects sales data and can detect customer interaction.

This has boosted sales by 12% compared to standard fridges.

Maximise street frontage

Supplement POS advertising

Generate new revenue

How will it work?

Convenience stores install LED screens

Digital advertising space available to sell

Interactive capabilities provide new content experiences that can boost a product’s sales and brand loyalty

Source: Coca-Cola Is Using Facial Recognition Technology On Fridges In Australia To Sell More Drinks, May 2014, Business Insider


Expanding pharmaceutical offerings will provide additional convenience for consumers

Expanding pharmaceutical offerings will provide additional convenience for consumers

Currently

Opportunity for convenience stores

Some OTC products sold

Community Pharmacy Agreement - Up for review 2015

Limited knowledge and awareness of pharmaceutical offerings

Increase and market OTC product range

Limited association of ‘health and wellness’ with convenience stores

Opening hours and locations provide an opportunity to meet consumer demand

Pain relief, in your hour of need


Restoring health

Positioning now to benefit from growth and anticipated demand for pharmaceutical products and services

Meet consumer health and wellness needs

Proven success from the hybridised value of pharmaceutical and convenience stores

  • Positioning now to improve the accessibility of health servicesin urban and regional settings


The pharmaceutical and convenience industries share characteristics making it an ideal partnership

The pharmaceutical and convenience industries share characteristics, making it an ideal partnership

Benefits for convenience stores

Access a wider range of consumers

Point of differentiation

Legitimise health and wellness focus

Motivations for pharmacies

New growth opportunity

Increased presence

Cost reductions


An alliance between aacs and pharmacy guild will provide consolidated strength against supermarkets

An alliance between AACS and Pharmacy Guild will provide consolidated strength against supermarkets

Why will this deliver value?

How will value be realised?

Gain strength through collaboration

Stronger voice

Increased Lobbying power

Face a shared market pressure

Access to a shared consumer base

Collaborative efforts will provide new value

Shared resources

Combined marketing efforts

Legitimising existing healthy offerings

1: Woolworths in new bid for pharmacy, October 2013, AFR; Small grocers shocked at proposed increase in hours of trade, May 2014, Dynamic Business.


Restoring health

The Restoring Health strategy will generate a net present value of $259,000 over three years per store

$259,000

by 2017 (Net-Present-Value for 3 years)

Components

Break even in 18 months

87% ROI

Net Present Value of $259,000 per store

Source: IBISWorld, 2014


Restoring health can be implemented over three years

Restoring Health can be implemented over three years

Pharmaceutical expansion

Planning

Communication

LED screen


Restoring health can be implemented over three years1

Restoring Health can be implemented over three years

Pharmaceutical expansion

Commence talks with pharmacy guild

Establish and begin the alliance

Move towards hybridised stores

Expand OTC range

Implement OTC range

Communication

Planning

LED screen


Restoring health can be implemented over three years2

Restoring Health can be implemented over three years

Pharmaceutical expansion

Commence talks with pharmacy guild

Establish and begin the alliance

Restoring health

Move towards hybridised stores

Expand OTC range

Implement OTC range

Partnering with pharmacies to survive and thrive

Planning

Communication

Procure and install LED screens

Expand LED functionality

Understand and adapt

Sell advertising space

LED screen


Restoring health

Probability distribution for strategy net present value


Restoring health

Discounted cash flow analysis of strategy


Restoring health

Variables used in DCF of strategy


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