In less than a year, COVID-19 has pushed the economy to breaking point. Businesses have been forced to adapt the way they operate to ensure they can continue to meet consumer demands and survive. The pharma industry, which has traditionally operated face-to-face, has been propelled into a digital world. With the temporary closure of bricks-and-mortar stores during lockdown, businesses needed to ramp up their online presence...and fast.
This acceleration in online migration has been reflected in consumer purchasing behaviour – whether that be adding medication to an online shopping basket or virtually prescribed medicines by a doctor. This is a trend which looks as though it’s set to stay. If the option is there and face-to-face customer service is falling, digitalisation needs to be the way forward in the pharma industry because the public demands it.
In March 2020, during the peak of the pandemic, cough and cold medicine rose by 10% online. Fear, stockpiling, and the ease of shopping online all played its part. Many companies in the pharma industry are now looking – or should be – at digital consumer trends and how these will continue to progress.
Pharmaceutical businesses need to understand going forwards traditional buying habits will not suffice. They need to instead look at the wider consumer purchasing behaviours, and take note of how these are changing during unprecedented times. Where are customers shopping online? Why are they doing this? How do they shop online? Do they use social media to read reviews? What are they searching for?
Improving online visibility is key to ensuring pharma companies are being seen by their potential customers. Remarketing is an effective way of doing this through display advertising across platforms including social media – keeping brands at the forefront of consumers' minds, even when they are carrying out other online activities. By having tracking in place – monitoring every touchpoint of the customer journey – it is also possible to evaluate which methods of advertising are working well, and which ones are not.
Using tools such as Google Analytics to uncover valuable customer data, campaigns can be tailored more effectively. Insights into customers based on their age, gender, location allows for more specific targeting and therefore should result in a higher conversion rate leading to increased revenue.
The biggest challenge that pharma companies face is competing with large supermarket retailers who already have a strong online presence. Not only do the large supermarket chains stock a vast range of branded products, they also produce and sell their own competitively priced branded range of medicines. For the consumer shopping online, a supermarket brand of paracetamol at a lower price will be more appealing than a branded paracetamol alternative at a higher price, particularly if the purchasing process can be incorporated into their weekly shop.
This year has seen Tesco invest in approximately 16,000 new members of staff to support their e-commerce, click-and-collect and delivery offering having recognised the massive shift to online as a result of the COVID-19 pandemic.
How does the pharma industry embrace online change?
The five golden Pharma rules below are just the start but also highlight how technology holds the key to independent pharmacies, competing alongside huge retailers in the e-commerce space. The trend for businesses to move online was already happening, even before lockdown and COVID-19 which has simply accelerated the process. Online businesses such as Amazon benefit from lower costs and higher profits as sales are conducted online without the need to support traditional bricks-and-mortar stores.
Pharma companies that can legally sell their products direct to consumer need to make sure that they have e-commerce functionality on their website, otherwise they won't be able to reach their audience where that audience is active. Selling through other retailers or through a direct-to-consumer marketplace like Amazon will not achieve the revenue that pharma businesses will need to achieve in order to survive. We are already seeing online-only pharmacies such as Your Pharmacy, MedExpress and Pharmica bucking the trend in a modern way through digital sales.
One worry from the industry is how to market products through the correct channels in order to comply with regulations. From the outside looking in the challenge exists, but simply following the correct procedures and legislations in place is key and simple enough to do.
The five golden pharma rules
1. Clearly define your 'goals’
Start by thinking about the specific marketing actions that you want to track, to understand how these make a difference to your goals. Then you can start to use your activity to create a greater understanding about your activity. For example, measurement of the ROI that your activity has generated is useful because it allows you to measure which methods are most effective when it comes to increasing profit margins.
You should also look at ways of tracking the activity that is likely to have more of an influence, for example, monitoring the number of clicks on your ads, or interactions with certain aspects of your website. Once you understand where people are coming from and what is bringing them to you, you then will start to have a useful ecosystem that helps you understand how to better influence your leads, and give you a better chance of converting that all-important sale.
2. Track correctly
Make sure you aren't mixing up actions at different stages of the customer journey so that you can separate out campaign performance by each stage and measure success correctly. If you're measuring based on impressions, then something is wrong. Also, make sure your analytics platform links up correctly to your ad platforms correctly and is pushing through the right goals.
3. Show to the right audience
An advert on the side of a bus is seen by many people of all genders, ages, interests, incomes and geographic locations. This is not a very specific audience, so a lot of money is wasted on showing adverts to people who are not considered the target market. Advert platforms like Google Ads and LinkedIn Ads allow you to target your exact audience, and track ROI to ensure you are getting value for money.
4. Split test your ads
By giving each advert a separate UTM (Urchin Tracking Module) code when creating them, means they can be tracked independently of each other. A UTM code is a unique code attached to a custom URL providing insight on where traffic is coming from. This allows you to have multiple adverts showing to the same audience and can quickly and simply evaluate which works better. When you have a clear winner, remove the weaker advert then create new adverts to test against this and continue on a cycle, to make sure you're always improving your advert quality.
5. Automation and artificial intelligence
The technology of advertising has massively surpassed where the standard is for pharma. We constantly see new updates not being utilised in this industry. Advert platforms have new ways of automating time-consuming tasks and complex tasks. Also, the in-built functions to the platforms have learning-capabilities, meaning that they can improve their audience targeting and budget allocation based on new information without being told to do so. By adopting automation, there is greater potential for expansion and growth.
What does the future hold for pharma brands?
The sooner the healthcare industry embraces that need for a digital presence, the better. For an independent pharmacy, do they take on the challenge alone, or continue to seek help by selling not just B2C, but also B2B? They could be missing out on a huge chunk of the profits because B2B partnerships would demand commission fees for each sale. Some smaller companies may also continue to focus predominantly on a personal face-to-face service - but this comes at a cost with the risk of not future-proofing their business.
Using tools like Google Analytics is a great way to discover, improve and set up goals for customers online yourself. We are gradually seeing more pharmacies embracing digital, with Echo as part of the Lloyds Pharmacy Group doing particularly well during the lockdown. This looks like a continuing trend – even on the other side of the pandemic. Pharma brands cutting commission fees they would usually give to competitors such as supermarkets and selling solely direct online could be a game-changer. Embracing digitalisation is the smart move.
David Cooper is marketing manager at Fountain Partnership