by Jen Johnston
Every business follows a life cycle, and independent pharmacies are no exception. The basic life cycle is this:
- Introduction
- Growth
- Maturity
- Decline
In the introduction stage, your store is introduced into the marketplace. For many pharmacies, this took place long, long ago. At this stage profit is virtually non-existent, an
d your money is primarily spent on inventory, operations, and promoting the store to potential customers.
In the growth stage, the market accepts your store and loyal customers are established.
As your business reaches maturity, profit and market share peaks, begins to slow down, and then stabilizes. The number of new customers declines and it is the loyalty of existing customers sustaining the business.
In the final stage — decline — profit and market shares begin to decrease. You may lose regular customers to competitors, neighborhood demographics may change, and the shoppers you relied on may have moved on to a different lifestage.
What phase of the cycle is your pharmacy in now? This critical question requires you to take a good, hard look at your business. If your store is already in the decline stage, you must act quickly to stimulate the cycle and return to the growth or maturity stages.
Doing this may require you to go back to the introduction stage, or perhaps it would be better named the re-introduction stage. If your market has changed, you may need to re-establish your business within the community, reinforcing acceptance with your current customers while attracting new ones.
An independent pharmacy in my own neighborhood has adapted extremely well to the changing market. While the neighborhood once skewed older, within 5 blocks on my street, we now have 75 children – 7 under the age of 4 on my block alone! The independent pharmacy wisely has added a large selection of wooden toys by HABA, Melissa & Doug, and other niche brands that aren’t always found at chain stores. This section is a big draw for families including my own. While we are in there looking at toys, we can conveniently pick up the health and wellness items we need also. This is part of what keeps the neighborhood loyal to their store instead of flocking to the big box chain store that is less than a mile away.