What Can You Learn From Independent Pharmacies in North Dakota?

Most independent pharmacies do business in a community where they face competition from at least one chain pharmacy or box store.  Of course there are exceptions to this.  Some towns are small enough and isolated enough that the local independent pharmacy is the go to business in town for prescriptions, OTC’s, beauty supplies and more. You name it, they’ve probably got it in one form or another.  Or, you could just be in North Dakota, where a law dating back to 1963 that prohibits chain stores from owning pharmacies, as they must be owned by a pharmacist.   

To me, an entire state that banned chain pharmacies sounded too good to be true.  I didn’t even know that such a place existed until North Dakota made the news when voters decided against a measure that would have repealed the decidedly pro-independent law.  That’s right, the entire state voted that an licensed pharmacist must own the pharmacy rather than a chain from another state.  All I can say is, way to go North Dakota!

While I’m ecstatic that North Dakota pharmacies will continue to operate without the threat of competition from Wal-Mart and other big box stores constantly looming, most pharmacies will never know what that’s like.  I am also skeptical as to whether other states would make the same choice if faced with the same vote as North Dakota.  What do North Dakota residents know that the rest of the country doesn’t seem to understand?  What do those pharmacies have that others might not? 

Perhaps the rest of us will never quite know, but independents battling big chain pharmacies can learn from the same arguments that defeated the Wal-Mart led campaign to allow chain owned pharmacies to operate in North Dakota. 

First, the opposition to independent ownership claimed that lower prices would result from allowing box stores to operate pharmacies in the state.  This is a common misconception that often causes consumers to shy away from shopping local.   Independent business owners know that bigger doesn’t necessarily mean better and it certainly doesn’t mean cheaper.  But it’s up to you to make sure that your customers know this.  

• Promote your private label OTC’s which generally offer a significant price break over name brand.
• Advertise the insurance companies that you can work with.  Insurance co-pays will be the same no regardless of which pharmacy a customer chooses so just make sure that customers know you can support their needs.
• Know where your pricing strengths and weaknesses are. Pull a report from your pharmacy point-of-sale system on both your best and worst sellers.  Price check against your competition and look for areas where you might need to make some changes.

Second, the pro-chain store camp argued that opening chain pharmacies would improve access.  But this simply isn’t the case.  In any market, the addition of a chain store can only hurt independent businesses, which in the long run means fewer choices for consumers.  In independent businesses, every customer counts, and once again, it’s up to you to make sure that your customers understand just how important their patronage is.

• Remind your customers that you are a local community business and that money spent in your store stays local.  Most independent pharmacies do something to support their community.  Whether it’s donating to charities, giving back to the local high school, sponsoring a youth softball team, or hosting a food drive, don’t be afraid to brag a little bit about the good you do for your community.
• There’s no better way to show your customers how important they are to you than by having a Customer Loyalty Program.  I say this often and I really can’t say it enough.  Your customers expect to be rewarded for their patronage and it really will help grow your business.  So what’s holding you back?

Your independent pharmacy is part of what keeps your community unique and independent in its own right. And while going up against a large chain can sometimes seem like an ant trying to push around a rhinoceros, it is possible to succeed and thrive as an independent pharmacy even in the face of fierce competition. 

Karen Deckard came to RMS with a background in retail and customer service, and was initially brought on board as a Sales Assistant and managed IIAS certifications for RMS’s pharmacy POS customers.  Today, Karen works as a Customer Success Manager, striving to provide independent and institutional pharmacies with the tools and resources they need to succeed in today’s competitive pharmacy market.