August 3, 2017
When you’re starting a new pharmacy (or opening an additional location), the first question is always the same.
Where should it be located?
You may think that if your business is good enough and if you differentiate it from the competition, the location won’t make a difference.
Or, you might want to settle for a location that’s immediately available rather than waiting for the right location.
But that decision could cost you.
Here are five ways location can affect the success of your independent community pharmacy.
Your pharmacy’s location may determine whether a customer knows the business exists or not.
If the pharmacy isn’t near areas where people frequent, or near people’s routes to and from work, they may never discover your pharmacy. Although advertisements and marketing can help attract patients, there’s a segment of people that will only discover your pharmacy if they see it.
So, if you don’t choose the right location, you’re at risk of losing potential patients simply because they won’t know you’re there. (After all, they all know where the closest Walgreens is.)
It turns out that pharmacy customers aren’t as loyal as you might think.
A survey by consumer consultancy Empathica found that 60 percent of consumers aren’t loyal to any one pharmacy. And, A Drug Store News survey revealed that 94 percent of consumers choose their primary pharmacy based on location and convenience.
For a non-committed patient, your pharmacy’s location will determine whether they choose you or a competitor.
If your pharmacy is on the outskirts of town, you’ll lose those patients who care more about convenience than customer service. And, if your pharmacy is near a high-traffic area, you’ll get more business, even if it’s not from loyal customers.
When recruiting top talent, location matters.
Employees care about where they live and work. Many people prefer to live within city limits with more schools, restaurants, parks and entertainment. This is why, for example, physicians often get paid extra incentives to move to rural hospitals.
Apply that reasoning to your pharmacy’s location within a city or town. The part of the city you’re located in can make your pharmacy more or less attractive to potential talent.
Your location affects how much your business has to compete.
If you build your pharmacy in a location without any direct competition, you can easily gain customers. You won’t need as much marketing to attract new customers because you’ll be the only option in town.
On the other hand, if you build in the same area as the favorite neighborhood pharmacy, you may have a hard time gaining traction.
However, if you build next to a national chain pharmacy, you’ll be exposed to a much larger group of potential customers. Gaining a small percentage of your competitors’ customers could be better than having a group to yourself in an area without competition.
For example, most national chain pharmacies bring in customers mainly looking to aid their maladies, not to find a trusted pharmacist to help them improve their health. If you truly differentiate your independent community pharmacy, people will notice and start walking through your doors instead.
Your location affects your profits.
Your pharmacy’s profits are determined by your expenses and rent is one of the largest expenses after employee salaries.
So, it may be more beneficial for your business to choose a suburban location with inexpensive rent than an urban location with expensive rent. The location may generate less total business, but it might make you more total profit.
Pharmacy location makes a difference, so make the right choice. Not the easy one.
Want more pharmacy business tips and advice? Sign up for our e-newsletter.