Product Differentiation, Availability and Digitization to ConquerTue, 05/28/2019 - 15:11
Q: How is Farmacias Benavides strengthening its presence in areas with insufficient health coverage?
A: Our expansion process continues in markets where we have not had a strong presence, primarily in the central region of the country. Besides inaugurating new locations, we are strengthening our brand presence with complementary services, such as home delivery and primary medical attention, at points of sale. Over the past 12 months, we have opened 100 new business units in markets where we did not have a presence.
Q: How is Farmacias Benavides transforming its business model to become not only a point of sale but of wellness?
A: We have created partnerships with players in the digital arena and e-commerce platforms such as Rappi and Cornershop. We started collaborating with both companies in the first half of 2019 and our expectation is that these ventures will help us become more accessible to clients that demand digital purchases and home delivery services. Improving medicine availability is among our main priorities, and it is a truly complex problem. In Mexico, recent studies show that a patient often needs to visit more than two pharmacies to fill a prescription. We have worked to ensure that Farmacias Benavides is the sales point where patients can find all their prescribed medications. We have made significant investments to improve product availability at all our locations by understanding consumer demand. We also are forming alliances with logistics experts to improve deliveries and to comply with customer expectations.
Q: How are technological innovations impacting Farmacias Benavides’ business?
A: We have been in the Mexican market for 102 years. We continue to strengthen our value proposition to stand out from the traditional transactional pharmacy, moving toward a model of health and primary medical attention. This will allow us to become a point of reference for our clients. In addition to home delivery services, we are remodeling our pharmacies to have a homogenous brand presence.
Over the past 12 months, we converted and remodeled 437 pharmacies. We have also taken advantage of the fact that we have access to all leading brands from the Walgreens Boots Alliance. In 2018, we introduced our generics brand ALMUS. So far, we have released 117 products through ALMUS and we expect to double that number in the coming 12 months. ALMUS is already a reference in Europe and complies with all international quality standards, which makes our offering unique for those clients looking for alternatives to commercial brands.
We are also introducing high-quality generic products through the Farmacias Benavides brand. We have 73 Farmacias Benavides products, mostly focused on vitamins and medicines for acute conditions that complement the rest of our offering.
Q: How will you balance your operations between digitally-driven solutions and traditional point-of-sale operations?
A: Many of our pharmacies are located in rural populations and suburban regions where internet solutions do not play a predominant role. Still, we continue working with both strategies to ensure we are as convenient as possible for our consumers in markets where players like Rappi and Cornershop are present, while maintaining a strong customer-service approach in areas where clients favor the traditional visit to the pharmacy.
The market will evolve eventually but it is still early for us to declare a great digital transformation, especially since most of our transactions are still done through the traditional pharmacy model. However, we remain attentive to changes in legislation that will permit the use of electronic prescriptions.
Q: How is Farmacias Benavides’ business transformation impacting the country’s overall health ecosystem?
A: We still see potential to grow organically in the Mexican market. A significant part of the market has been left unattended and we can offer an alternative in those markets where we are not present yet. On the other hand, we continue improving our value proposition through modernization and homogenous presentation of our brand.
Our investment plan includes building an additional 100 pharmacy-adjacent medical offices, which is a fundamental convenience for our clients and patients. We offer medical consultations at around 50 percent of our locations, which means these new 100 offices will help us to complement our services.
Q: What other partnerships or alliances is Farmacias Benavides developing to improve its operations?
A: As members of the Walgreens Boots Alliance (WBA), we are exploring other complementary business alternatives with global WBA partners that we will eventually communicate and that are mainly aimed at increasing the available solutions in health and well-being.We also developed a partnership with FedEx, which we are in the process of deploying throughout the country. This alliance is intended to replicate our relationship with the company in the US, which allows patients to use our stores to send and receive packages nationally at convenient prices. In some cases, our locations are even more convenient than FedEx’s. This alliance is an important enabler because e-commerce players will be able to use Farmacias Benavides as a last-mile service to deliver their products.
Farmacias Benavides is getting involved in financial services, as well. We are creating alliances with different players so clients can have the opportunity to pay for public services and make other types of financial transactions. We already have more than 200 available payments, which complements our value offering and increases the convenience of our locations at a national level.
Q: What are Farmacias Benavides’ main three goals for 2019-2020?
A: We want to continue with the incorporation of products of exclusive brands from the Walgreens Boots Alliance that might be attractive for the Mexican market. Our second goal would be to conclude the transformation of our sales points to ensure the same value proposition and physical appearance at all our locations. Finally, we want to become the reference point when it comes to filling prescriptions.