Due to the emergence of mail-order pharmacies and the spread of pharmacy chains, traditional pharmacies are under increasing pressure. Roman Schmid, the owner of Bellevue Pharmacy in the heart of Zurich, sees more associated opportunities than risks and has adjusted his business model. A look behind the scenes of a modern pharmacy.
Roman Schmid, the owner of Bellevue Pharmacy
"Do you know your body's constitution? Progenom gene test" was written in big letters on the shop window of Bellevue Pharmacy in the summer of 2015. Many a pedestrian slowed down and some even stopped walking to find out more, but there was nothing more: no info or products – just a giant poster with a TV test card on it.
Shop window displays like this are a long-standing tradition at Bellevue Pharmacy. Getting people's attention, sparking their curiosity, stimulating them and occasionally also annoying them are all part of the business model: "Nowadays, we have to be a lot more creative than 30 years ago," says Roman Schmid, the owner of the Zurich pharmacy which is more than 100 years old. "Moreover, I want to offer something to the people who walk past here every day in large numbers."
The trademark characteristics
The large number: "We serve 1,000 customers a day on average," says Schmid. By we, he means his team of 58 pharmacists, pharmacist assistants and trainees. That is also a big number given the relatively small shop. Schmid explains it by saying that he runs the pharmacy as a 24-hour operation which is open 365 days a year. Moreover, customers expect to be served quickly. They don't come into the shop in even numbers throughout the day, but rather in bursts. Schmid has therefore developed a sophisticated roster: at peak times, such as over lunch, many staff members are present, whereas only one pharmacist is on duty from midnight. "It is usually fairly quiet during the night," explains Schmid, "the business also does not make a profit during that period." There is a simple reason why he nevertheless continues to offer a night service: "That is one of our trademark characteristics."
The other trademark of Bellevue Pharmacy is its wide selection of complementary medicine. "That has always been one of our strengths," says Schmid. He not only uses "strong" to refer to the product range, which includes everything from Bach flowers to homeopathy, spagyrics, phytopharmaceuticals and Schuessler salts, but also the know-how he can offer in this field. "This area places high demands on our staff," says the pharmacist, "and I invest a lot in training our employees."
According to Schmid, it is absolutely essential that independent pharmacies build up a mainstay with products and know-how outside of orthodox medicine. On the one hand, because competition has become fiercer as a result of the emergence of mail-order pharmacies and the spread of pharmacy chains. On the other hand, because margins are under pressure in this industry too. Generic medication is the keyword here. It costs 40 to 60 percent less than the original, and the pharmacies earn less on it as a result. This is in spite of the storage, registration and sales costs remaining the same.
There is nothing that can be done about the sinking margins, so pharmacists must be innovative if they do not want to be priced out of the market. "It has not been possible to get by on just filling doctors' prescriptions for quite some time now," says Schmid. Prescription medication now only accounts for just under 40 percent of sales at Bellevue Pharmacy. "The rest are over-the-counter sales," says Schmid. Alternative remedies have an important role to play here. However, Bellevue Pharmacy is also well-known for its in-house specialities, which are produced in its own laboratory, such as pelargonium lozenges for colds or roseroot drops for more composure and energy. "A niche market I cater to," says Schmid.
Packing Bach flowers in the in-house laboratory. This includes, for example, emergency drops to calm examination nerves.
The Graubünden native has a product range with a total of 15,000 items in about 100,000 packages. A logistical nightmare: some medicinal products must be stored at room temperature, while others have to be refrigerated. Narcotics are stored in an especially secure place, tea herbs in a completely dry room, and toxic substances and explosive chemicals in a fireproof one. To deal with the large quantities of the most common medication sold in tablet form, Schmid has purchased a state-of-the-art robot which manages a separate, glazed storage area in the basement: the item is selected at the computer on the counter and "Rowi" sends it up to the shop via a cleverly devised transportation system in a matter of seconds. If it is not sold in the end, he takes the package back and conveys it back to its place on the basement shelf, including the corresponding registration.
IT and high tech
IT now plays a key role in general at Bellevue Pharmacy. "Everything, from the ordering system to service in the shop, must be faster," is how Schmid explains the trend. He relies on sufficiently qualified staff on the front line. Behind the scenes, it's all about high tech and IT. "We have completely automated the flow of goods," says the entrepreneur and looks around at the countless screens which are everywhere, both in the shop and behind the scenes. He then talks about the laborious and complicated card process, with which he used to order fresh supplies until not too long ago. "Today, we don't even need to use the telephone to do so anymore," he says with a grin on his face.
Technology has changed a lot of things at Bellevue Pharmacy, but the core business is still the same. "We are and will remain the first point of contact for lots of people with health-related concerns," says Schmid. "We take our time, offer free advice and do not require customers to make an appointment." Direct contact and one-to-one consultations are an absolutely essential component of his business model – never mind the new technologies: Schmidt is convinced that "digitalisation will continue to change pharmacies, but it will not make them disappear." The same applies to product range composition and management: "no computer can do that task for you – that is and will remain my commercial risk."
When deciding whether or not to add a new product to the range, he usually relies on his experience, knowledge and intuition. He sometimes also seeks the advice of his team. This was the case with the Progenom gene test which he advertised prominently in the shop window: "About 20 employees put it to the test and provided positive feedback," says the boss, "that is why I was brave enough to do the experiment." Progenom has since been removed from the shop window. The product now has six months to become a commercial success. Your prognosis? "Wait and see," says Schmid, "it is and always will be difficult to gauge success."
Text: Iris Kuhn-Spogat