How can customer loyalty aid market consolidation in the Pharmacy sector?

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Customer loyalty

How can customer loyalty aid market consolidation in the Pharmacy sector?

Today, Ireland has 1,800 pharmacies, 70% of which are owner managed or part of groups with less than six pharmacies, while the remaining 30% are owned by chains. Despite these figures, the last number of years has led to a dramatic increase towards market consolidation among pharmacies.


Since 2009, The Irish pharmacy sector has seen big changes such as the prescription charges, elimination of markups on state-sponsored dispensing schemes, increased price competition and ongoing price referencing, to name a few.
These challenges have made it difficult for independent pharmacies to remain independent. HSE changes alone have added €5 excess per item dispensed, this can have a huge impact on pharmacies profit margins.

In order to withstand these challenges, many are turning to market consolidation and creating strong brands and building a loyal customer base. One of the tools used to establish a unified brand, retain customers and market share is customer loyalty.


Customer loyalty builds customer relationships.

Establishing strong customer relationships as a franchise can be difficult because you can lose the element of customer loyalty that shops locally to support local enterprise. However, using a strategic loyalty program can distinguish brands from competitors, offer customers value for shopping with your brand, allow brands to open a conversation with individual customers and in turn, enable brands to harness useful customer data to further build relationships with customers and create brand loyalty.

Customer loyalty creates brand awareness and vice versa.

Brand awareness has one of the strongest effects on customers purchasing decision. Customer loyalty directly influences consumers brand awareness. Making use of a loyalty program to offer customers promotions, communications and experiences with the brand all create a positive perception of the brand and its ethos.

Customer loyalty technology enhances customer experiences.

Communication has evolved rapidly in the past five years with more connected devices and social platforms. Yet, ironically, it’s now more difficult to truly connect with customers because there are so many ways customers can search, research and interact with brands and competitors.
Brands need to be able to communicate and engage with the customer through all customer touchpoints from Epos and dispensary, to Website, App, e-mail, SMS and social media. A fully integrated customer loyalty solution plays an integral role in delivering targeted and personalised communication across all touchpoints and enhancing the customer experience.

Customer loyalty can attract owner managed pharmacies to aid market share.

Competition to attract single pharmacy operators into franchise groups is increasing. The ability to attract and maintain these operators within a franchise group is one of the key challenges franchises face. Offering a customer loyalty strategy, displaying innovation, enhancing customer experience and building a strong brand are effective selling points for pharmacies seeking to amalgamate.

Connecting the Patient to Pharmacy through Loyalty

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