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Pharmacies combine an increasingly sophisticated healthcare offering with an equally robust retail aspect. In this profile feature, we asked Grant Bai how Green Cross Health negotiates the balancing act.
Modern pharmacies are full of contradictions. You can buy a lipstick, pick up a swag of supplements and fulfill a prescription in the same transaction. While you wait, you can get your nails buffed, test your blood glucose levels and even have a Botox treatment. How can a single store cater appropriately for all these needs?
Not every pharmacist is a natural at business management, says Grant Bai. He can get away with this statement because, as well as being chief executive of Green Cross Health, Bai is a trained pharmacist.
“You tend to be empathetic, and really working for a more altruistic goal,” he says of the pharmacist personality type. “That doesn't necessarily make the best business manager at the end of the day.”
Bai’s passion for the business management side of pharmacy shines through in his enthusiasm for ‘retail theatre’ and customer service. He began his training in medicine at the University of Waikato and ended up following his father into pharmacy, gaining a Diploma in Pharmacy from the School of Pharmacy Central Institute of Technology in Wellingon.
It was the medley of professional, clinical and business aspects in pharmacy that attracted him, Bai says: “My father was trained as a dentist and ended up in pharmacy so we both had slight changes of direction.”
His involvement with the company he now runs began in 1995, when the first pharmacy he bought was taken into the now-defunct Amcal brand. In his own businesses, Bai says, he and his team were singularly focused on consumer excellence – and the challenge of applying that focus to other pharmacies was too good to pass up.
“What I found was, we had a medical-type pharmacy that we developed into quite a good retail offer. We then replicated that model into some other businesses and we ended up with a few pharmacies and a few other businesses. I thought, well, I enjoyed creating that customer experience, and what better way to do it on a larger scale than to be involved with what was Pharmacybrands back then.”
The rise of Green Cross Health
The company Bai now runs, Green Cross Health, represents 326 pharmacies around New Zealand under the Unichem and Life Pharmacy brands. Pharmacy isn’t the listed company’s only division, but it is by far the strongest, bringing in $138.4 million for the six months ended September 30 2015 - nearly 65 percent of Green Cross Health’s revenue.
As of 2014, Green Cross Health reached over 67 percent of the market and fulfilled more than 40 percent of New Zealand's prescriptions on an annual basis.
The growth of Green Cross Health has been, in large part, about developing its retail offering within pharmacies. A major brand redevelopment which began in 2013 has successfully defined the split between retail and dispensary within the company’s two pharmacy brands, Unichem and Life Pharmacy: the former is weighted 60 percent dispensary and 40 percent retail, while the latter flips that ratio.
Dispensary is growing, Bai says, but retail is growing faster: “The differentiation in the pharmacy division has really been about the growth of retail.”
Pharmacy was originally Green Cross Health’s sole focus. The company was born in 1981 when Unichem Pharmacy Group was established as a buying group, and moved through several changes as various commercial pharmacy entities were merged and acquired.
Of these, Dispensary First, Radius Pharmacy, Amcal and Care Chemist have since been retired as brands, while Unichem and Life Pharmacy continue to be developed. The company rebranded from Unichem Pharmacy Group to Pharmacybrands in 2003, and to Green Cross Health in 2014 to reflect its new identity as a provider of primary and community healthcare.
As a whole, Green Cross Health reported a net profit for the for the six months ended September 30 2015 of $8.3 million, up 19.5 percent year on year. In its latest annual report, the company attributed this strong performance to its pharmacy division, which saw retail sales up by 14.5 percent and dispensary sales up 3.8 percent.
Pharmacies’ interaction with the public health system via dispensary distinguishes them somewhat from other businesses, Bai says: “It's an interesting model because, of course, it's a government-funded model but delivered by private business. There's always an element of tension in amongst that environment.”
Offering more medical-style services through its pharmacies is part of Green Cross’ growth strategy for the pharmacy division. The company has been working on raising the profile of pharmacists as accessible healthcare professionals, filling a gap left by increasingly busy GPs and other primary healthcare workers. New services introduced into Unichem and Life Pharmacy outlets include vaccinations for influenza, shingles, whooping cough and meningitis; bowel cancer screening; testing for zinc levels, blood glucose, cholesterol and blood pressure.
The emergency contraceptive pill is also available. Green Cross Health is one of several organisations currently lobbying for reclassification of oral contraceptives as over-the-counter medicine, and has recently achieved the reclassification of a psoriasis cream. Bai is outspoken about the issue of consumer access to medications.
“I think every woman has the choice to choose but if that choice is taken away from them because of access, that’s an issue,” Bai says. “[Oral contraceptives] would be one of the safest medications you could possibly find. And look, the complications around an unwanted pregnancy are enormous – not only from a physical or medical perspective, but with family, it’s got huge implications.
I think things like that, Green Cross should stand up and fight, and that’s what we’re doing.”
Supporting the public health system
Bai clarifies that Green Cross Health is not out to ‘retail-ise’ medicine or take business away from its medical and community health divisions in favour of pharmacy, but that it hopes to complement those offerings with further, more accessible services.
“It's not there to eat away at either the medical or community health divisions, it's really there to create a far better profile in the community.”
In illustration of how companies like Green Cross Health can “get in behind” and work with the Ministry of Health to improve public health outcomes, Bai brings up an immunisation drive carried out last year in the Waikato. The local district health board’s goal was to vaccinate over 60 percent of people aged 65 plus for influenza, but when it struggled to reach this limit, it opened it up to Green Cross Health’s medical and pharmacy division.
“Now the interesting thing there was, medical got more engaged – there was a bit of patch protection going on there – so they vaccinated up to 72 percent… and pharmacy managed to vaccinate up to 80 percent,” Bai says. “Once you get to 80 percent, you’re looking at a herd immunity on influenza. The Waikato region had the best-ever result as far as reduction of referrals into hospital for influenza last year.”
Addressing demographic challenges
The looming health crisis posed by New Zealand’s ageing population has not escaped Green Cross Health. According to the Ministry of Social Development, New Zealand’s population of people aged over 65 has increased from 11 percent of the total population in 1991 to 13 percent in 2009. The elderly are expected to outnumber children by the late 2020s. In addition, the population of very elderly, or people aged 85 plus, is expected to more than double from 67,000 in 2009 to 144,000 in 2031.
Green Cross Health is poised to directly take advantage of the increasing need for in-home care through its community health division, which already services around 200,000 patients, but Bai says the pharmacy division will also play an important part in caring for Kiwis as they age.
“There is a limitation to how many aged-care facilities we can produce in this country,” Bai says. “This really stems from the Ministry of Health and DHB policy about keeping people in their homes for longer and we think we have a unique position to be able to do that.”
Soon, Green Cross Health pharmacies will be able to offer genome testing among their other in-store services. Bai sees this as a natural progression from their ‘Know your numbers’ campaign encouraging customers to identify their personal vulnerabilities to particular diseases, especially as they age.
“You should know your blood pressure, you should know your blood glucose levels, you should know your genetic disposition, and that's really the next step.”
He also considers pharmacies’ natural health and nutrition departments to be necessary for support of a longer life. Asked about Green Cross Health’s diabetes support – diabetes being another major emerging health issue for New Zealanders - Bai mentions the company’s blood glucose testing facility, but then draws in weight management.
“If you start looking at the holistic view, it’s about BMI – Body Mass Index. That’s a far bigger impact on late-onset diabetes than actually controlling blood sugar.
“The strategy should be worked out by the doctor in a care plan for that particular patient, but the coaching part can very much be done by a pharmacist or a community health worker. I think there’s a fabulous opportunity to address population health issues in a different way and I think Green Cross Health has got a wonderful opportunity to deliver that.”
Different approaches, same goal
The natural health category within pharmacy has been the company’s fastest-growing category, as well as one of its biggest – it accounts for nearly 20 percent of pharmacy’s retail offering.
“Our pharmacies have taken the stance that we should be the preferred supplier for natural health. One, because we do have a trusted environment. It comes with care and advice, we do get the background story behind the products; and also, because we do have a unique environment of the professional and the retail, you can work the medical-based products with the natural health products to make sure that there’s no interactions and they complement each other.”
Bai turns aside any suggestion that medically unproven products such as homeopathic remedies might not sit comfortably beside the strictly-controlled mainstream medicines coming out of the dispensary.
“You can’t underestimate the power of the mind, and I don’t think you can impede on consumer choice,” he says. “If the person feels that that’s the right product for them, it should be, and then you need to wrap some information around that so they are making informed choices.”
The different relationship between customer and pharmacist versus doctor and patient is part of the reason why pharmacies are so much more accessible. As well as being traditionally rather difficult to get hold of, Bai says, doctors tend to take a hierarchical view of their relationship with the patient, telling them what to do rather than considering their needs as a customer.
“I know medical don’t necessarily like to think of their patients as customers, but at the end of the day, they’re consuming healthcare. I think it’s really nice to think of them as a customer because it’s a very respectful relationship.”
Bai believes the more service-oriented relationship between the pharmacist and their customer means pharmacies are better placed to respond to change in the market. Making pharmacies an attractive and easy-access reference point is particularly important now that ‘Dr Google’ is most consumers’ first port of call for health information, he says.
Feeling good and looking good
He also sees synergies between medical-style services, appearance medicine and cosmetics. Selected Life Pharmacies began offering specialist beauty treatments such as dermal fillers, platelet-rich plasma therapy and Botox in 2014. Asked if these services might be perceived to clash with more practical offerings like blood testing and immunisations, Bai again emphasises the importance of customer access, and links the services to a holistic concept of health.
“One of the core philosophies, particularly in the Life Pharmacy group, is that you want to live well. Part of that is feeling good on the inside but feeling good on the outside as well.”
“I do think there's a big part to be said around feeling good, looking good inside and out. The other part just comes down to access – good professional service, a place you can trust, and you know the quality.”
New Zealand’s lack of larger department stores such as Myer and, until recently, David Jones, means it has a comparatively strong prestige cosmetics market within pharmacy. Green Cross Health pharmacies are seeing great growth in this category, Bai says, and the trusted position of pharmacies also has applications for the cosmetics market.
“A point of difference between us and a department store from an over-the-counter perspective, or a prestige perspective, is that contact with the product. They can interact with it, they can trial it. We’ve got very well-trained people who can interact with them. That part from a retail perspective is quite exciting.”
Bai feels there’s an emerging opportunity for entities such as Green Cross Health, which encompasses medical, pharmacy and community health, to tie together retail interaction with dispensary and medical, and coordinate each patient’s healthcare. A potential conduit for the flow of health information already boasts 1.2 million members – Green Cross Health’s ‘Living Rewards’ loyalty programme.
The company has been developing Living Rewards in the pharmacy division for around two years, and is still adding around 20,000 members per month into the programme. It currently allows users to exchange points for vouchers and other rewards, but Bai’s vision is that it will become a chipped “health card” carrying the user’s health details. Rewards for healthy behaviour, as well as purchases, are part of the plan.
“The Living Rewards card could potentially be the conduit for accessing all healthcare.”
This vision is almost a reality – Bai says Green Cross Health is actively figuring out how to get the health-information-enabled Living Rewards card into play now. The basics of this product will be launched into the company’s medical division in June.
Bai strongly believes that customers should only have to tell their health story once as they journey through the health system. The Living Rewards card may well represent progress in that area. However, Bai also believes in the value of conversations between the customer and pharmacy staff - developing customers’ relationship with their pharmacist is key to both their health outcomes and that of Green Cross Health.
Doctors relate to their patients through diagnoses and assessments, but pharmacists are obliged to offer their help through the kinds of conversations which arise while a prescription is being filled. A strong retail offer makes a store more welcoming and supports this aim.
“Breaking down the barriers to the consumer and getting a conversation started, I think, is a very important part of healthcare,” Bai says. “Just starting the conversation – being able to talk to the pharmacist when they can about bits and pieces in their lifestyle.”
This story originally appeared in NZRetail magazine issue 744 June / July 2016
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