How to fight the tough battle in the fourth quarter and draw a satisfactory end to 2023 has become the most concerned issue for practitioners at present.
Text | Hair
2023 has entered the end, and all walks of life have started the year-end battle. Under the premise that the overall market consumption this year is less than expected, no one knows whether the fourth quarter can end perfectly.
First Pharmacy Finance recently conducted a survey in which 537 pharmaceutical retail practitioners filled out the questionnaire. Among them, 69.23% of pharmacy people believe that "the failure of traditional marketing methods" has become the main challenge to the growth of performance in the fourth quarter.
In terms of industry, 58.33% of respondents believe that online and offline business conflicts have become an important factor restricting performance growth.
01
A torturous fourth quarter
"Recently, the density of manufacturers' activities and chains themselves has increased significantly, and they have begun to sprint," said a pharmacy manager from Sichuan, adding that walking on the road, you can see many pharmacies posting advertisements such as "lottery" and "store celebration" to try to attract attention.
The end of the year is the peak of consumption in the year, and enterprises usually set the performance indicators of the fourth quarter relatively high in order to "have a fat year". However, this year's situation has not been satisfactory. The author learned from a number of industry insiders that since the second half of the year, the business has been quite cold, although slogans such as "maximum sincerity" and "super strength" have been played, but there has been no recovery of customer enthusiasm. Everyone is "defensive posture and cover their wallets".
Wang Yan, vice president of Sichuan Longyi Pharmaceutical Retail Chain Co., Ltd., said that this year's situation is somewhat difficult, and the operating situation in the first half of the year is relatively stable, and the performance has reached the standard. Unexpectedly, there was an abnormality in the third quarter, and the off-season was more "light", and the performance in July and August fell significantly, and the unfinished indicators were postponed back, resulting in a sharp increase in pressure in the fourth quarter.
According to data from Zhongkang Lingsu System, after July 2023, the average sales of sample pharmacies decreased compared with the same period last year, and the average daily store sales fell by 13.3% compared with the average daily sales in the first half of the year, and the average order volume and customer unit price of stores also declined, and the market growth was obviously weak. The reasons behind it, such as difficulties in prescription circulation, shrinking drug profit margins, online and offline price wars, and continuous loss of customer flow, have become pain in the hearts of pharmacies.
Pressure also exists in upstream pharmaceutical industry enterprises. An industry insider revealed that after the epidemic was released this year, some companies completed the annual target in the first quarter, so the performance expectations were particularly high, and I felt that this year must be an explosive year. However, market consumption is the opposite, overproduction, excessive procurement need time to digest, although this year's performance has not been significantly affected, still worried about next year's weak consumption.
02
The promotion gradually "failed", and pharmacies groped for new tricks
In the face of unsatisfactory performance, pharmacies naturally do not sit still, in order to see the effect in the short term, event promotion has become the first choice. When one starts a promotion, the other will immediately follow, all worried that the next event will be snatched away, resulting in increasingly fierce competition in stores. In the long run, consumers have to wait until a pharmacy gives a satisfactory plan before buying, forcing the pharmacy to roll up and roll up on the promotion.
But can low-price promotions really save traffic?
Wang Qinyao, vice president of Changkang Pharmacy Chain Co., Ltd., said that the phenomenon of gradual "failure" of promotion has been experienced in the first half of the year, such as Women's Day, it is clear that the intensity of activities, publicity methods, and attention are the same, but the effect is not as good as the previous year.
Wang Yan also feels that the promotion effect is not as good as before, ultra-low discounts, full lottery, drainage products and other means to consumers are significantly less attractive, "In the past, the average daily turnover of activities could be as high as 4-5 times, but now it is only about 2 times." ”
What is the reason?
There are simply too many pharmacies. According to the latest data from enterprise investigation, there are 630,800 pharmacy-related enterprises in the mainland. In the past decade, the overall number of new registrations of pharmacy-related enterprises in mainland China has shown a slow growth trend. As of now, there will be 56,300 new pharmacy-related companies in 2023.
Wang Yan also said that the rapid development of online B2C and O2O has made drug prices more transparent and price wars more intense, which has weakened the effectiveness of low-price drainage in stores to a certain extent. At the same time, the current main consumption force shows a trend of shifting to the younger group, this generation of consumers is more "flower" than ever, today to your home tomorrow to go to other home, brand loyalty is not high.
As for what to do in the future, pharmacy people can only cross the river by feeling the stones. "We are also developing online business now, and online payment collection is faster, which is a guarantee for cash flow," Wang Yan said, "and will also develop some fun activities, such as setting up some parent-child games such as fishing in community stores, to attract young people and small families." In addition, Wang Yan also hopes to improve the professionalism of front-line staff and optimize membership services to enhance stickiness, "There is still a lot of room for cultivation in the relationship between consumers and pharmacies."
Wang Qinyao said that at present, there is basically no differentiation of pharmacy products, and the focus of operation should return to professionalism and service, and then he will pay more attention to the member group and give them more services and benefits to achieve relationship binding. Now the market is indeed not good, but the survival of the fittest in the market has always been there, pharmacy people can only accept reality, strengthen team building, and enhance their core competitiveness.
Wang Haojie, president of the Kaipai Pharmaceutical Public Welfare Alliance and chairman of Sichuan Bairenyuan Pharmacy, said that the "discount point gift" three-board axe has been highly homogenized and has little effect. Sometimes it is necessary to improve the efficiency of promotion alone, it is necessary to improve the theoretical foundation of staff, do a good job in skin care and eye protection and other testing project experience, and develop authentic Chinese medicinal materials. Pharmacy people can also keep pace with the times and learn marketing methods of social media such as Douyin and Xiaohongshu.
03
Online and offline games, pharmaceutical companies are in a dilemma
The problem of cold consumption and gradual "failure" of traditional promotion methods exists in the pharmaceutical industry, but at present they are facing a bigger problem that they do not know how to solve.
Changes in the market environment and changes in consumption habits have prompted industrial enterprises to consider multi-channel layout and set up special teams to develop online business. With more channels and more difficult control, problems will occur. A practitioner said that pharmaceutical companies want to walk on two legs online and offline, but these two legs are "pinched" and difficult to balance.
The above practitioners analyzed that low prices are a prominent feature of online business, and pharmaceutical companies have to reduce prices if they want to attract customers, but because drugs will not appear in the commodity characteristics of multiple repurchases in a short period of time, online transaction volume may not necessarily be business increment, but may erode part of the sales share that originally belongs to offline. It is equivalent to pharmaceutical companies using more operating costs and lower product profits, but they did not make the cake bigger, only feeding the appetite of the original customers.
However, relaxing online business and focusing on offline is not entirely in line with the interests of pharmaceutical companies. First, the pharmaceutical e-commerce business is developing rapidly and should not be missed; Second, focusing on offline means that the dependence on chain will continue to strengthen, the voice of cooperative Chinese medicine companies will be reduced, and it will be more difficult to maintain prices in the future.
Regarding how to balance online and offline business development, the above-mentioned practitioners said that everyone understands the truth of "integration rather than conflict", and is also thinking of some ways to standardize channels and re-plan goods, but has not yet found a mature method.
However, there are many people in the industry who are optimistic about the development of online business. An industry insider in Jiangsu said that consumers are now becoming more rational and will give priority to well-known brands. After the traffic dividend period of online business has passed, it is time to test the brand power. As long as the product effect is good, the brand voice and brand image of pharmaceutical companies will be significantly improved, and after opening up channels, the weight of pharmaceutical companies in the industrial chain will also increase. The above-mentioned people said that they are not worried that online traffic will share the cake of offline business, "Now the volume of online business is not so large, and in the future it may cover more areas that pharmaceutical companies have not touched." ”
From November 13 to 16, 2023, Meisi, an annual event that aggregates pharmaceutical marketing elites, will be held in Qingdao. At that time, a blockbuster annual report on market trends, consumer insights, and industry hot spot analysis will be released, and several big coffee mentors such as Zhang Jian, former vice president of Cisco China, Xiao Masong, strategic marketing expert, and Zhang Lijun, founder of entrepreneurial yeast, will be invited to bring customer journey, consultative marketing, and team management benefits to the scene, and find new ways out in difficult situations and promote market sustainability.