Pharmacies become care hubs as online competition grows

Large pharmacy chains are expanding vaccination and pharmacist consultation rooms to build customer loyalty and differentiate their physical stores as medication sales grow through apps and e-commerce platforms. Although health services still account for a small share of revenue, companies report they are linked to more frequent purchases and higher customer spending.

Luiz Guanais, a retail and consumer analyst at BTG Pactual, believes the services help chains attract customers. “Any way of differentiating your physical store ultimately helps attract more consumers,” he said. Vinícius Strano, executive director and head of research at UBS Banco do Brasil, noted that their main contribution is not direct revenue generation. “It is more of a mechanism for keeping customers in the store and building loyalty.”

Members of the Brazilian Association of Pharmacies and Drugstores (Abrafarma), which represents large industry chains, operate 9,248 rooms offering pharmacist services. According to association CEO Sérgio Mena Barreto, the challenge now is to make better use of the infrastructure already in place. “The physical investment has been made, and it does not appear to be the main constraint today,” he said. “The challenge now is primarily to increase the productivity and use of this infrastructure.”

Valor interviewed the four pharmacy chains listed on Brazil’s B3 exchange—RD Saúde, which owns the Raia and Drogasil brands, Pague Menos, Panvel, and d1000. The companies identified increasing the use of existing rooms and integrating them with digital channels as priorities.

RD Saúde expects to make progress “by expanding the services offered, increasing the use of existing rooms, and integrating physical and digital channels,” said Juliana Cervan, the company’s health services director. At Panvel, “the focus is on increasing the productivity of existing infrastructure,” according to Adriana Vasco, executive manager of new businesses.

The strategy comes as digital channels account for a growing share of sales. In the second quarter, they generated 33.7% of Panvel’s retail revenue, 31% of RD Saúde’s sales, and 24.1% of Pague Menos’s revenue, according to the companies’ financial reports.

Mena Barreto believes e-commerce expansion reinforces the importance of in-person services. “The more transactional the purchase of medication becomes, the less a physical store needs to serve merely as a place for transactions and the more it can become a space for care.”

Marcelo Cardoso, vice president of d1000, also sees the channels as complementary. “Digital channels meet growing demand for convenience and speed. Health services, meanwhile, depend on proximity, trust, and human interaction.”

Pague Menos illustrates this integration through sales of GLP-1 analog medications. This class includes injectable pens used to treat diabetes and obesity. About 60% of these products are sold through digital channels, according to the company’s financial report. The chain offers free medication administration and body assessments to customers who buy the pens. “Customers purchase through the app or website and, when they collect the product, find a health care structure that can meet other needs,” said Marcel Desco, the company’s vice president of customers and marketing. Store pickup accounted for 49% of the chain’s digital orders in the second quarter.

The services still account for a small share of revenue. In the second quarter, they represented 0.2% of RD Saúde’s sales, 0.4% of Pague Menos’s revenue, and 1.4% of Panvel’s retail revenue. The companies argue that returns come from purchase frequency and customer spending.

Panvel Clinic users make purchases more than 3.5 times as often as other customers and spend four times as much annually, Vasco noted. At Pague Menos, customers who use pharmacist consultation rooms buy about 2.4 times as frequently and spend 3.3 times as much as standard customers. The company stressed that the data shows an association between service use and a more recurring relationship. At d1000, users spend 10% more and shop 15% more frequently. RD Saúde monitors these indicators but does not disclose the figures.

Mena Barreto argues that the economic value of the services must account for their effect on customer relationships, not only direct revenue. “Sometimes a service loses money and is not profitable, but at the same time it builds patient loyalty,” he said. “Those effects cannot be calculated separately.” Guanais of BTG Pactual added that the extra revenue can also help cover fixed costs, such as rent and employees, in a low-margin business.

Vaccination is the fastest-growing service. According to Abrafarma, Clinicarx, a platform member chains use to record and monitor pharmacist services, registered a 74% increase in doses administered in the first half of the year. RD Saúde administered 470,000 vaccines during the period. At Panvel, vaccinations account for 80.3% of service revenue and grew 15.1% in the second quarter.

The chains’ next step is to turn one-time visits into continuous monitoring, particularly for patients with chronic illnesses. Panvel cited cardiovascular and metabolic conditions, including diabetes and obesity, as “important opportunities.” Pague Menos listed blood glucose, glycated hemoglobin, and lipid profile tests among its priorities.

The expansion of consultation rooms is also accompanying new store openings. According to Vasco, virtually every new Panvel location now opens with at least one service room as part of the chain’s plan to reach 1,000 stores by 2030. D1000 plans to increase the number of stores offering pharmacist services from 138 to 160 in 2027, Cardoso said. RD Saúde and Pague Menos do not disclose specific targets or investments.

Guanais believes growing e-commerce competition will be one of the variables investors “closely scrutinize” over the coming quarters. Mena Barreto identified another challenge for the chains: increasing consumer awareness of the services available in stores. “A significant share of the population still does not know everything they can do inside a pharmacy.”

*By Vitória Nascimento — São Paulo

Source: Valor International

https://valorinternational.globo.com/