API is competing in the pharmacy retail space by boosting its health and beauty offering, claiming to have Australia’s biggest loyalty program in this area with 7 million members
Clever marketing, cult beauty brands, social media presence… Priceline is launching a retail takeover by offering a one-stop shop for women to cover both their beauty and health bases.
The banner group is harnessing the power of social media, in-store promotions and television advertising, boasting that its marketing reaches 93% of women over 18.
A new advertising campaign that hit television screens over the weekend plays on a popular phrase to make shoppers feel at home: ‘there’s no place like Priceline’.
The group also holds events to attract social media ‘influencers’ to its brands, one such event being The Beauty Prescription [LIVE], held in Sydney twice a year.
These strategic events get Priceline’s name and products into the hands of popular bloggers and vloggers, who then go on to spruik the brands and the chain.
They say their point of difference is providing a huge beauty range, at an affordable cost.
While their products may not always reach the same low prices as some big box discounters (although they do hold big sales from time to time), Priceline Pharmacy believes it offers value as well as exclusive access to new products.
“We have an unrivalled range with 17,000 products across both health and beauty,” says Tamalin Morton, who is nearing one year in the role of General Manager of Priceline Pharmacy.
“We offer new exclusive cult favourite products and all at affordable prices.”
Priceline Pharmacy quick stats
- Priceline has 475 stores – 334 (70%) of which are Priceline Pharmacies
- 5300 cosmetic products stocked at Priceline Pharmacy
- 2140 skincare products stocked at Priceline Pharmacy
- 1550 haircare products stocked at Priceline Pharmacy
- 400 baby care products stocked at Priceline Pharmacy
- 1000 vitamins & supplements stocked at Priceline Pharmacy
- Top 3 brands with most growth: Antipodes, La Roche-Posay, Avene
- Men’s haircare has grown by 56%
- Priceline sells a Schwarzkopf product every 20 seconds
- Priceline Pharmacy sells a Swisse vitamin product every 35 seconds
Australian Pharmaceutical Industries (API) CEO and Managing Director Richard Vincent, who has been with the pharmaceutical distributer, retailer and manufacturer since 2005 and in his current role since February 2017, says Priceline has the challenge of keeping up with new trends and offering different products.
“Customers keep changing and keep evolving and looking for something different. The beauty of Priceline is that you always have something new and exclusive coming through,” he told AJP.
“But if you don’t have that ‘newness’ and you don’t have those cult brands coming through, particularly in the front of the store, then you lose your relevance with the customers.”
Another key issue is competing in the same space as pharmacy discounters.
“There’s a lot of discounting in the market, so as much as you need new products and you need exclusive products, you need to make sure you’re providing value,” said Mr Vincent.
Does he believe Priceline is providing value in a market dominated by big box discounters such as Chemist Warehouse?
“Absolutely. You can see from the people that are here and the excitement amongst all of these influencers that they see real value in the brand, they’re really connected to the brand.”
In May this year, ABC show Gruen looked at Chemist Warehouse’s advertising strategies, describing it as “more media empire than chemist”.
The show’s panel expressed dismay at the potential demise of the local pharmacy, with businessman and TV personality Todd Sampson saying that nobody would be able to beat ‘Australia’s cheapest chemist’.
“The only thing that beats lowest price here is ‘free’, and that’s not going to happen,” said Mr Sampson.
“Nothing beats lowest price. We are the ‘down down’ capital of the world.”
However marketing expert Cam O’Keefe from GTB praised Priceline for its marketing strategy, and said it could really lead to success.
“Priceline have built their business around serving the health and wellbeing needs of women, and they’ve actually marketed or made ads that deliver to that strategy,” she said.
“And it’s really refreshing for me to see this because it’s a debate you have with clients a lot.
“The default position is to appeal to everyone… But the truth of it is there’s power in appealing to your core audience.”
This is a sentiment that the Priceline team agrees with.
Earlier this year, when AJP asked whether Priceline Pharmacy was keeping up with Chemist Warehouse, API’s Head of Industry and Corporate Affairs at Australian Pharmaceutical Industries Rob Tassie responded: “It’s really important that we’re differentiated from discounters like Chemist Warehouse.
“It’s not necessarily about keeping up, it’s about being certain of what we are and differentiating ourselves.
“We’ve got our customers, we know what they want, and we need to make sure we service them.”
Ms Morton agreed.
“We are very different, the elements when you look at the customer database and insights that we have, the brands that we offer and the services that we offer in store, it’s a different proposition.
“And we need to stay focused and true to that and to our customers and their needs.”
Priceline shoppers are loyal, she says.
Their Sister Club of over 7 million members means Priceline has “Australia’s biggest health and beauty loyalty program”.
Meanwhile the brand is ramping up its strategy to dominate the beauty space, having recruited almost as many beauty advisors as pharmacists.
Across its 475 stores – 334 (70%) of which are Priceline Pharmacies – the group has recruited 1000 pharmacists and 650 beauty advisors.
They recently partnered with Napoleon Perdis, its first ‘prestige’ beauty brand.
Such prestige brands are usually only available in department stores and cosmetics stores, but Priceline has now branched out into the market.
Ms Morton explained: “The mass shopper is really buying into prestige, and we’ve starting to see that in our stores.
“Prestige now represents more than 50% of the beauty market and it’s growing really quickly. We’ve also seen sales increases in skincare and in our fragrance, and again particularly in the prestige brands of fragrance.
“We’ll continue to expand into areas that we know our customers love, such as prestige.”
When announcing the partnership, Mr Perdis said: “Priceline Pharmacy has a reputation as a beauty playground and my range and new products fit perfectly with people who are looking for that exceptional beauty experience in hundreds of locations across Australia.”
Mr Vincent says beauty will continue to be a big part of what Priceline and its pharmacies offer, although they are not without competition.
“There’s some fantastic other retailers in the market like Mecca and Sephora in the beauty space, so they keep us on our toes,” says Mr Vincent.
Meanwhile the group also wants to be known for its health programs.
“In the dispensary and health areas, the main challenges are around all of the health programs that we’re rolling out and doing those really well across the store. We had a vaccination program this year that we doubled the number of vaccinations that we did [compared to the last year] which is great, and it was a really big flu season,” says Mr Vincent.
“We do Women’s Health Checks, we’ve got our health stations across our networks as well.
“What we’re trying to do is get people to think about their health and think about their wellness.
It’s about “doing those [health] programs and doing them well,” says Mr Vincent, “so that we’re known as much for health as we are for beauty.”
“And then in the middle of our store we’re combining the two [areas of beauty and health], so you’ll find a whole range of wellness categories and naturals – which is the big trend in products that don’t have parabens and other ingredients in them – so that’s what our focus is.”
Priceline Pharmacy have a new app launching later this year which Ms Morton says “will strengthen our pharmacy-patient relationship”.
It has also seen more than a million people use their digital health stations.
Ms Morton says they want people to keep coming back and using the health stations “again and again”, so that they can see the progress in their health.
“And the critical piece is getting the pharmacist out there and talking to them,” she said this year.
“If they build that relationship at a local community level, [patients] can keep going back in and trialling it.”