Article Published by Chain Drug Review
For something that didn’t even exist a decade ago, digital strategy is surely one of the hottest business conversations today.
Theories and best practices abound, and the multiple paths that run simultaneously along subtopics such as platforms and digital devices, content and customer experience play a role similar to that of each voice in a Bach fugue: every individual voice travels along its own independent path but, together, the voices add up to a complex contrapuntal texture. They weave in and out, sometimes one voice in the forefront, other times receding into the background. And taken together, these digital functions form an integrated whole.
While digital strategy combines many functions, the essence of it comes from outlining an organization’s vision, goals, opportunities and related activities. The purpose of it is to optimize the business benefits of digital initiatives to the organization.
A key pursuit, then, is honing each component that contributes to the entirety. And like any set of functions that might exist independently, taken together they gain a higher purpose. As the organization grows, at its best digital strategy must be malleable and adaptable, and must continue to evolve.
ObjectWave built its first e-commerce site 16 years ago. At that time, e-commerce was in its infancy. It was more of a convenience that extended traditional channels — a far cry from what it has become.
By contrast, companies today are undergoing entire digital transformations, looking at their overall corporate strategy and incorporating a digital strategy that complements the corporate’s in its entirety. That’s because digital commerce is no longer just a nice feature to have — it’s the sine qua non, an absolute necessity. In fact, for many businesses it is viewed as the future channel of growth.
This should not come as a surprise. Digital technology is cheaper to develop than traditional channels, and it is dynamic and able to change as your customer’s preferences change. Adapting new capabilities becomes easier and more fluid.
Digital strategy should be an extension of the overall corporate strategy. At times it could be a way of finding new types of customers. In the case of Farmacia San Pablo, e-commerce is a new way to serve existing customers while appealing to a broader demographic.
Farmacia San Pablo differentiates itself through customer service and the wide variety of products it offers its customers — therefore, its digital strategy must organize itself around those attributes, and be at the service of that brand promise.
With more than 80 stores in Mexico City, Farmacia San Pablo had already found an exceptional way of serving its customers via traditional channels. Taking prescriptions over the phone and delivering those medicines to the customer within one hour is an example of exceptional customer service. With service as their mantra, they’ve constantly worked to improve their processes and offerings in the customer service realm.
Each one of their stores has become a distribution center for their products, further enabling their excellent delivery capability. However, as the digital mandate started to come into clear focus, they knew they needed to do more.
Three years ago Farmacia San Pablo hired a management consulting company to develop a digital strategy. Their key objective was to transform the way they serviced their customers in Mexico’s ever-changing, ever-evolving health and wellness landscape. And along with this, they were looking to grow their business. Their customer demographic was changing; they were aware of this, and knew they would need to appeal to a new type of consumer. Digital commerce became part of their road map, and they began their digital transformation — a process that is ongoing today.
We started working closely with Farmacia San Pablo when it was time to implement their digital strategy road map. This included digital technologies built on the SAP Hybris e-commerce platform, complemented by smartphone technology and other ancillary digital commerce technologies. Their plan was comprehensive, with a substantial investment that was further sponsored by Farmacia San Pablo’s ownership.
In the end, to execute on the digital strategy, the company needed to undergo an actual digital transformation. While this may sound like jargon, the problem was that they had disparate systems that communicated between themselves in a fragmented way — definitely not an acceptable state of affairs in the digital world.
They adopted a point-of-sale system called Wincor, which communicates with a fresh implementation of an SAP ERP (Enterprise Resource Program) system. This in turn communicated with SAP Hybris, the e-commerce platform owned by SAP. While that sounds like a lot of acronyms, the synchronous communication between these differing technologies allowed for a system that could support customer interaction with the business.
You have probably experienced a checkout process at a retail store where the cashier knows who you are, asks you if you want your receipt emailed to you, and seems to know certain highly individualistic information about you. That’s an example of how the dots are connected in a digital world, where the retailer can deliver service that appears to be at the level of reading the customer’s mind.
Digital strategy takes a path that is complementary to the existing corporate strategy, and either leverages existing technology or requires developing new technologies. Digital commerce isn’t simply about building a website and enabling consumers to buy online only — it encompasses having the ability to deliver a digital experience that is consistent with your customers’ expectations.
Digital capabilities like targeted promotions, in-store pickup, targeted health care information that is specific to the individual and delivered via such multiple platforms as mobile, desktop or even kiosk complete the omnichannel experience. In the case of Farmacia San Pablo, digitally enabled one-hour home delivery has become a hallmark of their strategy.
With digital commerce comes all the challenges experienced by traditional commerce having to do with customer interaction. The trick is appealing to their preferences and finding innovative ways to use digital technology to serve them.
For example, we’re beginning to see an emergence of technology that crosses digital with traditional channels to serve a customer. One such innovation is beacon technology, the ability to interact with your customer’s mobile device within three feet of their location, bringing the digital experience literally into the aisle.
When beaconing is coupled with a robust e-commerce capability, you can serve that client on a super-personal level. The beacon conducts a digital conversation with the client, allowing for targeted promotions, individualized discounts or simply targeted information. Imagine shopping in the aisle of a Farmacia San Pablo store and getting a beacon message reminding you to refill a prescription you take regularly. Or a promotion with a coupon on a complementary product you are viewing in the aisle. Or simply an informational message assisting you while you’re in the store. This is possible because the beacon creates the digital space for a conversation between the e-commerce platform and the consumer.
While beaconing is still in the future, Farmacia San Pablo currently uses mobile commerce to serve its customers. Their mobile application allows you to order through your smartphone. It can scan a barcode of a given product, smoothing the way to ordering it. Existing mobile technology will soon be used to take a photo of a prescription and route the image to the pharmacy for filling. This is another leading-edge way Farmacia San Pablo is offering their customers the ease of digital commerce technology.
Digital transformation within the retail pharmacy landscape comes with its own set of challenges. Choosing the right components to implement on an e-commerce and digital platform is critical to long-term success. Aligning existing processes, regulations and human resources to the omnichannel experience is where the real magic lies.
Most retailers are successful because they have fixed processes in place that generate results, based mainly on repetition and execution at the point of sale. When moving into the digital arena, retailers will need to become more agile, learning to adapt all their customer intelligence to digital platforms in order to render to their day-to-day operations.
For Farmacia San Pablo, transformation means being where the customer needs them. To this end, digital becomes an enabler, ensuring that the company has the right tools to empower employees to deliver world-class service at every customer touch point.
All of these conveniences are possible with current digital commerce technology. A digital strategy thus is no longer a luxury, it’s an imperative. If you don’t get on board with this thinking now, your competitor will. And it’s very easy to lose customers to the intoxicating power that technology gives them.
Co-Author: Gabriela Gutierrez is director of marketing and digital at Farmacia San Pablo, and a board member of Grupo San Pablo.