Diversifying retail pharmacies in the Nordics to drive growth

Urbanisation, decreasing fertility rates, and increasing life expectancy are reshaping the demographic landscape of Nordic regions, posing challenges to the Nordic welfare model and necessitating adjustments in urban and rural planning. The ageing population trend is set to continue until at least 2040, requiring policies that promote health and wellbeing for the elderly and adaptations to accommodate an age-diverse society.

This demographic shift is addressed by the Norwegian Helsepersonellkommisjonen (Health Personnel Commission) in the report Tid for handling. The commission clearly states that despite increasing demand during the next decades, the healthcare sector cannot continue to grow, as all sectors will experience a shortage of work force. The commission also suggests that a transformation of the healthcare sector is necessary, such as better utilisation of the available health and care workforce, and the increased use of technology and digital solutions. Regarding pharmacies, the report points out that pharmacists should have a more active role in the healthcare sector so that their expertise can be better utilised, while at the same time relieving other professional groups.

Right now, there is a significant opportunity for Nordic pharmacies to reimagine their role within the broader health ecosystem. There’s some great work already happening in the space – and lots to learn from other nations.

So how can retail pharmacies across the Nordics ease pressure on health systems to drive better patient outcomes while also improving the customer experience to accelerate commercial growth?

Create new health services aligned to empowered consumers

Traditionally confined to dispensing medication and selling health-related products, Nordic retail pharmacies can create new commercial opportunities by introducing a range of add-ons and complementary health and lifestyle services. Outside of the Nordics, we have seen successful initiatives to diversify health services such as Rite Aid’s Rewards 65+, a point-based loyalty scheme that rewards customers with a choice of health-related services and products, and Kroger’s app that helps rate nutrition choices to support healthier lifestyles or dietary needs. Sweden’s largest pharmacy chain, Apotek Hjärtat, offers digital-enabled member services, while Apoteksgruppen has ventured into beauty services such as ear piercing, proving diversification doesn’t have to mean digital.

The retail pharmacies responsible for rolling out these non-traditional offerings have successfully responded to key trends such as demographic development, healthier choices, and subscription-based business models like those offered through member reward apps. With new types of services, Nordic pharmacies can capture a broader market but also position themselves as more integral players in overall wellbeing. Furthermore, developing and offering new services is a smart way to segment specific demographics to better meet the diverse needs of a customer base through personalised care.

Diversify services through non-traditional partnerships

Forging collaborations outside of the traditional retail pharmacy industry increases the ability for health and wellbeing services to seamlessly connect. Many large retailers, for example, have partnered with retail pharmacies to offer in-store pharmacy services, helping to create a more unified customer experience. There is inherent value in amplifying services through non-traditional partnerships, as we’ve seen between Walgreens and Alibaba, where the pharmacy giant launched a store on Alibaba’s global platform to sell its beauty brands. In another example, Boots UK has partnered with Macmillan Cancer Support, which sees the charity provide bespoke training to thousands of Boots UK pharmacists and its No7 Beauty Advisors. This allows Boots UK to better support its customers living with cancer and direct them to further help.

The expertise of each organisation plays a unique role in the wider health and wellbeing of consumer needs and each organisation gets access to a wider consumer base to sell existing products and services. In particular, retail pharmacies also get access to even more consumer data, which they can leverage to design new or more targeted services.

By strategically integrating different external services, pharmacies become one step closer to achieving and occupying a place in the market that is now mostly vacant in the Nordics.

Drive value within the wider healthcare system

There is an open position in the Nordic competitive landscape to provide enhanced accessibility and more convenient consultations for consumers. As a strategic entry into the public health space, expanding services to encompass basic diagnostic tests and consultations is one way to meet this opportunity and drive growth. This has proven successful in other nations, for example, Lloyds Apotek in Sweden collaborating with digital private healthcare provider KRY, CVS’s Minute Clinics in the US, and Pharmacie Lafayette’s stop smoking programme in France.

Today, we also see a trend where both hospitals and municipalities increasingly involve pharmacists in clinical work related to medication management and treatment, both at the system and individual levels. Experience shows that pharmacists' efforts improve the quality of medication management, thereby enhancing patient safety. While larger hospitals and municipalities are likely to employ their own pharmacists, smaller municipalities and healthcare providers may find it advantageous to collaborate with local pharmacies for medication management services.

Pharmacies' role in supporting the correct use of medications is significant as studies indicate that around 20 percent of acute hospital admissions can be attributed to medication-related issues such as side effects and misuse. Pharmacies possess important expertise that can be utilised to take a more active role in medication dispensing to ensure proper medication use. This service can also be continued after the medications have been dispensed, and guidance can be provided digitally, both synchronously and asynchronously, through video and apps.

In Norway, there are currently two state-funded pharmacy services: inhalation guidance for asthma and COPD patients, and initiation guidance for patients with cardiovascular diseases, with the former being permanent while the latter is in a trial phase. If these services prove to be cost-effective over time, there are significant opportunities for expansion into new areas.

Use existing competitive advantage to create more accessible health hubs

While the integration of new services is essential for the evolution of Nordic retail pharmacies, it's crucial to recognise their existing competitive advantages. The physical presence of Nordic retail pharmacies is an asset that positions them as accessible healthcare hubs. This is a clear benefit in terms of integrating new services. Pharmacies can serve as crucial touchpoints within certain communities and become more accessible than visiting the doctor due to location and shorter wait times. Leveraging this geographical advantage is paramount for the seamless integration of new services and enhancing customer convenience.

Across parts of the Nordics, the existing competence of pharmacy staff is also an under-utilised and a valuable strategic asset. Their expertise can go beyond traditional medication dispensing to supporting faster diagnostics and triaging some medical conditions. Their unique role within local communities makes them a trusted resource to provide confidential and personalised guidance and advice. By amplifying their competence and position in the community, pharmacies can ensure a natural extension of their role in providing enhanced healthcare services and strengthening collaborative initiatives within community health.

The heart of a nation’s health and wellbeing

Nordic retail pharmacies have significant potential to expand their role in the healthcare system. This lies not only in innovative services but also in the strategic optimisation of physical locations and the expertise of trained pharmacists and pharmacy staff. By maximising these existing advantages, pharmacies can seamlessly integrate new services, becoming integral components of comprehensive healthcare within the Nordic region. This strategic vision aligns with the evolving healthcare landscape, positioning retail pharmacies as leaders in shaping the future of healthcare in the region.