Brunet  Pharmacies  On  the  cu0ng  edge  of  health Presenta(on  to  the  Board  by  Nanyang  Consul(ng  By  Aswathi  Suresh,  Cory  Reid,  Jonah  Wong,  Sunitha  Vijiyasingam  

1  

Agenda

1.  Problem  Statement  2.  Analysis  of  Challenges  3.  Recommenda(ons  4.  Alterna(ves  5.  Fitness  and  Healthy  Living  6.  Expanded  Product  Mix  and  Accessibility  7.  Virtual  Pharmacy  8.  Key  Performance  Indicators  9.  Financial  Analysis  10. Implementa(on  Roadmap  11. Analysis  of  Risks  12. Conclusion  

2  

Problem  Statement

SHORT  TERM:  Strategy  to  counter  the  threat  posed  by  Target’s  market  entry    

LONG  TERM:  Strategy  to  transform  Brunet  to  be  the  long-­‐term  market  leader  

3  

Analysis  of  Challenges

•  Owned  by  METRO  

•  Pioneering  mobile  tool  program,  “MaSante”  

•  Diverse  product  offerings  –  health,  cosme(cs  

•  Prac(cal  approach  to  marke(ng    

Ø  Impending  market  entry  by  Target  

Ø  Fierce  compe((on,  with  similar  offerings  

Ø  Decreasing  profitability,  increasing  expenditures  

Ø  Customer  loyalty  issues    

Brunet’s  primary  challenge  is  to  differen(ate  itself  from  compe(tors,  with  innova(ve  services  to  retain  customer  loyalty  

SITUATION   CHALLENGES  

4  

Recommenda=ons

Brunet  Pharmacies  should  reposi(on  itself  as  the  champion  for  Preven(ve  Healthcare  

Leader  in  Preven(ve  Healthcare  

Fitness  and  Healthy  Living  

Expanded  Product  Mix  

and  Accessibility  

Virtual  Pharmacy  

5  

Alterna=ves

Rebranding  as  a  Preven(ve  Healthcare  provider  offers  Brunet  the  highest  amount  of  brand  differen(a(on,  without  compromising  on  profitability  

Alternatives Revenues Costs Brand  Differentiation

Ease  of  implementation

Overall

Increase  number  of  storesAcquire  independent  pharmaciesVirtual  PharmacyRebrand  as  a  Preventive  Healthcare  providerExpand  outside  of  QuebecOffer  lower  pricesPartner  with  hospitals

6  

Fitness  and  Healthy  Living

Focus  on  growing  consumer  preference  for  holis(c  health  and  fitness  op(ons    

WEBSITE  OFFERING  

PRODUCT  OFFERING  

PARTNERSHIPS  

•  Revamp  current  website  and  mobile  app  as  a  fitness  portal  •  Info  and  nutri(on  advice  •  Addi(onal  source  of  adver(sing  revenue  

•  Healthy,  nutri(ous  organic  foods  •  Fitness  equipment  

•  Reputable  gyms  with  large  customer  base  like  Gold’s  Gym  •  Cross-­‐pollina(on  of  customer  base  -­‐  access  to  new  customers  •  Promote  the  gym’s  memberships  and  classes  in  Brunet  stores  

7  

Fitness  and  Healthy  Living  |  How

All  stores  will  offer  basic  health  and  fitness  products  and  services,  with  the  Plus  store  formats  offering  addi(onal  differen(ated  products  and  services  

Brunet  Pharmacies  (176  in  Quebec)  

Clinique  and  Clini  Plus  Brunet  Plus  Brunet  

•  Healthy  food  offerings  

•  Basic  fitness  equipment  

•  Trained  staff  to  cross-­‐sell    

•  Product  demonstra(ons  

•  Expanded  variety  of  products  

•  Fitness  Tests  ⁻  Body  Fat  ⁻  Weight  

measurement  ⁻  Blood  test,  

Blood  Pressure  

8  

Fitness  and  Healthy  Living  |  How

The  partnership  with  the  gym  will  be  evaluated  with  the  use  of  a  Balanced  Score  Card  

Balanced  Score  Card  for  Gym  Partner    •  Service  standard  measurement  •  Customer  sa(sfac(on  •  Conversion  rate  of  gym  members  to  Brunet  customers  •  Enrolment  rate  in  gym  classes  •  Cleanliness  of  facili(es  •  Geographical  footprint  of  gym  outlets  

9  

Expanded  Product  Mix  &  Accessibility

Dis(nct  Customer  Segments  

Targeted  Product  Mix  

Enhanced  Product  Accessibility  

Brunet  should  focus  on  improving  product  mix  catered  to  customer  needs  and  product  reach  

10  

Expanded  Product  Mix  |  Customer  Segments

Define  dis(nct  customer  segments  with  very  specific  needs  

Segment  current  customer  base  on  the  basis  of:    •  Age  •  Gender  •  Consumer  

preference  

Fitness  Fana(cs   Healthy  Moms  and  Babies  

Beauty  Conscious   Elderly  

Target  each  customer  segment  with  tailored  products  similar  to  iHerb  

11  

Expanded  Product  Mix  |  How

Product  Mix  

• Only  healthy  products  • Catered  to  different  segments  

Reviews  • Online  product  reviews  from  customers  • Quick  aken(on  to  nega(ve  feedback  

Feedback  Loop  

• Direct  customer  and  employee  feedback  •  Iden(fy  new  trends  and  products  categories  

Selec?on  Criteria  for  Products:    •  All  –  natural/organic  •  Environmentally  friendly  •  Nutri(onal  value  •  Poten(al  health  benefits  •  Relevance  to  consumers  •  High  profit  margins  

Z  Target  product  mix  to  customer  segments  and  allow  for  feedback  to  grow  these  segments  

12  

Expanded  Product  Accessibility  |  How

Z  Fine-­‐tune  distribu(on  system  to  enable  customers  to  easily  reach  and  access  Brunet  products  and  services    

•  Leverage  supply  chain  to  get  bulk  order  discounts  • Kiosks  in  Metro  stores  Metro  

• Pickup  loca(ons  across  city,  based  on  number  of  orders  and  geographical  proximity  to  stores  

Pickup  loca(ons  

• Prepaid  op(on  for  annual  orders  delivered  monthly  

Delivery  op(ons  

13  

Virtual  Pharmacy

Online  Prescrip(ons  

Consumer  Educa(on  

Nutri(onal  Advice  

Expand  online  portal  service  offerings  to  create  a  Virtual  Pharmacy  that  (es  in  with  “Preven(ve  Healthcare”  image  

14  

Virtual  Pharmacy  |  How

Regula(ons  •  Legal  research  to  iden(fy  restric(ons  to  the  senng  up  of  

virtual  pharmacies  •  Drao  pe((on  and  lobby  for  amendment  

 

Staff  Training  •  Pharmacists  not  physically  present  •  Training  to  use  online  conferencing  systems  

and  technology  plaporms  

Consumer  Educa(on  

•  Consumer  marke(ng  through  emails,  website,  mobile  apps  •  Build  awareness  that  consumers  can  print  online  prescrip(ons  

Take  measures  to  improve  legal  acceptance  and  consumer  acceptance  of  the  Virtual  Pharmacy  concept  

15  

Key  Performance  Indicators

Gym  Members  

Promo(onal  Ac(vity  

Nutri(onal  Service  Uptake  

MaSante  

Training  

• Conversion  Rate  from  gym  members  to  Brunet  customers  

• Growth  of  in-­‐store  and  online  promo(onal  ac(vity  • ROI  of  above  

• Pickup  rate  of  nutri(onal  advice  service  

• Increase  in  signups  

• Number  of  pharmacists  trained  

16  

Financial  Analysis  |  Cost  Projec=ons Costs  (CAD)   Year  0   Year  1   Year  2   Year  3   Year  4   Year  5  

 Online  Portal  Development  and  Maintenance     100,000   50,000   70,000   20,000   22,000   24,200  

Addi(onal  Labour  (Pharmacists,  Part-­‐(me  Nutrionists)   10,000   20,000   30,000   190,000   280,000   370,000  

Training  &  Development   10,000   30,000   33,000   36,300   39,930   43,923  

Logis(cs  Costs   0   1,000,000   1,100,000   1,210,000   1,331,000   1,464,100  

Marke(ng  &  Rebranding  Costs   5,000,000   2,000,000   2,000,000   2,200,000   2,420,000   2,662,000  

Addi(onal  Virtual  Pharmacy  Setup  costs   50,000   50,000   50,000   0   0   0  

Total  Costs   5,170,000   3,150,000   3,283,000   3,656,300   4,092,930   4,564,223  

17  

Financial  Analysis  |  Revenue  Projec=ons

Revenue  (CAD)   Year  0   Year  1   Year  2   Year  3   Year  4   Year  5  

Online  Portal  Revenue   400,000   6,000,000   9,000,000   18,000,000   21,000,000   24,000,000  

Online  Portal  Ad  Revenue     0   500,000   550,000   605,000   665,500   732,050  

Trade  &  Promo(onal  Income   0   2,880,000   3,120,000   3,360,000   3,600,000   3,840,000  

Total  Revenue   400,000   9,380,000   12,670,000   21,965,000   25,265,500   28,572,050  

Assump(ons:  Virtual  Pharmacy  in  opera(on  from  Year  3  onwards  60%  takeup  rate  of  Store  Adver(sing    in  Year  one  growing  at  5%  each  year  to  80%  by  Year  5  0.5%  Market  share  for  Online  Portal  Services  with  average  basket  of  CAD  150  annually  

18  

Financial  Analysis  |  Profitability

Projected  breakeven  on  ini(al  investment  in  one  year  19  

Implementa=on  Roadmap Recommenda(ons   Phase  1   Phase  2   Phase  3  

0  -­‐  6  months   7  -­‐  12  months   1  -­‐  2  years   2  -­‐3  years   3  -­‐  4  years   4  years  +  Fitness  and  Healthy  Living      

Marke(ng  &  Rebranding                          

Fitness  Portal  Development                          

Pharmacist  Cross-­‐Training                          

Launch  Portal                          

Expanded  Product  Mix  &  Accessiblity      

Consumer  preferences  research                          

Procurement                          

Delivery  Op(ons                          

Virtual  Pharmacy      

Nutrionist  Hiring                          

Legal  Research                          

Pharmacist  Training                          

Build  Consumer  Awareness                          

Launch  Virtual  Pharmacy                          

20  

Analysis  of  Risks

•  Changing  consumer  preferences  for  pre-­‐orders  

•  Moving  away  from  core  competencies  

•  Ensuring  partners  adhere  to  high  levels  of  service  

•  Legal  complica(ons  with  dispensing  online  prescrip(ons  

•  Addi(onal  cost  for  delivery  service  

•  Lack  of  store  space  for  new  products  

Ø  Flexibility  to  change  orders  in  remaining  schedule  

Ø  Partnering  with  gym  to  leverage  their  core  competencies  

Ø  Balanced  scorecard,  customer  reviews  

Ø  Iden(fy  regula(ons  and  lobby  for  change,  buffer  (me  for  this  change  

Ø  Delivery  service  fees  and  MOQs  

Ø  Experien(al  products  only  at  Brunet  Plus,  also  online  only  products  

RISKS   MITIGATION  

21  

Conclusion

Brunet  Pharmacies  should  reposi(on  itself  as  the  champion  for  Preven(ve  Healthcare  

Leader  in  Preven(ve  Healthcare  

Fitness  and  Healthy  Living  

Expanded  Product  Mix  

and  Accessibility  

Virtual  Pharmacy  

22