Online success for Christchurch shop
Pharmacy owners Jeff Ross and Keith Meyer have moved a large part of their sales online as a response to walk-in retail business being disrupted by the Canterbury earthquakes.
Using online sales, as well as a bricks-and-mortar retailing model, meant they could distribute many more items than held as stock in a smaller store, Ross said.
Customers, particularly from Christchurch's eastern suburbs, did not travel to access pharmaceutical supplies as easily after the quakes, given the rocky state of the city's roads.
Now many online sales, based out of stores, including the Staveley St Pharmacy in Avonhead, were being made outside the city to destinations such as Auckland's North Shore, and even overseas.
Ross said the stores, which worked through the Health Express brand online, could deliver nationwide within one to two days. The website went live in August last year and the business now stocked more than 8000 items.
Ross was a part-owner or director of pharmacies in Invercargill, Dunedin, Wanaka, Timaru, and Christchurch, including one in Sydenham damaged by silt and water from liquefaction in the February 22 earthquake.
That store in The Colombo shopping complex was closed for seven weeks, impacting the business. "It basically took well over 12 months to get back to our [previous] turnover," Ross said.
The September 2010 earthquake had also made people cautious about travelling, Ross said.
"It's interesting at that stage on some of our websites we noticed a big upsurge in orders from Christchurch, especially from the eastern suburbs, because people couldn't get out of their houses.
"A lot of people turned to online to do their purchases."
The company spent only a small amount a month on Google's AdWords, which Ross credits as getting the venture its first sale within 24 hours of the site starting. Online growth is now dramatic. "This came about through our use of Google AdWords. The significance of AdWords for us is we can grow the ecommerce side of this business at about 10 to 15 per cent per month [in terms of revenues]."
He said, in general, he thought of retailing as being the art of finding what people wanted, then giving it to them.
Ecommerce sales more commonly involved larger items. The likes of toothpaste were not sold online. Rather, it was items such as blood pressure monitors or equipment to improve circulation, worth several hundred dollars.
"[Pharmacy sales are] quite price-competitive. So if you're in a retail environment where you're paying huge rentals, you need a high margin to get the same bottom line. If you're in an environment like this [Staveley St] with lower overheads, you don't need the same margin, so you can be more price-competitive."