Apotek 1 adapts to Norway’s evolving pharmacy market

To read a Norwegian version of this case study, click here.

Apotek 1 is Norway’s largest pharmacy chain, with a market share of approximately 40 percent. It employs approximately 3,000 people at 270 pharmacies throughout Norway. The company is owned by Apokjeden AS, which also owns Apokjeden Distribution, a pharmaceuticals wholesaler. Apokjeden is a part of the PHOENIX group, which owns companies that provide pharmaceutical distribution services to most of Europe.

Apotek 1 has a strong emphasis on personal service, assuring the availability of medicines to the public, and ensuring the correct use of medicines. It aims to provide its customers not only with the pharmaceutical products they need, but also with information that helps them take care of their own health. As part of this strategy, it created a website that provides advice for all areas of health and wellness, with articles about the causes, symptoms and treatments of common illnesses, and when to seek medical advice.

Marianne Bækkevold, IT & Business Development Manager at Apotek 1, comments: “Our website was designed to reinforce the message we promote in our stores — that we are not just a drug store, but a trusted advisor that customers can consult about how to make wise health choices and improve their quality of life.”

Preparing for change

When Apotek 1 initially developed the website, it did not have an e-commerce capability because Norwegian regulations did not allow companies to sell prescription drugs online. However, the Norwegian government has recently introduced an e-prescription system that automates the secure electronic transfer of prescriptions between physicians and pharmacies, and as a result, it seems likely that online sale of prescription drugs will soon become a reality.

To prepare for this major change and put the company in a position to serve customers via an online channel, Apotek 1 decided to embark on a Smarter Commerce strategy that would integrate sales and marketing online. The company planned to redesign its website and create a seamless user experience that would lead customers from professional healthcare advice through to the purchase of appropriate products. The new web platform needed to build on the rich content of the existing site and add a flexible e-commerce capability that was capable of meeting both current and future needs.

The right partners

The Apotek 1 team worked with external consultants to create a comprehensive list of requirements for the new solution. The list included more than 300 functional requirements that detailed how the solution should work, and 90 non-functional requirements, such as the level of security the solution needed to offer to protect customers’ sensitive data. The specification document was sent to four software vendors, and after a full comparison, IBM WebSphere® Commerce was selected as the platform for the new solution.

“IBM WebSphere Commerce seemed to be the strongest candidate in terms of both the functional and non-functional aspects of the solution,” says Bækkevold. “We also felt that IBM’s recommended approach to project management and implementation was very good. It wasn’t the cheapest option, but the system is a key part of our strategy and we did not want to compromise on quality.”

A further advantage of the IBM proposal was the availability of local implementation partners.

“IBM was able to recommend Theilgaard Mortensen, a Business Partner based in Denmark,” says Bækkevold. “We have been working closely with the Theilgaard Mortensen team over the course of this project, and it has developed into a very good relationship. We still work with them regularly to support and develop the solution.”

A seamless experience

The new solution is built on a combination of IBM WebSphere Commerce and OpenCMS — an open-source content management system that manages all the advice and information pages on the website. The solution is also integrated with the company’s main back-end systems for product information and order management.

“The concept is that the customer should get the same experience of Apotek 1 whichever channel they choose to use,” says Bækkevold. “If they visit a pharmacy, they can get help and advice from our staff and choose the right products to meet their needs. If they go online, we take them through the same journey with our advice and information pages, which have links to related products that they can buy.

“Equally, if someone searches the site for a product, they can easily click through to the advice pages to learn more about how to use it and find other related information. This joined-up approach helps us market ourselves not only as a pharmacy retailer, but also a source of expert advice about health and wellbeing for our customers.”

Success with customers

The success of the new site has been obvious, with a 20 percent increase in visitors and traffic since it was launched. The Smarter Commerce approach harnesses Apotek 1’s reputation for providing trustworthy professional healthcare advice, using it to market its products more effectively via the new online sales channel.

“Of course, since we are only selling over-the-counter medicines and sundries online at the moment, the majority of our sales still come from customers who visit our stores,” comments Bækkevold. “But as the market changes and prescription medicines become available for online purchasing, we expect to see the website becoming a more and more important channel for our business.”

Taking the next step

Looking to the future, Theilgaard Mortensen has developed a solution based on IBM WebSphere Commerce called Pharmacy Order Manager, which provides business rules to offer products to customers in a more intelligent way. For example, it can detect when a customer is trying to buy two or more medicines that should not be taken in combination, and warn customers about possible side-effects.

“Pharmaceutical retailers have a real duty of care to their customers, and safety is always paramount,” says Bækkevold. “The logic around product recommendations and intelligent offers that Theilgaard Mortensen has developed is relevant for us, and we are very interested in how they can help us analyse product sales and make the right offerings to customers.”

She concludes: “With the help of Theilgaard Mortensen and IBM, we have built a platform for e-commerce that fits exactly with our corporate philosophy ­­— enabling us to show our customers the same high level of service whether they visit our stores or our website. As the pharmacy market in Norway continues to evolve, this solution gives us the flexibility and rich functional potential to maintain our position at the forefront of pharmaceutical retail.”