More than a million customers buy from Chemist Warehouse each week, selecting from over 20,000 products and spending $5.5 billion a year across its 500-franchisee network. It’s a big business with big impact and classed as an essential service during the COVID-19 pandemic.
While there was a slight drop off in traffic during lockdown, there wasn’t a significant change to the way the organisation operated. And it even managed to keep its cloud-focussed digital transformation schedule on track.
A long-term user of on-premises Microsoft Dynamics AX, the company is now engaged in a business transformation, shifting the dial on customer experiences, supporting its growth and international expansion plans and leveraging the cloud.
Chemist Warehouse will use the complete Dynamics 365 software as a service ERP platform (Dynamics 365 Finance, Supply Chain, Commerce and Point of Sale (POS)) to support its international expansion and underpin plans to roll out an array of health-related services that will create a whole new class of customer experience.
When the pandemic struck and many corporate rather than store-based employees started working from home, Chemist Warehouse’s chief information officer Jules Cardinale wondered whether the transformation would be slowed.
It turned out it wasn’t because people used Microsoft Teams to connect and collaborate, ensuring the transformation stayed on track.
According to Cardinale; “The Teams platform has kept the projects on track. To be honest, we’re probably only a week or two behind where we would have been otherwise. It’s been surprisingly simple as far as the change management process.”
The uninterrupted progress is important as Chemist Warehouse needed the agility of a globally supported cloud-based platform to support its international expansion.
The company established operations in Ireland in 2019, and Cardinale recognised that the best way to support local and international operations as well as the 500 franchisees in the Chemist Warehouse network was for everyone to use the same core information systems and for corporate to secure access to consolidated data.
Dynamics 365 would operate the same way in Ireland as it does in Australia – with localised currency and tax coding requirements handled by Microsoft as part of its international capabilities.
Meanwhile data could be shared internationally, and the unique pharmacy dispensing systems needed in each country to meet specific jurisdictional regulations easily integrated.
Dynamics 365 also manages all the organisation’s B2B interactions, streamlines supply chain logistics, handles the corporate billing of Chemist Warehouse, and then the individual billing of each franchisee depending on what has been ordered.
Serving as an enterprise wide digital platform for the company, Dynamics 365 connects to all its other systems vital to pharmacy retail such as dispensing, point of sale as well as Chemist Warehouse’s bespoke Clinical Care Engine.
The transition to the cloud and Dynamics 365 is important to the company’s growth and expansion plans. “If I go into a new country, the last thing I need to do is purchase hardware, set-up servers and provide services that way. I can just consume them,” says Cardinale.
That frees his team to focus on value adding innovation. This includes developing applications using Microsoft’s low-code to no-code Power Apps platform that empowers organisations to develop apps themselves. Chemist Warehouse will initially focus on Power Apps designed to deliver a new level of customer service and wellbeing.
The Chemist Warehouse Clinical Care Engine that Cardinale and his team have developed is designed to provide valuable health information for a customer. The system analyses what is in a customer’s basket and identifies potential risks for the customer, such as contra indications between different medicines or products that a customer buys.
For example, a customer might have an item in a basket known to cause stomach upsets, as well as an item to ease a stomach upset. The Clinical Care Engine can alert the pharmacist to these examples of so-called ‘poly-pharmacy’ where a customer buys a product to ease a condition caused by another product. Armed with that insight the pharmacist can advise the customer about their best course of action.
Cardinale is now exploring how it might be possible to integrate AI and use a customer’s unique data to provide extra insights about health and wellbeing.
Cardinale envisages integrating additional health services in the app – for example a service called Helfie, currently seeking approval from the Therapeutic Goods Association, which uses AI to determine risk of melanoma. This would allow Chemist Warehouse customers to upload a photo of a mole and powered by AI computer vision receive a recommendation as to whether they need to see a doctor about it.
“The main reason to leverage the Dynamics 365 platform is time to value-add. The mantra for us is scalability, agility – they’re the two things that we bear in mind with everything we do. It’s really to be able to provide a better experience to the customer. “
That extends also to offering a true omnichannel retail experience. Integrating Dynamics 365, supply chain information and the business to business platform means Chemist Warehouse will have transparency about which products are on order, who is delivering what, when it will be delivered, who has ordered it.
That will help streamline delivery, and also pave the way for Chemist Warehouse to expand its online customer offering from click and collect to click and deliver, while the customer experience at the point of purchase (whether in store or online) is made as friction free as possible.
“We deal with over a million customers a week. So every little interaction adds up greatly.” The way he’s thinking is that instead of giving a customer waiting on a prescription a pager to let them know when it’s ready, the Chemist Warehouse app would handle that.
“For us, the customer has to be the focus. The reason you need Microsoft Dynamics 365 CRM is that, as part of the platform, it becomes a source of the truth as far as the customers concerned. The data, everything, every interaction with that customer goes in there.”
That, says Cardinale, has benefits for customer and business alike.
“Now you can analyse that, and you can make it much more focused, make the experience a much more relevant one. I think you provide good services and good product and a great range, and good pricing, and the rest takes care of itself,” says Cardinale.
“The guys market well. They get the best prices they possibly can, but then it’s all down to making the customer experience as frictionless as possible. So if you want to order and get it delivered, we can do that. If you want to order and pick it up, we can do that. There’s lots of different options.
Cardinale believes that the introduction of e-Prescriptions will deliver another significant improvement for customers, allowing them to essentially click and collect medicines instead of having to stand in line waiting in the pharmacy.
The move to electronic prescriptions injects a new level of flexibility, allowing patients to decide where and when to have scripts filled, and whether to collect them in person or have them delivered. The value of this degree of choice has been thrown into sharp relief by the COVID-19 pandemic when many people were reluctant or unable to venture out to the shops and preferred ordering goods and services online.
The enhanced transparency across the Chemist Warehouse also means that customers who need medication that may be in scarce supply can benefit from the ability to scan the entire network and find stocks of that medicine that can then be transferred to them.
“The next part is really moving it around in a much more seamless way. Omnichannel is about receiving or buying or receiving goods or buying goods from us in any way you want. The easiest way for you. Click and collect, click and deliver, and a number of other initiatives that we’re looking at.”
Through the partnership with Microsoft and adoption of cloud services Chemist Warehouse is emerging stronger in the face of COVID to offer customers and their employees safe, secure and convenient experiences at global scale.