Real-time learning from Warman-Freed Pharmacy, London

Advances in CCTV technology mean that data captured can now provide insights into customer behaviour, as well as help the pharmacy team discover trends that can be extremely useful when making future decisions

As part of Warman-Freed's refit, the pharmacy team invested in an upgraded camera system with its CCTV partner, MaxTag, to help them better understand customers. The system overlays CCTV imagery with hotspot graphics to depict movement and activity peaks. The technology was pioneered in other retail sectors, such as fashion, and generates visual data in the form of a heat map to provide an insight into the behavior of customers.

Below, the team discusses the positive impact the data has had on stocking, layout decisions, and ultimately the profitability of the Warman- Freed store.

Making adaptations

Data captured from the software is helping the team better understand how customers move around the store and will contribute to the way in which Warman-Freed lays out its fixtures. The cameras provide an invaluable resource to monitor the "hot" and "cold" areas in the store; any cold areas customers do not visit can be repurposed. For example, the pharmacy has recently reduced the general retail offering to create space for more OTC healthcare solutions, which were identified as being more important to customers and generating more sales per meter.

"We're very excited about the potential for these cameras," says Joanna Mills, research specialist at Warman-Freed Pharmacy. "Their data support many different decisions, from the tactical placement of a category to strategic learnings that improve business operations. For example, preliminary comparisons showed that customer activity in the evening focuses on the healthcare counter, while the beauty counters peak in the afternoon. This has allowed us to repurpose our beauty staff, confident that a skeleton staff on the shop floor can advise the few customers who may need assistance."

Computer-generated plan of the pharmacy with an overlay of activity. Key: blue (least activity) > green > red (most activity)

Understanding performance

Sales of OTC products can be the difference between a flourishing business and a failing one. By compiling data from different systems, a comprehensive picture of the successes and weaknesses of a pharmacy can be built.

Farah Ali, general manager at Warman-Freed pharmacy, says: "With the recently announced NHS funding cuts, it's never been more important for pharmacies to balance the clinical needs of the patient with the reality of running a commercial business. OTC products provide a sizeable supplement to pharmacy income, but the range and pharmacy layout need to be considered. By understanding how we can help customers get well and stay well, we can supplement prescription income with relevant OTC products."

Warman-Freed also compared the pharmacy's footfall-to-transaction data and used the cameras to provide additional insight into the customer journey around the store. The team found that sales and visits were peaking on Sundays and after 4 pm, reflecting the pharmacy's business model and competitor differentiator that leads more people to seek out Warman-Freed out of hours.

Ms. Mills recommends that all pharmacy managers calculate their store entry numbers versus transaction ratios on a regular basis and note the effect that different promotions and projects have on performance. The information can also be used to understand the barriers that prevent conversion from entry to a transaction, be it staff/customer interaction, product choice, or pricing. Since the refit, Warman-Freed has calculated a 56 percent conversion rate, which sets a high benchmark for the team to improve in the months ahead.

Comparing footfall and transactions (w/c 18 January 2016)

Planning for the future

Ms. Mills believes that Warman-Freed is already benefiting from the decisions being implemented as a result of the technical analysis. "With the CCTV imaging we finally get to see a more human side to transaction and sales data," she concludes. "The cameras could help us understand why a product or promotion may not realise its expected returns, be it because of unclear signposting or lack of shelf space. The overarching aim is to add value to patients, which will ultimately produce a more profitable and accommodating pharmacy."

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