The Australian Financial Review is the equivalent of The Financial Times in the UK. Recently it did an analysis of the Chemist Warehouse, Australia’s private pharmacy retailer.
The reporters claim that the Chemist Warehouse has built one of the largest advertising businesses in Australian with $600m revenues through its retail media division, which now accounts for 20% of the company’s sales.
Chemist Warehouse retail media division includes everything from an in-house ad agency to TV and radio programming,
- The Retail Media proposition includes the usual in-store displays, digital screens, and sponsored products and search on its website.
- Chemist Warehouse operates its own media buying agency, Strat, which manages about $130 million in billings and serves other Aussie retailers such as The Good Guys and TGI Fridays
- The company runs a “The House of Wellness” weekly TV show on Channel 7 TV that reaches 175,000 viewers. Segments on the show are sold to suppliers, and the brand has expanded into print with a quarterly magazine and radio programming
Jonathan Hopkins, founder of consultancy firm Sonder, is quoted in the article as saying that Chemist Warehouse is “one of the pioneers of the magazine, TV show, radio and digital platform. They seem to me to be shrewd operators who wouldn’t do media at the expense of their customers. They’ll do it in a smart way.”
Of course, Chemist Warehouse are not on their own. Rival pharmacy chain, Terry White Chemmart, is the largest pharmacy chain in Australia, with more than 600 stores. It recently launched its own Retail Media arm called “TWC Connect”.
TWC has recently upgraded and integrated its Rewards Plus loyalty program of more than 2 million members, into the brands myTWC app. They also announced a partnership with Zitcha to deliver an enhanced customer experience through greater segmentation, targeting and personalisation at scale. TWC Connect also promises closed-loop attribution through Zitcha’s platform to enable greater visibility and performance on advertising spend.
Elsewhere in the world, CVS and Shoprite in the US already have Retail Media business, as does Boots in the UK. AS Watson Group out of Hong Kong is the world’s largest health and beauty retailer, operating over 16,000 stores across 29 markets. Their well-known retail brands such as Watsons, Superdrug, and Kruidvat have also launched an RMN called Optimo.
The suppliers to CVS, AS Watson or Terry White Chemmart have a different profile compared to those working with grocers and, of course, they have a different customer experience, average order value and shopper missions. All of these combine together to make RMNs for pharmacy and health a vertical to watch in Retail Media.
