In response to the changing demands of consumers and a record peak in online orders during COVID-19, Australia’s largest pharmacy retailer, Chemist Warehouse, has teamed up with Cohesio Group (Körber) to launch a same-day delivery service for its 1.5 million weekly customers.
As soon as COVID-19 reached Australia, many business operations came to a complete halt. However, as one of the largest pharmacy retailers in Australia, Chemist Warehouse had a critical role to play in providing the nation with access to essential health and beauty products.
Established in 2002, Chemist Warehouse has grown from one single shop in the inner Western suburbs of Melbourne to the retail giant it is today, operating more than 500 stores across the nation.
Now Australia’s largest pharmacy retailer, Chemist Warehouse serves more than 1.5 million customers and dispenses almost a million prescriptions per week.
Click and Collect to Click and Deliver
Chemist Warehouse has been working with Melbourne-based technology provider Cohesio Group since 2017. Chemist Warehouse deployed Cohesio’s dedicated retail software, Ignito, to power its Click and Collect processes across its 500 plus stores.
Cohesio Group developed Ignito in response to the rise of online retail. Recognising that retailers need the ability to have real-time visibility on stock levels both front-of-house, across the network and in their warehouses, the software provides full supply chain visibility as well as sales trends and actionable insights into consumer behaviour.
“Ignito is a powerful workflow optimisation software that integrates with every part of the supply chain. It collects data from multiple sales points, automates administrative and stock-related tasks and facilitates click and collect processes,” Rizan Mawzoon, Head of Transformation at Cohesio Group says.
Chemist Warehouse stores are unique in that they tend to be very large facilities and hold a huge amount of inventory. Cohesio recognised that this created the perfect opportunity to fulfil orders in store, rather than from a central distribution centre (DC).
Ahead of the trend: Micro-fulfilment
Since introducing Cohesio’s Ignito software solution in 2017, the retailer has increased order fulfilment throughput rates by up to 30 per cent.
“With the new Click and Collect and online delivery solution, if a customer is based in rural Victoria for example, the order is fulfilled by their local store instead of coming from a central DC. This gives the customer a much faster option for collecting their order,” Rizan says.
Cohesio Group rolled out the software across all of Chemist Warehouse’s stores, giving customers across the nation access to faster collection options.
When COVID-19 hit Australia, Chemist Warehouse recognised that its customers needed a risk-free solution to receive online orders at home, instead of coming into the store.
“We wanted to ensure that we could offer our customers the safest possible option to shop during COVID-19 restrictions. We knew that for many they felt it was a risk to leave their homes and shop in the traditional way, so we approached Cohesio Group to help us develop our existing Click and Collect solution to become a Click and Deliver solution,” Mark Finocchiaro, Managing Partner and Director, Chemist Warehouse Group says.
In less than four weeks, Cohesio Group transformed its Click and Collect program to include Click and Deliver.
“During COVID-19, Chemist Warehouse experienced a huge increase in online orders. On top of this there was a requirement to reduce the amount of people coming into the store, while still offering the same level of service,” Rizan says.
Chemist Warehouse wanted to offer customers same-day delivery service, and the only way to get this kind of speed was to pick goods in store.
Enabling same-day delivery
One of Chemist Warehouse’s priorities was to ensure that its customers still had access to the goods that they needed in a timely manner.
“Like many other retailers, our online orders sky-rocketed during COVID-19. We knew we had to do something different to meet customer demand. We wanted to make sure we could offer the same service and still allow customers to feel safe and comfortable and offer a hyper convenient service. We didn’t want our customers to endure long delivery times which quickly became the norm during unprecedented delivery demands,” Mark says.
Before COVID-19, Chemist Warehouse was fulfilling around 30,000 orders a month. When COVID-19 restrictions began, online orders reached higher levels than previous Black Friday sales and Christmas peaks.
Since introducing the Cohesio solution, Chemist Warehouse now has the capacity to fulfil around 150,000 orders a month, a significant increase on the previous 30,000.
When a customer selects an order on the Chemist Warehouse website or app, Chemist Warehouse’s Order Management System (OMS) will check the stock levels in the stores closest to that particular customer to fulfil the order.
The online ordering system holds the profile of the customer, so if they have previously visited or ordered click and collect from a store, it will recognise their local Chemist Warehouse store.
“Ignito then sends a message to the store inventory team and communicates which orders are for Click and Deliver, and which are for Click and Collect,” Rizan says.
Significant work has been done to ensure ease of use for the picking and packing staff. “We’ve made the process very simple for the user in the store. They pick orders for both Click and Collect and Click and Deliver, and then at the end it will communicate which boxes are for delivery and which will be collected in store,” Rizan says.
Mark also recognised that while Chemist Warehouse was experiencing growth during COVID-19, some businesses had lost a lot of their work. With this in mind, Mark ensured he used a local Australian owned and operated transport carrier to fulfil the orders, keeping local businesses in work and local residents in jobs.
Ignito communicates with the transport carrier, ensuring a seamless and efficient delivery time.
Within four weeks, the solution was rolled-out across ten Chemist Warehouse stores, and after the successful trial the Click and Deliver solution is now being offered at all of Chemist Warehouse stores across Australia, with New Zealand set to follow.
An essential service
Mark says providing Australians with the essential goods they needed in the safest way possible during COVID-19 was a major priority for Chemist Warehouse.
“We recognise the critical role that we play in keeping Australians healthy and giving them access to essential goods for the benefit of their health. We knew we needed to come up with a solution that reduced anxiety and risk for the most vulnerable members of our communities. Cohesio rose to the challenge and we are proud to be able to keep serving our customers with flexible and convenient delivery options,” Mark says.
Speed of delivery was a major priority for Mark, as well as ensuring that society’s most vulnerable people could still get access to the medication and products that they needed without needing to come into the store.
“We’ve already had great results working with Cohesio for our Click and Collect solution, so we were confident they would also deliver on our Click and Deliver solution,” Mark says.
“At Chemist Warehouse we’re absolutely thrilled that we can now offer our customers this service, and we also see the convenience this will provide our customers post the COVID-19 crisis as we move into the new normal for retail in Australia and around the world.”