Bridging the data gap in the life sciences
This is part of a series of articles detailing Arca Blanca’s experience and considerations in the Life Sciences.
Much of the past year has been spent with the life sciences in the news. But the focus on Covid-19 treatment, testing and vaccine development conceals the unrelenting charge of new players into the market.
The entrance of big tech has created an increasingly crowded and more competitive arena, yet incumbents need not feel like sitting ducks. Moving thoughtfully and with the future of the industry in mind has the potential to revitalise long-standing brands.
A mindset shift towards real and deep customer service offers a path forward. This is not about just meeting rising customer expectations. It means thinking through unmet needs and reimagining services and products together to deliver a richer and more valued experience. This will eventually lead to consolidation, partnering and vertical integration, resulting in a dramatic change in the mix of organisations and their market share.
Data will be a major differentiator, prompting inwards reflection on operating models, genuine points of customer differentiation and user journeys. The winners will likely pivot and become something different, outcompeting traditional competitors.
The immovable object vs the unstoppable force
Big tech and startups have made inroads to the life sciences in several countries. Amazon Pharmacy and Apple Health are emerging as household names for healthcare in the U.S. and Google’s recent acquisition of Fitbit builds on its existing ‘Home’ offer.
Their entrance to UK and European markets is certain and will accelerate because of governments promoting digitalisation and easing regulation. The clock is ticking for traditional European health and care organisations, particularly for those exposed to fast-changing high streets.
Delivering a customer-oriented proposition
Written large in every dot-com business success is the lesson that consumers favour convenience.
Free delivery and click-and-collect services are already ubiquitous, marketing to millennials and younger requires responding to a heightened level of expectation.
With that in mind, delivering a personalised, convenient and omnichannel service should be front and centre of any proposition. Meeting the ‘new norm’ head-on by focussing on hygiene factors like cost and service will be critical.
Using AI-enabled solutions to identify supply chain inefficiencies, cost elasticity, localised range of offering and profitability drivers will create breathing space to focus on price transparency, convenience and ensure a frictionless experience.
Rethinking the supply chain
Pharmaceutical companies have already entered a new era as direct-to-consumer and direct-to-pharmacy propositions, cutting the middleman, the wholesalers. Wholesalers will need to examine how they deliver more value in order to remain relevant.
The realignment of priorities has begun. Walgreens Boots Alliance recently sold its Alliance Healthcare wholesale and distribution business to focus more on its retail operations.
Whether it is the rethinking of a core proposition or expanding scope via vertical integration, being a wholesaler without scale will be a tough position to hold in a disintermediated supply chain.
The Alliance Healthcare purchase by AmerisourceBergen highlights the value size can bring. Consolidation to leverage scale, along with a resilient business model, will provide reinforcement against big tech-enabled distribution models.
More important than consolidation, however, is enhancing the service proposition. More than ever, customers need a compelling reason and desire to visit a pharmacy other than just collecting a prescription. Moving the pharmacy upstream or manufacturing downstream can remove friction.
Modern technology offers opportunities that were not available even a few years ago. Businesses can better understand customer behaviour, which markets to enter and profitability drivers. This can allow leaders to compete on a level playing field with tech giants.
A medical tech firm using federated learning algorithms can identify opportunities without encountering privacy issues. A healthcare provider can identify ancillary services to provide, creating a community-focussed approach that tech giants are unable to.
Creating an end-to-end service
With the power of insights at their disposal, many companies that examine their operating models will at one point explore the opportunities an ecosystem approach can bring.
Delivering an end-to-end service with other players in their customer’s lifecycle could generate huge rewards. Sanofi, Capgemini, Generali and Orange just announced plans to create a digital ecosystem focussed on e-health, the first of its kind in Europe.
Similarly, platforms combining smaller pharmacies in the U.S. have been attempting to push back against the arrival of Amazon Pharmacy and other new entrants.
Examining whether a digital ecosystem can be created to rival the disruptors will be essential. Opportunities are available for pharmaceutical manufacturers to use a platform to directly reach consumers like never before.
Embracing mechanisms for growth
The life sciences sector encompasses myriad players and mechanisms for growth, innovation and change that while disruption is likely, companies that act with foresight should not fear for their future.
Being displaced is not inevitable if you can step out ahead of the competition. Putting customer experience at the heart of your business can allow you to become the disruptor rather than the disrupted.
Embracing the value of a data-led approach and aligning business and operating models in line with data-driven opportunities is not only for big tech. It can be utilised by organisations of all shapes and sizes to create an invaluable proposition.
About Arca Blanca
Arca Blanca is an integrated consulting and data company, resolving complex growth and profitability challenges. We help businesses of all types thrive in the face of unprecedented change and upheaval driven by new technologies.
More in insights...