Chemist Warehouse announced the launch of an online marketplace last week in an effort to expand its online presence in the pharmacy, health and beauty categories. The platform, which was launched in partnership with Marketplacer, will be a closed marketplace, allowing Chemist Warehouse to pick and choose the suppliers and products it works with, ensuring every item meets its criteria. The goal, according to Chemist Warehouse’s head of e-commerce and digital customer experience Nick Blatt, is
tt, is to allow the business to broaden its range without further cluttering its stores.
“The Chemist Warehouse model of being a discount retailer has its challenges – you can’t fit every product you’d like in a store,” Blatt told Inside Retail.
“We’ve had that problem for many years, and our original thinking behind the marketplace was to allow some of the brands we sell to range their entire product line online, which they can’t do in-store.”
The marketplace initially will focus on the health and beauty sector, as well as bulk offerings of over-the-counter medicines, such as Panadol and Nurofen, that can be sold online. Prescription medication will not be available through the marketplace at launch.
Although Chemist Warehouse has recently pushed into the discount luxury category with the launch of its Ultra Beauty store-within-a-store concept, the marketplace, for now, will only focus on the main Chemist Warehouse business.
The other reason the business went down the marketplace route, Blatt explained, has to do with logistics. Chemist Warehouse has around 20,000 products, some of which are slow-moving and can expire in the distribution centre before stores have the shelf space to take them.
By creating a more robust online platform, Chemist Warehouse can move some of those items, and allow brands to list their own products on the marketplace and send orders directly from their own facilities – cutting down on Chemist Warehouse’s distribution costs.
Marketplacer co-founder Jason Wyatt believes it makes sense for retailers to decouple their online shipping from a centralised warehouse, especially given the growing supply chain and distribution challenges they are facing.
“It makes perfect sense for [Chemist Warehouse] to grow without the need of holding all of its inventory, and opening new warehouses and buildings,” Wyatt told Inside Retail.
Marketplacer, which has been helping retailers build their own marketplace offerings for six years, has benefited from the uptake of online shopping over the last few years.
Having worked with the likes of Barbeque’s Galore, Woolworths, and Myer previously, Wyatt called Chemist Warehouse’s adoption of a marketplace offering “generational”.
“It’s still a family-run retailer – there’s not too many of those left in this country, it’s iconic,” Wyatt said.
“And if you think about what Chemist Warehouse can do with this model, it could be a superpower in [next year’s] troubling times, and we’re really proud to be a part of it.”
Quality over quantity
According to Blatt, the goal is for Chemist Warehouse to be known not only for its pharmacy range, but as a destination for health, beauty and fitness brands as well.
“I think we all associate the Kogan marketplace with electronics, but now they’ve launched into other things as well,” Blatt explained.
“I think we want to stay in our lane – we’re not going to start selling computers or anything like that – but we really want to be the destination for health, wellness, beauty, as well as over-the-counter pharmacy related items. We want it to be a one-stop-shop.”
In saying that, Blatt said the business will be picky about the brands it works with, noting that if brands want their products on the Chemist Warehouse marketplace, they need to be available at the best price.
“If you don’t fit with the brand promise of Chemist Warehouse, you’re probably not the right partner for us in regards to the marketplace. We’re going [for] quality over quantity,” Blatt said.
“We’re very particular about who we work with, and we only ever choose partners that are true partners – it has to be a win-win for everyone involved.”