Read the Conversation

EF: What was the role of Dis-Chem during the pandemic?

IS:  We offer an essential service therefore we remained open, although during the initial stages of the lockdown we were restricted to selling only essential goods. Our first initiative was to set up testing stations around the country. Initially laboratories were completely overwhelmed with the volume, which was more than they could handle.

LS: Testing stations were set up mostly in shopping center parking lots, so that the people being tested did not have to come into the stores or be in contact with anybody but those doing the tests and who were obviously wearing the correct protective equipment. The person being tested felt safe in the environment. The challenge arose when the laboratories could not cope with the volume of work, we could do the tests and get them to the laboratory but the laboratories couldn't get the results out in time. It got to a stage where it took about two weeks to get results which was too long so at that point, we closed down our testing stations to allow the laboratories to catch up, reopening a month later with a 24 hour service. Once we were done with the antigen testing, we started doing antibody testing -to know if a person had been exposed and if they had antibodies. Our customers could walk in, do the test and get their results 20 minutes later which was very popular. 

IS: As we are also part of the vaccination program, we opened mass vaccination sites where the private sector was testing Medicaid patients. We vaccinated 8 thousand people in our first week -last week- and this week another 5 thousand, next week we hope to do another 5 thousand and so on till we reach 40 thousand. After that we will start doing vaccination in the stores. South Africa is in phase two of the program which means vaccinating 60 year olds and over, we will be limited to that demographic group for several months, then it will be people with comorbidity and then everybody over 18 years of age. We will continue vaccinating for the rest of the year, at the rate of supply.

EF: Pharmacies are today acting as the backbone of primary healthcare for accessing patients, what challenges and opportunities do you foresee during the vaccination phase?

IS: It is hard to say but a lot will depend on the regularity and consistency of supply, when and how many vaccines we will be receiving. We are running ahead of the supply chain and it's not a position that a business should be in but if we had waited for that to be sorted out we still wouldn't have started and we couldn't wait to start vaccinating. 

LS: We anticipate that once our store clinics and other pharmacies come on board plus the outfit for our mass vaccination sites we will be able to administer up to 800 thousand vaccines a month, provided we get the supplies and vaccination from the government -we are geared up for precisely that. We are just hoping that we get the vaccinations and that the system can handle it. I am very proud at the moment about the number of messages of gratitude and the posts on social media from people that have received the vaccination. Not only on having received the vaccination, but the customers are commenting on the efficiency, how they were made to feel welcome.. They were kept informed on where they were in the queue, we offered water, set up a coffee station so that customers wouldn't find the experience harrowing. I feel very gratified that, as a group, we have made a difference and afforded the general public the opportunity to be vaccinated in a agreable and caring environment. 

EF: Being such a big company how did you manage to stay agile in the process of deploying testing and the vaccination plan? 

IS: We aim to give everybody what they need, and what they want. I think that's been our success. 

LS: I think the result is a combination of Ivan's foresight, and our staff's ability to implement what needs to be done. We are a very big company, but Ivan at its helm knows everything that's going on, he sees what the needs are, he is agile and makes things happen. We also have very competent staff at the head of the clinic services and at the head of the pharmacy side. And once they understand what is required, it doesn't take them long to get things done. 

EF: Which courses would you recommend to include in a Master Pandemic Administration?

IS: Text books on Covid are still to be written! I'm not sure university can teach us how to deal with  a situation like the present. The situation is changing constantly so basically it is about rolling up your sleeves and doing the best you can in a changing environment. I don't think academic knowledge can teach you how to deal with all that must be dealt with, South African business, the Department of Health, the director general of health, etc.  We have to navigate it as it comes, the making and breaking of rules, depending on the supplies, etc.

LS: I think one of the important things over this period was educating the public and creating awareness on mask wearing, washing their hands, keep sanitizing, social distancing all the things that we know about first and concepts that needed to be reinforced with the customer. We set up the store with basic learnings into all our  communications, even if it's just a price catalog -reinforcing the basic principles of hygiene. Treatments, protocols keep changing but fortunately, our health system does seem to be very aware of what is happening. The strains and variants present in South Africa were identified very quickly because of the testing done and mainly due to our excellent academics and professionals in virology, all experts in their fields.

EF: Which Key performance indicators  (KPI’s) did you incorporate this past year during the pandemic?

IS: Because of the slowdown in turnover over the first phase with people staying away from the shops, cost containment and expenses in running the business were key indicators to match the turnover as best we could. We came out OK of the year but there were a lot of challenges ensuring continuity and we had to reduce costs through various means. We also had supply chain problems when the shipping world came to a standstill and because factories weren't running at optimal capacity in China. As shipping wasn't running our orders had a poor attendance and in certain categories, we had a focus on out of stocks. 

LS: We also kept track of staff being sick, sanitizing stores, etc. There were added costs from the supply chain, we had to start employing temporary staff to make up for people that were ill. Even so we did manage to curtail costs by working around the issues in different ways. We worked on getting our return on investment, making sure that we had the correct amount of stock in the stores -not being overstocked- having to change to a certain extent, our product mix. For example in the beauty sector whenever there is a crisis we refer to “the lipstick effect”, a woman buying lipstick in a time of crisis. In this pandemic however this did not happen, no women were going out to buy lipstick having to hide behind a mask, they were not even going out and definitely not attending social events and likewise we have to shift and reduce the inventory. There has been a shift from beauty products to immune boosters and to health products, beauty fragrances were also affected. Because people are not socializing, or going to the office and fragrances are not being used as they were. So it was a case of balancing the type and the quantity of stock needed.

Another focus was our increasing online presence. E-commerce went through the roof, we officially increased 260% over a period of time -but we were up by 400-500% at some stages. Obviously, we weren't prepared for these fluctuations and at first we didn't have the capacity or the staff, the systems or the deliveries in place. But fortunately, we were an agile company and we managed to pretty quickly put the measures into place to get our e-commerce performing efficiently and get the products to customers. With this change in e-commerce, we have improved our system and this week launched an “on demand one hour delivery service”. We have the conventional delivery service and now the one hour on demand. We have very probably accelerated by three to five years in the e-commerce field. I wouldn't know exactly where we would be in three to five years but we certainly have accelerated the online offering of deliveries in the use of apps to get the correct delivery routing happening. Technology has been boosted in getting stock to the customers and this is a big change for us.

EF: Do you see a shift in the behavior of customers from going to the store to using delivery models?

IS: We have been online for a while, and our ‘one hour’ is really too new to know as yet, but generally speaking the foot count is down but the baskets are up, people do not want to dwell in the store like they used to, they  come less frequently to the store and when they do they buy more . 

EF: Last year you had about 170 shops in your franchising plan. What effect has e-commerce played in your plans for the future and after the epidemic? How do you see the future of pharmacies?

LS: We will be opening up our 200th store in September. We are continuing with the brick and mortar store rollout because we find that the customers have been trying in these last three or so four months to return to some sort of normality, which the vaccine will afford them. We are not at that stage yet but people are really craving to get out and have a little bit of normality. We do find that they are returning to the big malls and returning to the stores -not as they used to but as Ivan pointed out with less frequent visits, but bigger basket sizes and they still want to see what's new and exciting within the brick and mortar store environment. For the immediate future we are going to continue with the store rollouts, we are continuing working both on the store rollout and on the e-commerce rollout. We've got some quite exciting things planned for e-commerce as well.

EF: Will your 200th store have a new post pandemic layout and design?

LS: No but I am in charge of the new shop design, and it is something I am very involved in. We actually had  two very successful store openings this morning. We feel that people are going back to wanting lipstick and fragrance so we are sticking pretty much to what we used to do. We have seen a slight shift in the behavior and toward the beauty category, so we are placing a bigger emphasis there. But otherwise it is pretty much the same offering with a little bit more attention and space given to the categories we find people are wanting at the moment. 

EF: When you look back on 2020/2021 what would you like these years to be remembered for? 

LS: 2021 is looking a little bit more positive and I feel that we are getting on top of things and making a meaningful contribution to the country. But I  think 2020 has been a challenging period for everybody in many ways.

May 2021
South Africa