In the beginning, there was no Walmart in town. Lynn Morris and his wife, Janet Morris, established Family Pharmacy’s first store in 1977 in a shopping center in Ozark, Mo. “Back then, that was what there were – just independents,” President Lynn Morris recalls. “Then shortly after that – about 12 to 18 months after we opened up – there was a Walmart that appeared. Then they started appearing everywhere, just like a case of the measles.”
Morris has observed the disappearance of independent retailers in his area over the years. “In the shopping center where I was originally, there were 10 businesses, and only two of them are still open today, and about seven of those businesses closed after one year,” he remembers. “So that’s what Walmart did just about everywhere in the country. They eliminated at least half or more of the mom-and-pop independent retailers.”
Today, the retail landscape is much more dense with big-box and chain and grocery store competitors. To prevail against this type of competition, Family Pharmacy has relied on several strategies.
“What we tried to do from the beginning was to make sure we gave that personalized, customized service that no one else could do,” Morris emphasizes. “We’ve always been best at customer service. We always tried to make sure we had low prices – not necessarily the lowest prices – but competitive. As long as you have competitive pricing, you’re not going to get knocked out of the ballgame.”
The best defense is a good offense, so Morris has been innovating with his business for years. “Over the years, we just developed more and more niche marketing, and niche types of business and services that no one else would try to replicate,” he explains. Today, Family Pharmacy has 25 retail stores, three closed-shop pharmacies, two home medical stores and a hospital pharmacy it staffs.
Having its own drug warehouse enables Family Pharmacy to buy in bulk and helps with pricing. “We usually save 35 to 65 percent on everything that we buy compared to what we would pay from a wholesaler, and that has really helped propel our growth,” Morris notes. “Because it’s a lot harder to make a profit on the sell side, we really think the buy side is where it’s at. The buy side is what makes the difference for the big companies, and we think it’s what is going to make the difference for us.”
At one of its stores, the company operates a frozen custard and sandwich shop decorated in a 1950s motif that it is considering franchising. Along with the drug warehouse, Family Pharmacy also has a conventional OTC/HBA warehouse and one for mobility products, where a repair shop for those products is located. Additionally, in 2011, a separate division within the company started to modify houses for safety and mobility.
“We do everything possible to keep someone in their own home instead of having to go to a nursing home or leave their home for any reason,” Morris explains about the remodeling work. “We make their home safe and comfortable. It could be such little things as stretching the carpet back out and making sure you don’t fall over the carpet.” Typical modifications include installing handbars, railings or pulleys, widening doors for wheelchair access, installing walk-in bathtubs and repositioning toilets. The company has installed six elevators in private residences.
“We’ve done several projects now that range from $3,000 to $22,000, and 90 percent of them are private-pay, cash projects,” Morris points out.
“This gives us more cash revenue instead of the reduced margins commonly experienced with third-party payers.”
One of Family Pharmacy’s customers is a quadriplegic confined to one room of his four-room house. “Our mobility experts were able to devise a pulley system in all four rooms and hook him with the harness,” Morris explains. “Then we developed a pulley hook system so he could then go from any of his rooms, and this changed his life from night to day. So we are real proud of that. Our billing specialists are experts and were able to get insurance to pay for 80 percent of it, so he was only out 20 percent. We thought that was a fantastic deal our company did for someone that just made a huge difference in his quality of life.”
Morris was able to find some of the construction specialists for the home modification business among his employees’ unemployed spouses with construction industry experience. “They don’t build homes anymore, they work for us,” Morris emphasizes. “We have signs in the yard and on the vehicles, and we take the before-and-after pictures. We get the letters of testimony – how they like what we do – it’s a very serious part of what we’re doing. We’re really making a difference in people’s lives, and it’s a very fulfilling business for us.”
Through Invacare, one of Family Pharmacy’s healthcare partners, Family Pharmacy Home Medical Supply offers free sleep apnea screening in the patient’s home that utilizes free software and the expertise of a respiratory therapist. The company also has a store in Branson, Mo., that features disease states “in the round.”
The store utilizes 360-degree circular fixtures in which products are categorized by the disease they remedy. So in one section, all the products a diabetic would use – such as skin care, eye care, testing supplies, diabetic socks and insulin coolers that in a conventional store layout would be in different areas – are all gathered in one.
The company also plans to open its first optical department in a new 4,000-square-foot store. In addition, the store contains a bargain outlet designed to sell closeouts for 50 percent to 75 percent off retail prices. This department allows the company to consolidate dead stock, discontinued and seasonal merchandise from all other company stores to one location in lieu of storing the items.
“It is not uncommon to sell 10 Christmas trees in July,” Morris says.
Family Pharmacy also is expanding the wellness departments installed two years ago that carry some of the vitamins, herbal enzymes and homeopathic remedies found in health food stores. “We determined we’re the go-to place to get your prescription medications, but we wanted to be the place to go when you’re not sick,” Morris explains. “We’d like for our customers to come to us when they’re well and work together to try to stay well, look better, live longer and be healthier – all those things everyone wants.”
In the first quarter of 2012, the company is opening its first specialty pharmacy, which will include a compounding pharmacy to mix and formulate drugs that are not commercially manufactured. The new pharmacy will have patient rooms staffed by nurses for administration of medications, and a vaccine travel center, where all the vaccinations needed by travelers are administered.
Family Pharmacy uses automation in various forms. In 2011, the company installed VoiceTech IVR in eight locations to aid the stores in answering calls and processing refill requests. Additionally, several locations have Kirby Lester counting devices that speed the filling process and serve as a check in the quality assurance process.
The Forsyth, Mo., location utilizes a ScriptPro robot that fills more than 300 to 600 scripts per day. The robot counts and labels the top 175 drugs. “The robot is essential in the daily operation and was installed to lend a hand, not replace an actual employee,” Morris asserts. “An employee has to keep it filled up or it stops the whole process.”
All of these systems were implemented to allow the pharmacy staff to spend more quality time with each customer.
Family Pharmacy utilizes the Rx30 pharmacy management system’s RPH Review and workflow stages to diligently check every prescription for accuracy. The closed-shop pharmacies also utilize automation to help fill prescriptions for more than 130 nursing facilities. “We have an actual device that helps fill OPUS cassettes without touching any of the tablets, and it fills them much faster,” Morris points out.
Family Pharmacy also is investing more than $250,000 on a multi-dose dispensing system that will allow the company to accomplish short-cycle dispensing in a unique way while meeting the needs of more than just the long-term care community.
Family Pharmacy advertises in magazines, radio, television, newspapers, on Facebook, billboards and direct mail. It also has a TrueCare Elite program with a middle discount price that beats Walmart. Walmart only offers $4 and $10 discounts, whereas Family Pharmacy offers three levels – $3.99, $7.99 and $9.99. The card is free and offers free delivery, discounts on private-label drugs and immunizations and home medical equipment. Members receive notices of special sales.
“It’s a very nice loyalty program, and it’s growing every day,” Morris declares. “Some days we get 10 new members, some days 200 members. It’s amazing each day how many members we get.” Currently, Family Pharmacy’s loyalty program has approximately 35,000 members.
Cruisin’ USA, the company’s 1950s-style frozen custard shop, holds classic car shows with live bands throughout the summer to raise money for various charities. Just this year, the car shows raised $187,000. The shop also caters other events throughout the year for physicians’ offices, schools and churches for up to 500 people. The shop serves sandwiches, hot dogs, soup, salads and its famous chicken salad sandwiches.
All the company’s pharmacies have waiting areas that offer free coffee in several flavors, water, tea or hot chocolate to customers waiting for prescriptions. Most stores also have counseling rooms where fittings, counseling and immunizations can be done in a private setting.
Morris’ wife, son and two daughters work in the business. Justin takes care of the IT and other technological needs of the company; Mandy works on marketing, special projects and helps run the warehouse; her husband does all the building and remodeling projects; and Melissa raises three small children and also works part-time in the office.
Morris’ partner Mike Langston, his wife Carolynn, his son and daughter-in-law also work in the business. Additionally, Family Pharmacy has a management team Morris calls “great” that serves all the stores and its 300 employees.
For next year, the company plans to open at least one new store and move another, and is always considering acquiring businesses from retiring pharmacists. “We are currently looking at two locations,” Morris reveals. “We don’t put pharmacies in until we have a team put together. Where we go depends on where we can find a local pharmacist and local staff. We love small towns, but if we can’t find people who are part of the community, we’re probably not going there.”
Family Pharmacy bought a new 16,870-square-foot corporate center in Ozark that includes five acres. In 2012, the company will begin building a new warehouse on the open site to consolidate its three existing warehouses instead of leasing space. Occupancy of the new corporate office is set for the end of this year. Additionally, its original store was remodeled this year with new laminated wood flooring accented with forest green carpeting and its customer flow redesigned.
Family Pharmacy continues to promote the green initiative through the conversion to a recyclable vial in 2011. The company worked with TriState to convert to an ergonomic, three-sided vial that not only is easier for the customer to grasp, but also is friendlier to the environment. “Family Pharmacy understands the importance of caring for the next generation, which includes looking out for the environment,” Morris says.
Despite its innovation and modern methods, the philosophy of Family Pharmacy has not changed since its founding. “Since 1977, we have kept the same slogans and the same philosophy,” Morris asserts. “We give away 25,000 planner calendars each year. The front cover of the 2012 calendar says, ‘Family Pharmacy – Since 1977, Best Service Plus Low Prices.’ This is what the 1977 calendar looked like as well. It really hasn’t changed. Business does keep progressing, and we strive to modify, reinvent, adapt and change to keep up with current times and trends. However, we always remember how it all started.” Family Pharmacy continues to focus on growth through its one-, three- and five-year plans.