CFO Rui Morais on the major strides Dis-Chem is making in the healthcare sector

Monthly online deliveries increase tenfold over two years and insurance range extends to gap cover.

Pharmacy group Dis-Chem has increased its delivery orders from between 6,000 to 8,000 a month to – at the height of Covid-19, around 89,000 orders.

Rui Morais, CFO and executive director at Dis-Chem Pharmacies, said, “In August 2021, we saw online sales growth of 14,4 percent over the comparable period and this was already an increase in growth over the 2019 comparable period where we saw 345.9 percent growth.

“While Covid-19 was the catalyst for the change in consumer behaviour, Dis-Chem’s logistics have become extremely slick. We are seeing a reduction in delivery times from seven to 10 days to same or next day. This has radically decreased customer complaints over the past two years,” he added.

A great enabler of Dis-Chem’s ability to service its ecommerce customers faster has been Picup, a subsidiary of Karooooo. This smart logistics technology, which was adopted in March 2020, is plugged into the Dis-Chem system through API integration and enables the pharmacy group to dispatch online dispensary, front shop and telephonic orders faster.

Picup CEO Antonio Bruni said, “Increasing from 8,000 to almost 89,000 orders a month is a massive jump, and is something we are very proud to have been a part of. Without adequate logistics management capability this rapid increase could have resulted in poor customer brand experience for Dis-Chem. Given that it is every retailer’s goal to grow in the online space, adopting the right smart logistics technology that will allow them to rapidly scale their delivery experience is key.”

Rui added, “Our customers don’t want to wait for their goods, they want them as soon as possible after pressing pay. They also want to know when their parcel will arrive. By using Picup’s technology, our customers are able to track their parcel and arrange their availability around its delivery. Communication is key in the online space to ensure that customers remain informed, and ensure greater customer satisfaction.”

Dis-Chem dispatches both over-the-counter goods and prescribed medication using Picup’s delivery fleet, together with its own 260 Dis-Chem drivers, to ensure faster and accurate delivery across the country. This is managed through 192 Dis-Chem, six Medicare and 35 Baby City strategically designated stores, all active on the Picup platform.

Decentralising its delivery nodes – up from 20 to 80 nationally distributed hubs – has greatly advanced Dis-Chem’s ecommerce service. This has allowed Dis-Chem to shorten its lead times in the processing of orders as well as delivery times.

Further, by using real-time geographical data, Dis-Chem has expanded its hub strategy, “as we know where our volumes are coming from. This has streamlined our operations as we can now map out our distribution strategy,” adds Rui.

Health gap cover
The pharmacy group has also launched Dis-Chem Health Gap Cover, hot on the heels of its medical insurance offering.

“Traction has been strong in the two months since we launched medical insurance, and the uptake has exceeded our expectations. The success rate so far supports our view of the market and the important role that Dis-Chem plays in promoting much wider access to affordable and quality healthcare,” Rui explained.

“Gap Cover is available to existing members of any medical aid and provides peace of mind by cushioning them against unforeseen medical treatment payment shortfalls. We are very mindful of the increased cost of living and growing financial pressures on consumers. A key differentiator of the Dis-Chem Health Gap Cover is that premiums are priced according to age, and on a per person basis, rather than on a fixed cost per family unit. This pricing structure makes premiums more affordable, more widely accessible, easy to understand and transparent,” he added.

From a group perspective, the addition of the gap cover product extends Dis-Chem’s ambition and vision to offer integrated healthcare to all South Africans by improving access to a wider range of interventions designed to improve health outcomes in an affordable manner.

“Our healthcare focus has evolved from in-store clinics to a far broader offering including telemedicine, medical insurance and now gap cover. Dis-Chem is well-placed to play a leading role in extending access to primary healthcare to a much wider and under-served segment of the population,” Rui said.

The gap cover offering will be administered by Kaelo Risk and will be underwritten by Centriq Insurance.