From October 2007

By M.V. Greene

Workhorse retail pharmacies are hardly built for glamour; theirs is the yeoman’s work of dispensing medicines and information to customers. But there is an upstart on the landscape seeking to remake that prototype.

Make no mistake, Elephant Pharm will do the heavy lifting of the typical retail pharmacy. But the Berkeley, Calif.-based company will also sign you up for yoga classes, provide a wide and inviting array of alternative remedies, books, natural foods, vitamins and supplements and make registered nurses, naturopathic doctors, herbalists and homeopaths available for free consultations.

The privately-held company with four Bay Area stores and 250 employees has managed to create quite a buzz with its concept. “We get an incredible amount of calls, letters and e-mails [asking], “‘When are you coming to Manhattan’ or “‘When are you coming to Minneapolis?’” says Tim Millen, vice president of information technology for Elephant Pharm. “Many of these people were on vacation and found us and loved us.”

With a rich and varied product line of 35,000 SKUs in each of its stores, Elephant Pharm needed a centralized, real-time system for store inventory management and replenishment. It also needed one that would withstand the company’s long-term plans for growth.

“One of the things we wanted to do was to position ourselves for national growth,” Millen says. “Right now, we’re focusing on Bay Area growth, but we wanted to position ourselves [such] that, if opportunities arise, we are not held back by systems.”

Elephant Pharm tapped the Atlanta-based subsidiary of Aldata Solution, an international provider of supply chain software for retail, wholesale and logistics companies. Using Aldata’s Master Data Management applications, Elephant Pharm was able to channel product into its stores more effectively.

“It’s a big SKU count,” Millen says. “We’re such a small company that we didn’t have the manpower to track all those.” Elephant Pharm typically focused on its top-selling and slowest-selling items, “or we might look at a particular vendor and their line of products and see which ones are performing and which ones are not.”

Elephant Pharm eschews the cookie-cutter approach to retailing: Each store’s merchandise and services are customized to its specific location. Stores are marketed as community hubs and a bridge for customers considering both natural and conventional products.

They have their own classrooms, and store aisles are stocked with health and wellness books. Information cards created by the company’s staff of editors cover topics from how to use vitamin C to choosing a cough medicine, and stores offer more than 80 free classes each month.

Environmental responsibility
The company integrates practices of environmental and social responsibility into the fabric of the stores, providing ongoing environmental programs such as recycling of consumer and company electronic waste, composting classes and instruction on green interior design and green cleaning.

In June, Elephant Pharm announced that its stores in Berkeley, San Rafael and Los Altos were certified as “green businesses” by the Bay Area Green Business Program.

The Aldata system allows Elephant Pharm merchandisers and managers to track just about everything that affects sales performance, according to Millen, from inventory to pharmacy services and yoga classes.

“We can say sales are this much through this one-hour afternoon class,” Millen says. “We can see the variances of how free classes might drive sales. We want to know what that one particular item is [that is] driving sales because that can be an indicator of other things that we may need to do.”

Previously, Elephant Pharm used what Millen describes as a mom-and-pop store IT system, largely limited to ringing up sales and writing purchase orders. Aldata is a management system designed for retailers with more than 50 retail locations, but Millen says it was vital for Elephant Pharm to ready its infrastructure for the expected growth.

“We kind of jumped that middle step, knowing that we are preparing ourselves” for the time when there are hundreds of Elephant Pharm locations, he says.

Like a traditional retailer, Elephant Pharm has a buying department that creates purchase orders, procures product and ships to a warehouse or directly to stores. But it also carries consignment-type goods – such as grab-and-go sushi sandwiches – which vendors stock and maintain on the shelf.

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