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How Local Pharmacies Can Compete as Amazon Enters the Market

Posted by Sean Spector on Nov 30, 2017 10:03:51 AM

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Amazon is positioning itself to enter yet another market. With the continued acquisition of pharmacy licenses in 12 states (and counting), Amazon is well on its’ way to establishing a foothold in the U.S. medical supply and pharmacy market.

Stocks in the pharmaceutical industry responded. Shares in Rite Aid, CVS, and Walgreens all dropped between 3 and 5 percent after the announcement - similar to the drop in grocery stocks with Amazon’s earlier acquisition of Whole Foods.

Not too long after, Amazon claimed it has “no intention to use the licenses it secured in October to store or distribute prescription drugs online,” causing pharmacy chains’ shares to rise again.

Of course, that could always change or be worked around. Instead, Amazon claims it plans to focus on medical supplies, like surgical equipment and devices, which would still have a significant impact on pharmacies.

An article in the Chicago Tribune speculates that Amazon could drastically change the way U.S. pharmacies do business. Among the strategies for change are:

  • - Leverage Amazon’s existing shipping operations
  • - Buy up massive quantities of generic drugs
  • - Use Whole Foods and new brick and mortar locations as distribution centers
  • - Acquire other pharmacy companies
  • - Build its’ own pharmacy arm
  • - Improve the customer experience for online medical equipment and drug purchases

Local and regional pharmacies may be wondering how they can possibly compete with Amazon’s massive resources and infrastructure. And how can they?

By focusing on delivering an exceptional customer experience.

Pharmacy owners have a few critical arrows in their quiver that will help them compete with Amazon. They all revolve around making the pharmacy customer experience the best there is. Here are a few ways to do that:

Today, many small pharmacies provide outstanding customer service, both in their physical stores and over the phone. Continue delivering excellent service, and ask customers for regular feedback on how to improve.

Pharmacies should then translate successful tactics in those offline channels to their online channel. If you don’t have one already, offer customers an easy, straightforward way to place pharmacy orders online, for both prescription and over-the-counter drugs.

Consider partnering with a same-day delivery service to provide on-demand healthcare delivery services, as a way to compete.

Make sure the service you choose has HIPAA-compliant drivers, so your customers can be sure their healthcare deliveries and their personal information are secure.

Related: Key Traits You Need in Your Medical Courier

For customers with regular, repeat purchases, consider a subscription service that covers the cost of both on-demand delivery and regular order processing.

Think about all the benefits of coming into the pharmacy. Do you have staff walking the floors to answer questions, and maybe others available for in-store consultations? Consider how you might translate those services to an online model, with chat functionality or scheduled online Q&A’s.

And what about those complex products that customers can’t get everywhere, like compounded prescriptions? Leverage these types of products as key differentiators that Amazon just can’t provide.

Want to know how Dropoff’s same-day delivery service could enhance your customers’ pharmacy experience? Contact us today for a demo.

Topics: Health Care

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