While many consumers welcome Amazon’s move into pharmacy with its acquisition of PillPack, more than half would like the option of picking up their prescriptions from a physical store, according to Amazon and Pharmacy Perception and Plans, a new report from research firm GlobalData Retail.
Consumers do not mind mail order, but there are many who like having a physical store where they can get advice or pick up prescriptions.
When asked the question, “What services/benefits would you like Amazon to bring to pharmacy,” 62.3% of consumers said they would like pick up from the online retail giant’s Whole Foods locales. The response placed second out of eight choices. Lower prices, with 78.9%, placed first.
Overall, the report’s data shows consumers generally welcome Amazon’s move into pharmacy — most likely because they think it will increase competition and reduce prices. However, consumers have concerns about sharing sensitive medical and health information, which Amazon will need to overcome. Insurance network restrictions may also prevent some consumers from using Amazon, even if they want to, says Neil Saunders, managing director of GlobalData Retail.
“The data also suggest that as much as some consumers do not mind mail order, there are many who like having a physical store where they can get advice or pick up prescriptions,” Saunders adds. “This may limit Amazon’s growth if it sticks to the PillPack mail order model, but it also affords the company an opportunity to develop a physical presence, perhaps using its Whole Foods stores.”
In any case, there are sufficient numbers who seem willing and able to use Amazon’s pharmacy services to allow the online giant to build a credible business and cause some disruption to established players, Saunders says.
Findings from the report include:
- The good news for Amazon is that a majority of Americans (54%) approve of its decision to enter the pharmacy market. Only 24% think that the move is a bad thing. The balance of consumers are neutral about the entry. Approval is fairly even across the various demographic groups.
- When it comes to using Amazon for prescriptions, around 36% of consumers say they would either be very likely or likely to go to the retailer to fulfil their prescription needs. Almost 41%, are not sure if they would use Amazon – most likely because it would depend on the networks permitted in their insurance or health plans.
- When it comes to where consumers would like Amazon to offer its pharmacy services, 61% are happy with mail order. However, a sizeable number would like to see Amazon develop a physical presence, either at its Whole Food stores or via stand-alone pharmacies. Within ‘somewhere else’, respondents noted Amazon’s bookstores, kiosks in malls and a few mentioned Amazon’s Go convenience concept. These numbers suggest that for Amazon to really penetrate pharmacy, some sort of physical presence is needed, even if not on the scale of the traditional drugstore chains.
- Sharing data could be a barrier for Amazon with almost 58% of consumers saying they’d have at least a minor concern about sharing medical and health information with the company. On the flipside, almost 38% say they would have no problem at all; these consumers tend to be younger.
- Other barriers to using Amazon in pharmacy include a perceived lack of customer service, a desire to visit a physical pharmacy store, potential insurance restrictions, and safety concerns about mail order dispensing.
- When it comes to what Amazon could bring to the pharmacy market, the vast majority of consumers (79%) would like Amazon to lower prices. The ability to pick up prescriptions from Whole Foods stores and have same day delivery were also popular. Just under 60% of consumers would like to be able to reorder drugs via Alexa, and 48% would like a discount for Prime members.
For more on Amazon’s acquisition of PillPack, see Neil Saunders’s commentary here.