Let’s welcome Amazon to the neighborhood.
Frankly, no one can be surprised by the company’s decision to launch Amazon Pharmacy, its new store on its website that allows its Prime customers to purchase pharmaceuticals on their desktops or mobile device, probably at lower price points than currently available.
We knew this was coming when Amazon purchased Pillpack in 2018. We knew this was coming when Amazon started acquiring wholesale pharmacy licenses in various states starting in 2017. Heck, one could argue that we saw this coming as far back as nearly 20 years ago when Amazon first started to become a player in the retail world.
Now, what do we do about it? The answer is the same as whenever a new, robust competitor enters the marketplace. The rest of us have to get better at what we do to keep as many consumers coming back to our stores and websites for their purchases.
All Amazon is doing is turning the heat up a little bit. The company has done it before when it purchased Whole Foods more than three years ago. Everyone thought the sky was falling back then too. Everyone thought that the Amazon-Whole Foods deal would be the end of grocery retailing for just about everyone else.
It did not happen. Instead, other retailers took the necessary steps to fight back against that merger. They spruced up their stores; they spruced up their merchandise mix and they spruced up their go-to-market strategies to ensure that as many consumers as possible kept coming into their stores. Funny how good competition can make other businesses act smarter.
Drug stores and their pharmacies now have to do the same thing. I think they actually have been doing this already. To beat back the Amazon challenge, retailers need to continue to take the necessary steps to keep customers coming through the doors. That all starts with the pharmacist who will have to step up their games even more to stay connected with their patients.
Then, it is incumbent on the retailer to make sure they offer a retail environment that is welcoming to the shopper and have the right products — at the right price points — that makes sure their consumers do not even view Amazon as an option for them.
As always, it is going to take a lot of money to keep up with Amazon. But, from this angle at least, there is really no alternative. Is there?