You read the tag line correctly. Amazon is launching Amazon Pharmacy and they are promising discounts and free delivery to many eager customers. While this move may have been the next logical step for Amazon after acquiring Pill Pack, it's also leaving competitors like CVS and Walgreens shaking in fear.
The writing was on the wall
Amazon bought PillPack back in 2018 and with that purchase, it put all the big chain pharmacies on notice. PillPack is a completely online pharmacy that delivers medication straight to a consumer's door. It also took customer experience to another level by sorting medication into daily packets for convenience. Once Amazon announced the acquisition, shares of CVS, Rite Aide, and Walgreens all took a hit. Then in November of 2019, Amazon changed the branding of PillPack from "PillPack, an Amazon company" to "PillPack by Amazon Pharmacy."
So was it a big surprise to competitors when Amazon formally announced Amazon Pharmacy a few days ago? No. What they really worry about is Amazon eating away at more of their market share. Amazon already eroded their customer base who came solely for toiletries and the acquisition of PillPack gave consumers another reason to not even enter a store.
Hide your customers, hide your margins...
So what could an entrepreneur learn from this? Amazon is trying to disrupt every industry and if you can't adapt quickly, your business will be dead.
There are 2 things about Jeff Bezos that is pretty much common knowledge at this point.
He is fully committed to his ongoing cosplay of Lex Luthor
He won't stop until Amazon dominates the market in almost every industry.
In an almost Lex Luthor fashion, Bezos famously said "Your margin is my opportunity." He essentially implied that Amazon can offer better prices because it can cut out all the middlemen and associated costs with them in the retail supply chain. Lil Wayne said it best when he said "Real Gs move in silence like lasagna" (TLDR: this means you move without other people noticing what you're doing) and Jeff Bezos is a master at disrupting industries before anyone notices.
How will big chain competitors respond
For the most part, big chain pharmacies have been incredibly bad at keeping up with the times. Walgreens famously shot itself in the foot, when it brought Theranos to its stores without even testing the technology first. CVS has responded to pressure by doubling down on health clinics, deliveries, focusing on its wellness services. However, with Amazon offering savings of up 80% on generic medications, 40% on brand name medications, and free 2-day shipping; competitors will have an uphill battle. The last thing that any of these big chains want is to end up like Toys R Us (RIP Geoffrey, once a Toys R Us kid always a Toys R Us kid).
How can smaller companies respond
If you are a small business owner with their own pharmacy, I'm not gonna lie to you; you have a real fight on your hands. Now the one thing that is on your side, is the human element. Amazon cannot automate that, and if you can create incredible goodwill with your customers, it's a great place to start from. Once you have that, try exploring some of these ideas.
Telehealth services: Customers can have video calls to discuss the prescriptions and other issues
Partnering with other businesses: Try partnering with local healthcare service providers and medical suppliers
Offer delivery services: Delivery is now becoming a standard service and if you don't have the logistics to start your own, consider partnering with a vendor.
Improve customer experience: Try creating new services that will fix some of the smaller problems that a lot of your customers when they pick up their medication. Creating an app to track all their prescriptions or facilitating faster service are only a few ways you can improve the experience.
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