Amazon Launches Online Pharmacy. WSJ. 11-18-2020
The drugstore chains’ responses to Amazon’s entry into the pharmacy business are the same; they are not worried because pharmacy is not just about transaction and delivery. In the WSJ article, they talked about the importance of the physical pharmacy, which allows personal interactions with customers and in-store services for people with chronic conditions.
Do you think incumbents don’t need to worry about Amazon’s move into their turf?
It's true that pharmacy is more than delivering pills. At the same time, Amazon is more than an online retailer, which shipped 415 million packages last July. It’s a technology company, a search engine, an ad platform, a media company, etc. I’m excited to see how Amazon would change the pharmacy industry with the power of its e-commerse infrastructure, AWS, and Amazon Echo. Amazon has been also expanding its physical space, so the it could offer the in-person services that incumbents touted. Amazon’s potential partnerships with or acquisitions of other companies may bring new ideas to the US healthcare market, where spending reached $3.5 trillion in 2017 and was projected to grow 5.5 percent per year for 2018-2027.
Now you know my answer to the question I posed above. Big drugstore chains may need to think about the industry they were in for a long time from a fresh viewpoint. There is a reason that bookstores and toy stores we used to visit are nowhere to be found now.
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