Pharmacy ecommerce has surged over the past couple of years, thanks mostly to the digitalization of life under the pandemic as well as evolving consumer needs and behaviors.
Since then, it has continued its quick growth as well as its digital adoption.
Digital shopping is not new on the commerce block, but the impacts of Covid-19 rapidly accelerated shifts in consumers behavior – we shopped almost exclusively online for months at a time, while those who were rarely disposed to digital shopping reviewed their habits and shopped much more online.
During this period, traditionally in-person health care services became virtual, while at the same time online prescriptions went from being a nice convenience to a vital lifeline.
In terms of pharmaceutical ecommerce, it shows little signs of slowing in the emerging post-pandemic landscape, with broader sections of consumers now used to the convenience of remote prescriptions.
But that’s not the only reason for the drive in digital pharmacy growth. Government and consumer demands for lower prices of prescriptions in addition to the regulatory and industry efforts to loosen the restrictions of telepharmacy are also factors involved in its growth.
Realizing this new reality, those in the industry from telehealth startups to ecommerce giants are investing more into the digital pharmacy market. In turn, this movement is provoking and spurring competition for the more established pharmacies and health care providers.
In order to compete successfully in such a growing market, pharmacies have to understand the challenges inherent in the shifting industry landscape and the expanding ecommerce market.
The key challenges
Challenge one: huge customer demand. Pharmacy ecommerce became crucial to health care delivery with the evolving consumer needs due to Covid-19. Having gone through that experience, consumers have now come to expect that all businesses are online – including pharmacies.
Consumers now expect lower prices and free shipping. They demand better service, more convenience, greater innovation, and higher personalization. We want to decide when and where we receive our products and services.
In terms of the customer experience, we are beginning to compare pharmacies with the general ecommerce standards across all industries. This is underlined by the fact that 75% of survey respondents expect the same level of service from health providers as what is provided by other businesses.
This generates challenges for pharmacies to not only provide positive in-person customer experiences but equally as good digital experiences, too.
Challenge two: Greater competition & pandemic impact. Pharmacies were confronted with challenges before the pandemic. These included below-cost prescription rates and decreasing reimbursements. They saw reduced foot traffic because of stay-at-home orders, with the delay of elective procedures and job losses due to the pandemic leading to the shrinking of health insurance coverage.
There are also more competitors. US ecommerce giants entering the pharmacy business, large warehouse club retailers now offering same-day pharmacy deliveries, and large chain pharmacies eating up more market share.
Challenge three: Regulation barriers. Influencing the margins of pharmacies are current geographic restrictions on providing telehealth services as well as federal proposals for lowering prices.
Although the pandemic spurred the relaxation of some digital pharmacy regulations (telehealth is allowed in some shape or form in all 50 states), there are 32 states that still restrict pharmacy ecommerce services. In addition, there are still 26 states that do not allow the practice at all.
There is another new development related to the public outcry for lower prescription costs, as the growing disparities in pricing between the US and other industrialized countries have led to efforts to regulate costs through price controls.
So the current ecommerce landscape for pharmacies is a complex one that presents strong challenges but also great opportunities, which we will look at in another article.