Amazon already has a deep hook in the book, retail, delivery service, music, video, restaurant and even grocery space. It looks like healthcare is its next big target. Healthcare is a broad arena tangled in complexities. Most consumers struggle with understanding the lingo, getting quality care, managing payments and getting the prescriptions they need without breaking the bank. There are many controversial parts to how our healthcare system works, and Amazon has just tossed its hat into the ring with its announcement of its purchase of online pharmacy PillPack. What does this mean for the pharmacy space and will it impact the larger healthcare system?
The Amazon Threat Boils Down to Trust
Our team at Market Strategies has been anticipating the announcement of Amazon entering the healthcare market, so we conducted a self-funded a study to find out if consumers are open to purchasing healthcare services and prescriptions through nontraditional healthcare companies. We know that consumers have a high level of trust in Amazon, but will this level of trust extend to its healthcare services?
Our healthcare research study not only shows that shopping habits for healthcare products among a general, nationwide mix of consumers are highly concentrated on digital methods, but that Amazon garners high brand trust and a corresponding willingness among consumers to purchase healthcare products and services through Amazon’s platform. Overall, offering consumers the option to fill and mail prescriptions looks like a relatively simple add-on to Amazon’s current model and Prime membership, and consumers are willing to give Amazon a try. Because Amazon already garners higher brand trust and customer satisfaction compared with traditional and established pharmacies, it is positioned well to capture a competitive advantage in the pharmacy space. Unfortunately, many traditional and established pharmacies will be fighting against historically much lower ratings.
The Upside for the Pharmacy Space
While consumers are open to embracing digital methods and technology, our customer experience research study finds that consumers’ largest reported barrier to using Amazon for prescription mail orders is purely their preference for using their current, existing system. And consumers’ largest barrier to using digital technology to manage health is their concern about patient confidentiality and security—not surprising given the history of several complex data breaches over the past few years.
This may be good news to pharmacies and pharmacy benefit managers hoping to capture and retain their consumer base, it is also a message for them to adapt to evolving consumer needs to maintain a strong relationship. It will be important to leverage trust and deliver on other brand promises and commitments. To stay relevant among consumers who are becoming more tech savvy and consumer-centric, providing ease, convenience, quality products and services, transparent pricing and exemplary customer service is critical. Implications for broader healthcare companies also mean that offering digital and technological methods to access healthcare, such as through apps, on-demand virtual healthcare and in-home care, will be important in staying ahead of the curve.
It will be interesting to watch trends as healthcare continues to converge with digital technology. Our Healthcare and Technology Research teams have been noticing the convergence of these markets at an increasing pace over the last decade. Sign up for our newsletter to stay informed. We will be tracking health tech and digital trends in healthcare as part of our future self-funded research studies. Next, we will measure consumer sentiment toward the recent Amazon employee healthcare offering through the Berkshire Hathaway and JPMorgan Chase venture and gauge consumer willingness to purchase healthcare from other nontraditional sources.
We offer holistic understanding of how healthcare and technology will continue to integrate, with deep expertise across both health and technology sectors. Contact us for more information or how we can help with your business needs.
About the Study
Market Strategies interviewed a national sample of 1,003 consumers aged 18 and older between April 4 and April 6, 2018. Respondents were recruited from the Full Circle opt-in online panel of US adults and were interviewed online. The data were weighted by age and gender to match the demographics of the US population. Due to its opt-in nature, this online panel (like most others) does not yield a random probability sample of the target population. As such, it is not possible to compute a margin of error or to statistically quantify the accuracy of projections. Market Strategies will supply the exact wording of any survey question upon request.