Blog Post

Will E-Tailers Fly Past the Corner Drugstore?

Lawrence Lerner • February 8, 2024

Time to innovate or perish

CVS eyes pharmacy growth in 2024 with difficulties in urban locations, a decline in the relevance of their non-pharmacy business, and online competitors eating away at select products; the question is, How?


Competitors such as Amazon Pharmacy, with its vast logistics network, including drone delivery in select locations, aim to make prescription medication access faster and more affordable. 


Amazon focuses on price transparency and affordability, offering services like RxPass, a subscription for Prime members, and integrating manufacturer discounts into the checkout process. This heightened competition forces traditional pharmacies to adapt by providing more transparent pricing and exploring innovative delivery solutions. 

The sunk cost of physical retail is a boon and a burden. On one hand, the cost of running a location is high, and with other revenue streams, the ROI is more straightforward. 


Online providers hold the upper hand and remove the logistics, rental, and people costs of running a store. Products and services such as photo printing, magazines, 

electronics, and assorted household supplies are more economically or conveniently purchased online or at the growing grocers who continue adding new merchandise categories.

Due to rising business costs, CVS closed some stores or in-store locations at Target around the US. So, what to do?

Can CVS innovate, remove the non-PBM (Prescription Benefits Management), and add more health and in-store services? Are other services such as pet wellness, grooming, and related services partnering with national vet clinics like Banfield? With a smaller footprint, can pharmacies be more affordable in select locations?


Recap


  1. #InnovateOrStagnate: With e-tailers like Amazon Pharmacy reshaping the landscape of prescription medication access through innovations like RxPass and drone delivery, how can traditional pharmacies like CVS reimagine their role in the healthcare ecosystem? Is the future of pharmacy about more than just filling prescriptions? Share your thoughts on how CVS can transform challenges into opportunities for growth."
  2. #BeyondTheCounter: As CVS faces the dual challenge of declining foot traffic in non-pharmacy departments and fierce online competition, what unique in-store experiences could make their physical locations a must-visit destination? From health services expansion to partnering with vet clinics for pet wellness, what's your vision for the pharmacy of the future?
  3. #RetailRevolution: "Considering the significant sunk costs associated with physical retail locations, how can CVS leverage its extensive network of stores to offer something that online giants can't match? Could integrating comprehensive health and wellness services and innovative delivery solutions be the key to revitalizing the traditional pharmacy model? Weigh in on how CVS can lead the retail revolution.

ABOUT THE AUTHOR

Lawrence


I translate the CEO, Owner, or Board vision and goals into market-making products that generate $100M in new revenue by expanding into geographies, industries, and verticals while adding customers.


As their trusted advisor, leaders engage me to crush their goals and grow, fix, or transition their businesses with a cumulative impact of $1B. 


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