Worries that Amazon.com Inc. will crush the retail pharmacy market can be shelved for now. That’s the view according to survey results from Evercore ISI.
The findings showed that just 7% of U.S. households ordered over-the-counter drugs online instead of visiting a brick-and-mortar store, the survey of 2,500 adult consumers revealed. While online sales of over-the-counter medicine sales rose by 21 basis points from 2017, the growth is at a considerably slower rate than other industries and offers a glimmer of hope for the likes of CVS Health Corp. and Walgreens Boots Alliance Inc.
The lack of excitement from consumers is “great news for drug stores, where investors have been worried about Amazon entering the market for several years,” possibly crushing the retail pharmacy market, analysts led by Ross Muken and Elizabeth Anderson wrote in a separate report.
The analysts noted that worries over Amazon’s penetration can be put on hold for the short-to medium-term. But drug stores will need to continue their “evolution of the front end or risk going the way of the dinosaurs,” the analysts continued.
The survey may reassure investors who have continued to fret since Amazon bought online dose-sorting pharmacy PillPack Inc. last year, and continued to expand a national mail-order service presence. The tech company’s steps to expand into prescription distribution is expected to put incremental pressure on CVS Health and Walgreens store sale.
— Read Walgreens CEO Says His Company Will Survive the Amazon Threat, on ThinkAdvisor.