retail news in context, analysis with attitude

Reuters reports that Amazon "is considering the launch of brick-and-mortar pharmacies in the United States … The talks are mostly exploratory and any meaningful rollout of stores can take more than a year," the story says.

Amazon has not commented on the story, though a spokesperson did say that the Amazon Pharmacy division "is focused on making at-home delivery pharmacy easier and more convenient for customers."

Reuters notes that "the e-commerce giant launched an online pharmacy in November for delivering prescription medications in the United States and stirring up competition with drug retailers such as Walgreens Boots Alliance, CVS Health and Walmart.

"The move was built on its 2018 acquisition of PillPack, which Amazon said would remain separate and cater to customers who need pre-sorted doses of multiple drugs.  The company, founded as an online bookseller, has disrupted multiple industries including retail and technology, and its potential move into the physical pharmacy space will pit it directly against established players."

Axios provides some perspective:

"Amazon still isn't disrupting the prescription drug industry. Amazon is maybe, possibly considering a way to capture a marginally bigger piece of the extremely small slice it has … Amazon owns approximately 500 Whole Foods stores.  If Amazon built and staffed up pharmacies in each of those stores, along with some standalone pharmacies, its footprint would pale in comparison to the pharmacies owned by CVS Health (9,900), Walgreens (9,000), Walmart (5,000), Rite-Aid (2,500), Kroger (2,300) and other chains.

"As we reported in 2018, after its purchase of online drug retailer PillPack, Amazon 'will have to build or acquire more parts to make a big difference.'  More pharmacies, or a pharmacy benefit manager, would likely need to be next — if Amazon even proceeds with this direction."

KC's View:

Disrupting the drug store business would seem to be right in Amazon's philosophical wheelhouse, but I have no idea whether it makes sense to create yet another bricks-and-mortar format at this point.  I wouldn't think so, but I could also be suffering from a lack of imagination.