Why retail pharmacy is booming
The U.S. pharmacy industry continues to set a high bar for delivering superior levels of customer satisfaction in both the brick-and-mortar and mail-order segments.
According to the J.D. Power 2018 U.S. Pharmacy Study, key factors driving the highest levels of customer satisfaction are the availability of health and wellness services in brick-and-mortar pharmacies and the timeliness of delivery for mail order pharmacies.
"The retail pharmacy business has been in the spotlight ever since Amazon announced in June 2018 that it's getting into the space," said Greg Truex, Senior Director and Healthcare Practice Leader at J.D. Power. "Amazon, or any other organization looking to disrupt the $100 billion U.S. mail order pharmacy market, will have their work cut out for them. Legacy pharmacy players have invested heavily in delivering superior service, while brick-and-mortar pharmacies are starting to reap significant customer satisfaction gains from retail-style clinics offering health and wellness services."
Amazon’s acquisition of PillPack in June is one of the strongest indications of the company’s intent to disrupt the pharmacy and health-care industries. Amazon is threatening to remove one of the few distinguishing factors pharmacy chains have relied on: the sale of prescription drugs. Retailers such as Walgreens Boots Alliance, CVS Health and Rite Aid have seen their front-end sales threatened as shoppers increasingly buy household staples online or from convenience stores. Shares of all three companies tanked when news of the acquisition broke, along with shares of drug distributors Cardinal Health, AmerisourceBergen and McKesson.
Key findings of the J.D. Power study include:
Retail health clinics paying dividends in customer satisfaction: Among brick-and-mortar pharmacies, the key driver of overall customer satisfaction is the availability of health and wellness services. Availability of these services is associated with a 66-point improvement in overall satisfaction. Such services are currently present in 86% of chain drug stores, 83% of supermarket pharmacies and 75% of mass merchandiser pharmacies
On-time delivery is priority for mail order pharmacies: Among mail order pharmacies, the key driver of overall customer satisfaction is having a prescription ready/delivered when promised. Delivering prescriptions on time is associated with a 78-point increase in overall customer satisfaction. Customers also evaluate the speed of delivery, adding 42 points to overall satisfaction scores when prescriptions are received within five days of completing an order.
Service with a smile still matters: Amidst the talk in the industry about distribution channels, supply chains and drug costs, some of the most significant drivers of customer satisfaction in all pharmacy segments includes friendly, engaging service. Among brick-and-mortar pharmacies, the second-most effective driver of overall satisfaction is "non-pharmacist staff greeted you in a friendly manner," which is associated with a 64-point increase in customer satisfaction. Even in the mail order segment, a "thank you" from non-pharmacist staff is associated with a 17-point increase in satisfaction.
To read the entire report, click here.