Study Reveals: Potential Launch of Amazon Pharmacy Has High Effects on Pharmacy Market in UK
The British are ready for Amazon Pharmacy, the company can rely on its customer intimacy and awareness. More than 40 percent of regular Amazon customers would use the mail-order giant’s pharmaceutical offer.
London, August 19, 2021 – With Amazon already a very strong distribution channel for OTC products in the UK, it is only a matter of time before Amazon leverages its already registered trademark and also launches Amazon Pharmacy, which will have an even greater impact on the market. Study* results by Simon-Kucher & Partners, a global strategy and marketing consulting firm, reveal that among UK customers that are already Amazon Prime users 47 percent would choose the company’s pharmacy platform for drug purchase. The study, based on a representative sample of about 1000 individuals in the UK, also suggests that even 10 percent of customers who currently do not buy regularly from Amazon said they will use Amazon Pharmacy once it is available in UK.
Christian Rebholz, Partner at Simon-Kucher & Partners: “Considering these numbers, it can quickly lead to 20 million potential British customers for Amazon Pharmacy in one fell swoop. It would immediately gain a significant market share and be among the top online pharmacies in the UK. Existing platforms and pharmacies must get prepared and find a way to retain their existing customers and take advantage of their omni-channel presence.”
Convenience and price as main reasons for Amazon Pharmacy
Asked for the reasons why buying their OTC and Rx drugs at Amazon’s new platform, respondents said that especially a delivery free of charge is crucial, followed by price and an already existing amazon prime account.
But there are also reservations about the new market player: Consumers who are not willing to buy at Amazon Pharmacy mention the lack of additional services (e.g. nutrition, support to quit smoking, etc.) and Amazon’s lacking competency in the area of pharmaceuticals. Additionally the loyalty to an existing pharmacy plays a significant role.
Graham Tatham, partner at Simon-Kucher’s London office: “Amazon Pharmacy would be a highly influential stakeholder for all other market players. Especially many OTC manufacturers may be pressured by their market power, leading to a strong position for Amazon in negotiations. A possible introduction of its private label brands would result in an even higher pressure, especially for manufacturers of easily substituted products and generics. One key aspect for every consumer health company’s strategy should also be to establish and build a direct to consumer relationship.”
*About the study: The representative study "Effects of Amazon Pharmacy on the UK pharmaceutical market" was conducted by Simon-Kucher & Partners in spring 2021. A total of 1000 consumers in the UK were surveyed. The focus was on their shopping behavior in online pharmacies and their willingness to use Amazon Pharmacy.