GUEST COLUMN
Beating Amazon at its Own Game
Amazon is a force, but a tried-and-true strategy of differentiation could help retail pharmacy compete By Andrea K. Leigh
Andrea K. Leigh is an e-commerce educator, entrepreneur and 10-year former Amazon executive with more than 20 years of e-commerce experience. Leigh is founder and CEO of the Allume Group, an e-commerce education and community company.
Amazon’s success, bolstered by the pandemic-driven shift to e-commerce, is inarguable. With revenue of $302 billion in 2021 and more than 157 million Amazon Prime members, the company is a formidable competitor to most retailers. What’s more, it is now expanding into the pharmacy space with its “Basic Care” private label line of over-the-counter medications and Amazon Care clinic launches. While Amazon may seem like it’s doing everything right to win the customer, it also faces significant challenges and limitations. Shopper trust continues to be a struggle, as Amazon appears in the news regularly with claims of counterfeit goods and fake reviews. The lack of curation creates headaches for shoppers. Buying cross-category in a one-size-fits-all shopping experience can be challenging for shoppers, and for conversion. Lastly, a pure-play e-commerce model presents financial headwinds to long-term profitability in the retail pharmacy space. While it’s tempting to race to beat Amazon at its own game — offering the fastest ship-to-home options and earth’s largest selection — retail pharmacy is a long-standing retail format that shoppers know and love. Many retailers have spent decades honing their assortment strategies, understanding their customer, and developing trust and training their staff to help guide shoppers to live their best life. The limitations of e-commerce marketplaces present retail pharmacy with an opportunity to differentiate — and win. Rather than focus on the fastest shipping or largest assortment, a tried-and-true strategy of differentiation will likely produce the best outcomes. Below are four ways to sustainably win against e-commerce giants like Amazon. 1. Build and leverage a trusting relationship with shoppers. For Amazon, shopper trust has wavered in recent years,
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compromised by risk of counterfeit goods, third-party sellers and fake reviews. With a low barrier to entry for third-party sellers to list their products, digital marketplaces are ripe for safety issues, often being cited as the least trustworthy sources for products we put in or on our bodies. In fact, 23% of U.S. shoppers describe themselves as being “hesitant” to buy supplements online. As Marketplace Pulse’s Juozas Kaziukenas reported to The Verge in 2019, “The same powers which built Amazon, which is the infinite shop, the infinite shelf, and the open marketplace, is also what’s now causing many of the issues it’s having — the counterfeits and frauds like this hijacking.” Retail pharmacy already has a leg up on Amazon when it comes to relationships, given the human element, product knowledge and expertise available in physical stores and through pharmacists. Ensure you’re fully exploiting this advantage by taking a few extra steps to build shopper trust, both in-store and online: • Make sure the shopper knows that, as a retailer, you carefully select your products and suppliers to maximize quality and safety. Tell this story to your shoppers through your website, signage, email communications and more; • Carefully vet your e-commerce experiences for fake reviews. Take swift action when you find them to protect the shopper experience; and • If you offer marketplaces, slowly add sellers you know and trust, and put thoughtful programs in place to police their actions. 2. Present a curated assortment plan that has a point of view. As more shoppers transition purchase behavior to e-commerce,
August 2022 DRUGSTORENEWS.COM
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