Inside: People want delivery today. Whether it’s for their monthly vitamins or their lunch. Discover what the rapid rise of delivery services in retail means for your independent community pharmacy and how to start your own pharmacy delivery service.
With a call or click, people today can get nearly anything they need delivered to them.
A growing market
The demand for delivery has grown faster than you can open an app on your smartphone. Experts predict food delivery service alone to be worth $76 billion by 2022. In just the last five years, restaurant deliveries rose 10 percent. Restaurants in metropolitan areas have had to turn customers away because demand is so high.
What started primarily as a food industry service has spread to almost every other sector of retail. Every day more retail businesses add delivery to their repertoire in response to growing expectations
“Delivery is a huge, growing market. And it is changing our culture,” said Daniel Levine, a trends expert, keynote speaker, and founding director of the Avant-Guide Institute, a leading authority on social trends driving the global marketplace. “It’s the future for retail businesses and consumers alike.”
Following the trend
Retailers that don’t offer delivery are becoming increasingly rare. In an age where consumers summon everything they want from the comfort of their homes, can independent pharmacies afford to miss the bandwagon?
The big players think it’s worth it. CVS added delivery at all its locations across the U.S. And, Walgreens, Walmart, and Costco all offer some form of prescription delivery. Amazon’s $1 billion purchase of PillPack shows how much value the retail giant forecasts for the prescription delivery business.
“The ‘Uberization’ of pharmacy has created a marketplace expectation for easy access and delivery,” said Suzette DiMascio, CHE, CMCE, CPC, President and CEO of the CSI Specialty Group, a leadership, strategy, and talent consulting firm in the specialty pharmacy industry. “In metropolitan areas, delivery, once the great differentiator, has become the expected norm.”
A new source of revenue
Some sources estimate that a delivery service boosts pharmacies’ revenue 6 to 8 percent on average within the first four months. If the restaurant industry is any indication, those percentages reflect the low-end of growth pharmacies could experience with delivery. In an industry where margins continue to plummet, the bump in revenue could be a big deal for business.
Studies also show that home delivery increases patients’ adherence, especially for those with chronic conditions. If your patients with chronic conditions boost their adherence, they’ll boost your revenue, too. Why? Refilled medications earn more revenue than those left on the shelf.
Gaining new patients
Prescription delivery can also deliver new patients through your doors. In a survey by Drug Store News, 70 percent of patients said location mattered most when it came to their pharmacy. For independent pharmacies that can’t afford to build more brick-and- mortar locations, that’s an issue.
But delivery broadens your footprint. It enables you to reach patients who otherwise wouldn’t come to your location. “When a retail business like an independent pharmacy offers delivery, they expand their ‘storefront’ to an entire neighborhood,” Devine said. “The business is no longer constrained by location, so they become accessible to everyone, and anytime.”
The Drug Store News survey also revealed that 94 percent of patients care about convenience above all else. And, delivery offers the supreme convenience.
Making it work
Starting a delivery service doesn’t come without risk. If not done well, it could do more harm than good.
“For retailers, delivery poses an entire set of challenges that most sellers are not equipped to handle,” Devine said. “This includes a minefield of customer service issues, like late delivery and missing items, to name just two. The biggest challenge with delivery is if you get it wrong, it becomes a huge mark against you, one that can ricochet around the web’s many social media and review sites.”
As with any new service, administrative responsibilities increase. Make weighing the burden of these requirements against the benefits of offering a delivery service your starting point.
And, the time and attention required to successfully incorporate in-house delivery, both from a logistics and workflow standpoint, might not serve your pharmacy business best. “Having a process that is labor intensive doesn’t allow you to focus on growing your business. You get in the rut of managing your business,” Potts said.
If you want to outsource delivery, you have options. Companies like Speedlink Courier Services supply drivers guaranteed to make same-day deliveries.