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Subscription pharmacies vs drugstore giants: Understanding the competitive landscape

You can get literally anything delivered these days. Need a toaster? Delivered. A Couch? Delivered. Chicken eggs ready for incubation? Delivered. So it only makes sense that life-saving prescriptions should arrive at your door when you need them, right? 

That’s where online pharmacies come in. Gone are the days of taking time out of your day to loiter around the drugstore, reading odd shampoo labels and magazines while your prescription is filled. With companies like PillPack and Capsule, you can now order prescriptions online and have them delivered to your home on a monthly basis.

These startups have changed the competitive landscape of the industry and forced brick-and-mortar drugstores to adapt, but have they delivered on their promise?

Knowing your competition in business is crucial. We used Relative Insight to compare online reviews for PillPack and Capsule against reviews for the big three American pharmacies (CVS, Walgreens and Rite Aid) and better understand the competitive landscape facing these companies.

Easy Peasy

Both Capsule and PillPack customers valued accessibility. Compared to traditional drugstores, reviews for online pharmacies were more likely to mention words like ‘easy’ and ‘convenient.’ While the references to ‘convenience’ were almost always positive for Capsule, PillPack reviewers also used these words to describe how the service has let them down (ie. It’s ‘easier’ to pick up medication at the store)

competitive landscape insights

Top tier customer service

Capsule couriers and customer service representatives were routinely described as ‘friendly,’ ‘responsive’ and ‘nice.’ CVS, Walgreens and Rite Aid employees – on the other hand – were not described as so accommodating. Specifically, reviewers used the words ‘unprofessional’ and ‘rude’, and were 5.5x more likely to describe drugstore employees negatively. Ouch!

Packaging

Never underestimate the power of good branding! Customers made it a point to commend Capsule’s minimalist yet modern packaging, which is a simple brown bag with a cutout handle and electric blue prescription bottles. In addition to stylistic compliments, customers also valued the discrete nature of the design.

The bottom line: Price

The grass isn’t always greener. Many reviewers were unhappy with their online pharmacy experience, particularly when it came to price. Compared to CVS, Walgreens and RiteAid, PillPack reviews were 5.5x more likely to reference costs and charges associated with the service. While delivery is free, some people claim they were overcharged for their prescriptions.

Whether it’s friendly customer service or killer packaging, this competitive landscape analysis shows that online pharmacies are doing something right. PillPack was acquired by tech giant Amazon in 2018 for a cool $753 million. In response, CVS, Walgreens and RiteAid now offer their own prescription delivery services. While we still don’t know if the top three will remain on top, it looks like they could learn a thing or two from their emerging competitors.

Interested in learning more about how Relative Insight is helping customers combat disruption with valuable competitor intelligence? Watch our webinar, ‘Giant Killers’: The Tale of Challenger Brands.

Better competitor intelligence awaits