Rapid digital commerce transformation for retail pharmacies

Jade Maravillas
Jade Maravillas May 21, 2020
Rapid digital commerce transformation for retail pharmacies

The pharmacy industry has grown to become one of the most successful in eCommerce. In the United States and Canada, digital channels represent an average of 20% of the sector’s sales, according to the América Retail portal.

Consumers, now more than ever, are becoming more aware and concerned about their well-being, scouring the Internet for information and following health and wellness brands on social media. The “new normal” of purchasing online has accelerated across most eCommerce sectors, including health and beauty, with a 44% increase in sales in March 2020 compared to February (VTEX Data).

Crisis brings opportunities

With the lockdown in effect in most countries, there is a massive opportunity for drugstores and pharmacies to go online and expand current digital operations, and for retailers to introduce new product categories to cater to this growing demand. Recently, Walmart announced that they will be acquiring Pillpack, an online pharmacy for just under $1 billion USD; even though Walmart is already the fourth largest pharmacy retailer in the US by prescription revenue (2017). In the UK, Amazon is reported to launch a pharmaceutical business and is hiring a general manager to head this new division that will address a market valued at £12 BN, and still growing at 2% per annum. On the other hand, some brick and mortar pharmacies are shutting down, including British giant Boots which has closed 60 stores in April 2020.

A good example of eCommerce contributing to a pharmacy’s growth in Latin America is Farmacity, an Argentine company that has more than 300 stores throughout the country serving more than five million people every month. The company set itself an ambitious challenge: to migrate its entire digital operations to a new platform in three months and deliver a more personalized shopping experience to their existing customers without losing them during the migration. They decided to implement the VTEX Commerce Cloud platform, mainly due to it being a leader in the region and its scalability and stability.  

“The platform migration was not only executed perfectly, but we also managed to get our numbers to rise, even exceeding our goals,” says Mariano Tordó, Farmacity’s eCommerce Manager. In the first month since going live with VTEX, Farmacity saw transactions increase by more than 35%. Conversion rates also increased by 17%.



A highly regulated industry

While it may sound simple, moving pharmacy operations online is anything but.  Regulatory and legal requirements for selling prescriptions online vary in each market. All retail pharmacies in Great Britain must be registered with General Pharmaceutical Council (GPhC), and registered online pharmacies need to display the GPhC logo, the words “Registered Pharmacy” and their 7-digit registration number before they can dispense medication online. The European Union has similar directives for pharmacies located in their member states, although some countries, such as Italy, do not allow the sale of prescription medication online. Over-the-counter products, however, may be sold online by authorized pharmacies and retailers. 

In the United States, laws for selling prescriptions online vary from state to state. According to the Visa Online Pharmacy Guide for Acquirers, only Massachusetts permits reciprocity of prescriptions from other states. In New York and Alaska, for example, licensure is only required if above a certain number of shipments. There are a few states where only Internet pharmacies certified under the VIPPS Internet pharmacy program can ship drugs (North Carolina, Kentucky, Indiana). A list of VIPPS accredited pharmacies can be found on the NABP website. In addition, Internet pharmacies selling controlled substances must be registered with the DEA and follow strict DEA Internet pharmacy regulations.

Even with the restrictions for selling prescriptions, there is an opportunity for pharmacies to branch out into digital commerce, focusing on over-the-counter medicines, supplements and general health and beauty merchandise including baby, food and beverage products and yes, especially toilet paper and hand sanitizer.



Essential tools for digital transformation

A pharmacy’s digital transformation is a multi-stage process and requires a partner that can simplify the number of technology integrations necessary to achieving this in record time.

In our Digital Commerce Transformation Guide for Pharmacies eBook, we discuss some of the key considerations for pharmacies undergoing digital transformation, whether it’s their first project to go online or reassessing their current omnichannel processes. We also give real-life examples of how our clients implemented actionable strategies that can help complex and highly regulated retail industries such as pharma launch unified commerce operations in as little as two weeks.

The eBook covers:

  • How the right eCommerce platform bridges the gap between online and offline sales channels
  • Differentiating through subscriptions and value-added services
  • Efficiency in business operations
  • Best practices in logistics and multichannel customer experience
  • Compliant, AI-powered personalized promotions and merchandising, and
  • Supporting the community through marketplaces, among others.

Sign up to download the Digital Commerce Transformation Guide for Pharmacies eBook now.