Amazon plans to expand its drug delivery business as the company seeks more ways to insinuate itself into the daily lives of everyday Americans. The move would see the largest online retailer in the United States compete more directly with pharmacy retailers like CVS and Walgreens.
Richards said Amazon will double the number of cities with same-day delivery of medications next year, in part by building pharmacies in existing same-day delivery facilities that are “integrated directly into Amazon’s core logistics network.”
Amazon’s expansion could pose new challenges to CVS and Walgreens, which over the past year have struggled with labor issues and closed locations as the retail landscape shifts. Amazon has been a major driver of those changes, and by expanding its drug deliveries could offer more consumers the option of avoiding a trip to a physical store.
Amazon Pharmacy was built on Amazon’s 2018 acquisition of Pillpack for nearly $1 billion. The company has experimented with different offerings, such as the generic drug membership RxPass. But Amazon Pharmacy has also been slow to gain momentum, despite flashy announcements last year such as drug deliveries by drone.
“As pharmacy deserts grow, digital-first pharmacies like Amazon offer a solution to care gaps,” the company said Wednesday.
The company also announced new efforts in the grocery space during an event Wednesday in Nashville, which focused on logistics, operations, and robotics, and was hosted outside an advanced robotics fulfillment center. Amazon said it is testing an offering in Phoenix that will allow customers to shop for groceries and Amazon’s online consumer goods simultaneously, and have items ordered from different stores delivered as part of the same shipment.
Amazon needs to find new markets to dominate to sustain its rate of growth. It has repeatedly highlighted health and grocery spaces as opportunities. (Amazon founder Jeff Bezos owns The Washington Post.)
Amazon, which bought high-end grocery retailer Whole Foods in 2017 for $13 billion, has struggled to grow its grocery business, which includes Amazon Fresh, a high-tech, lower-price-point brand it scaled back last year. Amazon has been testing new markets and offerings such as Amazon Saver, a low-cost food brand that launched last month, and making more Whole Foods brand products available with Amazon Fresh deliveries.
