Ruchin Kansal, VP and digital business strategy leader for the healthcare, insurance and life science industries at Virtusa writes how tech giants such as Amazon and Google are beginning to threaten high-street pharmacies.
High street healthcare pharmacists are at risk of being shut out of their own industry by tech challengers. Amazon’s recent acquisition of prescription delivery company PillPack and Google’s R&D biotech business Calico, launched back in 2013, are just two of many examples out there of strides tech giants are making in the health industry. Though there is more stringent regulation for would-be disruptors to overcome in the UK health industry, recent medication delivery initiatives in other countries, such as Pharma Express in France or Deliv Rx in the US, demonstrate the demand for this type of service. At some point, the system will have to bend to the consumer and the tech giants are the natural best fit to provide such a service with the ecosystems they already have in place.
These companies have spent the past decade accumulating information on consumers and learning about their lifestyles. It will be very difficult for the likes of Boots or Superdrug to compete with this level of personalised customer knowledge, especially considering the ease the consumer already has when using platforms like Amazon, Facebook and Google. This data, coupled with the devices from the tech giants that are already commonplace within our homes and general lives, mean we could soon see our entire healthcare journey being handled in one place. This would leave all other players outside of the health ecosystem that forms the basis of their business. To survive this tech disruption, high street pharmacists must act now, without delay.
Owning the customer journey
Tech giants already have infrastructure in place that can be harnessed when it comes to healthcare disruption. From voice assistants that can offer and direct users to medical advice, to the Amazon Dash Buttons that reorder supplies when they begin to run low, these tools help businesses to better understand the customer. This in turn can help them to personalise their experience, for example by making predictions on products they may want to buy alongside a certain purchase or how frequently they run out of a particular product. If deployed in healthcare, these insights can be used by tech giants to tailor the entire customer journey – offering customers what they need, when they need it, without them having to ask. When coupled with the types of acquisition these companies are beginning to make in the space, tech giants will have the ability to provide a comprehensive, personalised and convenient healthcare service that customers will favour over current high street players that still largely rely on the bricks-and-mortar model.
In the new, always-on digital economy, customer experience is everything. Consumers want everything at the click of a button on their preferred device; be it shopping, banking or booking a holiday – why should healthcare be any different? When the tech giants are able to offer this as a service, customers are bound to choose, say, Amazon – especially if the company is able to diagnose, share tips on treatment and deliver any necessary medication or equipment that can alleviate symptoms. Though high street healthcare chains certainly have brand visibility, they have largely stuck to a bricks-and-mortar formula. As we have seen with other household names that have disappeared from our city centres, the in-store model is no longer sustainable long term. The modern customer doesn’t care who fulfils their needs or delivers them a service, they simply want it done in a quick, convenient and personalised way – bread and butter for tech giants like Google or Amazon.
Futureproofing against the tech threat
So then, what can be done? Well, high street pharmacists must first decide on how they are to tackle the tech threat. Will they up their online offering and try to compete with tech disruptors that way? Is the plan to focus on the in-store experience by expanding their offering there? Or will they partner with tech giants and use their platforms to open new storefronts?
Any which way high street healthcare chains decide to slice it, building a niche within the market is essential to stand out from the crowd when tech disruption takes place. If they are to compete with tech disruptors on the online experience, websites must become more user-friendly, with add-ons like speedy delivery services and online appointments made available.
For companies opting to focus on the in-store experience, Superdrug’s recent financial figures are a great example of how to take customer insights and pivot accordingly. The company cashed in on a marketing deal with TV show Love Island, popular with its target customer audience, and began offering its own Botox and fillers service amid a surge in demand for such procedures.
Another option would be to partner with tech giants. This can expand potential customer base, provide data that can further develop insights for meeting customer demands, and help shape new, still unknown business models. Ping An in China offers a health app, “Good Doctor,” which has connected hospitals, payers, doctors, drug stores, and diagnostics centres to provide seamless healthcare services, both traditional and digital, to customers. More than 7,500 pharmacy outlets are on this platform and fulfil have access to more than 193 million subscribers of the “Good Doctor.”
Whichever avenue high street pharmacists decide to go down, preparations for tech disruption must start now if these companies are to survive looming tech disruption.
Accepting the eventuality
The tech giants have already demonstrated their ability to make waves in industries outside of their usual stomping ground, with Amazon’s acquisition of Whole Foods in 2017 serving as a great example. The deal sparked concern within the grocery industry, with other players rushing to carve out their distinct niche in the market before full-scale disruption commences. Healthcare is no different – businesses need to recognise that the likes of Amazon and Google have incredible resources and personalised customer data that will immediately set them apart in the industry.
The one saving grace is that healthcare does still carry more rigorous regulation than other industries, meaning tech giants do still have hurdles to overcome. However, preparations must begin as soon as possible, as those that do not have strategies in place when the tech giants descend on healthcare will find themselves at a serious disadvantage.