Dive Brief:
- Walgreens has partnered with FedEx to launch a next-day prescription delivery service, the company announced Dec. 6. Walgreens claims the move, part of the company's Walgreens Express service, earns it the distinction of fastest prescription delivery in the U.S.
- A text alert system will send notifications for prescriptions ready for pickup, and a mobile device process enables patients to have the prescriptions delivered the next day. In some markets, same-day delivery is already available, with expansion expected to come in 2019.
- The Express service also allows patients to preview cost, prepay for eligible prescriptions and select whether they want home delivery or to pick up in store via an express checkout line.
Dive Insight:
Walgreens' desire to maintain market share in the midst of disruption likely led to its partnership with FedEx. Consumers expect efficiency in delivery — either next-day or easy in-store pick up — and Amazon and Wal-Mart have led the way in pushing faster service.
Competition, meanwhile, between Walgreens, CVS and Amazon will likely be fierce.
In June, CVS — which had previously announced its intention to establish a similar delivery service — finally added it to its repertoire of services with the help of the U.S. Postal Service.
CVS' service, which shares the same price tag as Walgreens at $4.99 per delivery, enters a last-mile market that is notoriously high cost. The retailer will rely on USPS which, for all its own reported financial woes, still maintains strategic last-mile advantages that can be hard to beat.
Both incumbents face a new competitor in Amazon. The internet retailer's June announcement of its acquisition of online pharmacy PillPack, combined with its promise of low-cost delivery was, according to Walgreens Boots Alliance CEO Stefano Pessina, "a declaration of intent."
While Amazon's service has yet to launch, the company will likely seek to leverage its massive reach and expertise in fulfillment and last-mile delivery to carve out market share.