Pharmacies surge online

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Drugstores may no longer have a lunch counter, but they are popular spots popping up on every corner of the Internet.

Drug Emporium, an Ohio-based retailer, has supplemented its 179 retail locations in 21 states with DrugEmporium.com, which offers drugs, products, news, information and product sponsorships.

With 2,800 retail outlets, Eckerd Corp., a subsidiary of J.C. Penney Co., began selling prescription drugs online in November. Walgreen Co. revamped its site in October to prepare for greater e-commerce, from drugs to toiletries.

ASK QUESTIONS

Take Arrow Pharmacy & Nutrition Centers' FamilyMeds.com, for example. The company backs up more than 70 brick-and-mortar locations with a robust e-commerce and information site that matches the interaction and education customers might find in the stores. Content such as an "Ask Your Pharmacist" column allows consumers to e-mail questions about particular drugs or conditions to a pharmacist.

Then there's the online-only sites. PlanetRx.com, Drugstore.com and AdvanceRx.com are among the cyber-druggists vying for customers in this emerging venue.

It's getting crowded in the world of online druggists.

"This business is not a media play, it's a customer play. We're trying to get closer to the customer and where they live, their media habits, their lifestyles," says Brad Mitchell, senior VP-chief marketing officer of the online division of DrugEmporium.com, which debuted in 1997 but relaunched last fall. "At the end of the day, to close the customer, you have to be close to the customers."

In a recent Forrester Research survey of 100,000 online consumers, 33% said they shop online for health-related products. Competition for those consumers is expected to grow as battles between content sites and online pharmacies blur into online turf wars.

Consolidation and significant fallout within the next two years is expected, says Elizabeth W. Boehm, an associate analyst with Forrester.

The sites have quickly learned to expand beyond a place to get prescriptions filled or refilled. Eckerd.com has "Learn & Live Right," a content area with information on topics ranging from arthritis to diabetes to weight control. CVS.com, which has a partnership with Internet company WebMD, offers a weekly pharmacist-penned column on topics such as head lice, upset stomachs and dry skin.

DrugEmporium.com has developed a dozen Healthcare Shops, which provide targeted products and information based on health conditions or ailments, including allergies, baby care and cold care. The sites also strive to go beyond typical shelves of retail drugstores. For instance, among the products DrugEmporium.com offers that its storefront sister does not stock are spa items and higher-end goods.

"Customers are looking for sites that can deliver commerce, content and community in one place," says Dennis Joyce, director-marketing communications at PlanetRx.com.

HIGH EXPECTATIONS

"There is a higher level of expectation. It's about 24-hour access to pharmacists and a network of people from around the country. If you simply come online to sell product at a discounted price, you definitely have to add more value. That's the expectation of the online shopper."

The motivator to create these sections within the primary Web sites is to add relevance to consumers visiting the site, says Mr. Mitchell. To be sure, the content draws sponsors, which will spawn revenues for the operator. But the content brings customers back, he says.

"This business model is not driven based on advertising," says Mr. Mitchell, who places e-mail messages, keyword searches and banner ads for the site on AOL, Snap.com, Coolsavings.com and drkoop.com as a way to lure customers. Work is handled in-house with project creative outsourced.

"This is an e-commerce site, and that's what drives the revenues."

Drugstore.com, has made similar forays. With information on health, beauty, wellness, personal care and pharmacy products, the site claims about 700,000 customers since its debut in February 1999. The Web company acquired online seller Beauty.com in February.

In 1999, drugstore.com, Rite Aid Corp. and General Nutrition Cos. created a strategic alliance. Now, customers can order prescription drugs online for same-day pickup at a Rite Aid drugstore. Similarly, GNC products can be ordered online through Drugstore.com for mail delivery. Drugstore.com advertises on America Online, Yahoo!, Discovery Health, MSNBC, OnHealth, ThirdAge, Medscape, Intellihealth and Women.com.

Brick-and-mortar stores increasingly are making their click-and-mortar play. While it had a site previously, Walgreen Co. debuted its e-commerce site in October 1999. The site offers no advertising but includes an exclusive relationship with the Mayo Clinic, offering news and drug information to online viewers.

LOGGING RX ORDERS

The company, which registers 5,000 new users weekly, added its 100,000th registered user in January. These users currently log 2,300 prescription orders daily, though most are for pick-up at any of 3,000 stores, according to Walgreen data.

The company soon will sell thousands of toiletries and other non-drug items on its Web site.

With more than 15,000 healthcare-related sites on the Internet, standout sites will create synergies between e-commerce and content to win customers, says Ms. Boehm. "Winning sites will construct marketing campaigns and choose partners that etch their brands in consumers' memories as a medical resource, not just a cool content source."

"We're not so much competing against competitors as we are against ingrained shopping habits," Mr. Mitchell says. "That's our competition. It's a huge market, and there's room for several successful players."

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