Discover how to optimize your pharmacy delivery service with data-driven pricing strategies to meet customer needs and boost revenue. Learn more now.
Bad headaches and seasonal flu. Running out of prescriptions and needing quick refills. Buying condoms and pregnancy tests. Crowded aisles and long lines. Health risks and safety concerns. Shopping for beauty and wellness.
That's right — more people are choosing online delivery services over traditional stores. Online pharmacies make it easy to order medications online and get them delivered to your home or a nearby pickup spot.
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However, it's an opportunity in disguise. The online pharmacy industry must be prepared to compete in this rapidly expanding market. You could already be in this business or considering starting an online delivery service. Yet, you'll face several critical questions:
Pharmacy businesses are expanding their online presence in retail. Also, the number of people ordering medicine online continues to rise. The demand for pharmacy deliveries saw significant growth during the pandemic. The US-based CVS reporting a 1,000% increase in online prescription orders in the early stages of COVID-19.
The global market for pharmaceutical e-commerce is projected to reach $177 billion by 2026 and $260 billion by 2029, highlighting a substantial business opportunity. However, offering pharmacy delivery services comes with unique challenges in last-mile logistics and pricing that require effective delivery management and customer service.
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When shopping online, consumers prioritize convenience, especially in the delivery experience they expect. Customer preferences vary seasonally, during summer vacations and year-end holidays. Daily, their preferences are influenced by location, schedules, family dynamics, and other shopping habits.
Despite these expectations, e-commerce deliveries often struggle to perfectly fit into customers' specific locations, schedules, and seasonal routines. Pharmacy deliveries, however, are even more contextually relevant—here's why.
Each online pharmacy order is distinct. It is not just due to the specialized nature of deliveries but also because of the diverse product catalogs available.
Pharma retail sells everything from over-the-counter and prescription meds to daily essentials, medical supplies, and skincare products. Orders can range from 5 to 100-200 euros.
This boosts website sales but isn't great for the costs of delivery. If the pharmacy offers free home delivery or charges low fees, small orders with slim margins can hurt profits. This is especially true in a tough economy with careful consumer spending.
Pharmaceutical deliveries are urgent for a couple of reasons.
First, they need special care and handling. Medications and skincare products must be stored and transported carefully. It helps to avoid damage from weather, temperature, humidity, and light.
Second, consider urgent orders for cold medicine or painkillers, elderly patients, or those with high-risk conditions who need quick delivery of their prescriptions. The pharmacy delivery business must ensure it's easy for consumers to get their medication whenever they need it.
What's crucial here is a short delivery time — like same-day or one-hour delivery. Also, suitable options, such as curbside pickup, home delivery or in-store pickup. Storing prescription deliveries in a mailbox or parcel locker isn't ideal for quality, privacy, and safety reasons.
Typically, e-commerce retailers rely on large, remote distribution warehouses.
Because of this, most online orders need a delivery truck to drive several hours across the country. That usually means delivery takes at least two business days for the customer. It takes longer if there's a weekend, a public holiday, or if the delivery is to a remote area. This also leads to higher order fulfillment costs for the retailer.
Online pharmacies must verify the identities of patients before they can buy prescription medications. This is essential for dealing with health products and following regulations. But it can also add extra steps for customers and the pharmacy delivery service if not done efficiently.
Home delivery involves bringing the items directly to the customer's home or business address.
For a pharmacy delivery service, customers usually need to be present to receive their orders, except for contactless drop-offs. Focus on convenience. Make sure your home delivery service matches your customers' schedules and the urgency of their needs.
Online pharmacies often make it difficult for customers to know when they will receive their orders. Also, delivery options are not clear as well as how much it will cost, even though drug deliveries are often urgent and sensitive.
First, provide clear and specific delivery times early on. Pharmacy deliveries can range from a few hours to overnight.
When you clearly present delivery information for each purchase — including times, costs, and available carriers — customers can customize their experience to match their needs and preferences.
Second, offer home delivery services during the day, in the evenings, and on weekends. Emergencies often happen outside regular hours, so partnering with innovative carriers to ensure quick delivery is key.
For instance, some Swedish delivery companies deliver packages along with the morning newspaper during the night. Others offer late evening deliveries between 7 and 10 PM.
This is like regular home delivery, but with a much faster turnaround time. Quick commerce, or on-demand delivery, started years ago and grew rapidly during the pandemic. It was initially focused on delivering urban food orders in as little as 30 minutes.
A key factor for q-commerce companies' profitability is the number of orders they can deliver within an hour. But what happens during off-peak times, like outside lunch and dinner hours? Not much. These instant delivery companies have faced challenges, so they're exploring new revenue streams, including delivering groceries and e-commerce orders, such as medicine.
"Now the next frontier of super-fast delivery is here — medicines to your door in 30 minutes." - Sifted.eu
In late 2021, a German company launched a pharmacy delivery app in Berlin, allowing consumers to get medications delivered to their homes. They began with non-prescription drugs and later expanded to include prescription medications. This expansion was made possible by a regulatory change in early 2022, which allowed patients in Germany to validate prescriptions online. Mayd was the first European service offering instant prescription deliveries, but they won't be the last.
Many online retailers are now adopting an omnichannel strategy to gain a competitive edge. This means selling across multiple channels — physical stores, websites, and mobile devices — in a seamlessly integrated way.
"Limiting yourself to one or two platforms and lacking the seamless integration [...] can be detrimental to your long-term growth." - Shopify
Additionally, micro-fulfillment is expected to be one of the fastest-growing trends in logistics throughout the 2020s. Micro-fulfillment involves processing orders in small warehouses located in densely populated areas, like major cities, which are much closer to customers. Your existing pharmacy store can serve as one of these micro-fulfillment hubs.
Pick Up In Store or Click-and-Collect
If your online store is connected to physical locations, offer customers the option to pick up their orders in-store. They can order online and collect it from a nearby pharmacy at their convenience, avoiding the hassle of inventory issues and long queues.
Store-to-Door Delivery
You can also use your physical stores for same-day and next-day deliveries. Delivery drivers can pick up packed orders from a local pharmacy and deliver them quickly. This method not only speeds up delivery times but also helps reduce your carbon footprint. Research shows that using local fulfillment centers for the last-mile delivery could cut emissions by 17-26% by 2025.
Setting up the right carrier services, delivery prices, and free shipping thresholds can be tough without data insights. But what if there was a way to experiment with your delivery setup?
Offering free delivery on all orders is a popular e-commerce tactic. Many online retailers use it to stay competitive. However, this might not be the best approach for your pharmacy delivery service.
What if your customers paid for delivery? This could cover shipping costs and even generate a profit.
There's a "sweet spot" where charging for delivery might lead to selling fewer products but still making more money.
A common strategy is to offer free delivery when a certain cart value is met, combined with a fixed delivery fee for smaller orders. This can be tricky for pharmacy deliveries due to the wide range of product prices.
If you use a route optimization platform like eLogii, you can easily A/B test your delivery options. The goal is to motivate customers to add more items to their cart to qualify for free delivery. Here's how it works.
How much should you charge for deliveries? Should you offer free home delivery? Find out what your customers prefer and how it impacts your bottom line by A/B testing different delivery options.
In simple terms, checkout A/B testing, or split testing, is a way to see which version of the delivery checkout appeals most to your audience. Your website visitors see two or more versions simultaneously, helping you determine which configuration they prefer and which one benefits your business metrics the most.
A/B testing helps you understand customer behavior using data and confirms your assumptions before making big decisions. When done correctly, A/B testing improves the shopping experience for your customers, driving conversions and repeat purchases.
Many companies leverage A/B testing to refine their delivery pricing strategies and enhance sustainability. By experimenting with various delivery options and costs, businesses can identify the most effective methods for boosting revenue and promoting greener choices.
For example, a company might test different delivery fees to see how customers respond or replace default delivery options with eco-friendly methods to encourage sustainable behavior. These experiments can lead to valuable insights, such as reducing low-margin orders that hurt profit margins or increasing the adoption of greener delivery options.
The outcome of such testing often includes improved profit margins, higher customer satisfaction, and a positive impact on overall revenue.
Begin testing to find the best pricing strategy for your pharmacy delivery service.
By creating a smart, data-backed delivery plan that offers various options to meet your customers' needs every time they order, online pharmacies can grow, improve their checkout process, and boost shipping revenue.
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