Photo: Walmart
Will prescription med discounts help Walmart+ gain ground on Amazon Prime?
Walmart is adding a new perk to its Walmart+ subscription program that promises members they’ll pay as little as $0 on select prescription medicines while receiving discounts on 85 percent of the thousands sold in the retailer’s pharmacies.
The new benefit known as “Walmart+ Rx for less” is part of Walmart’s commitment to expand the elements of its subscription plan, which currently offers unlimited free delivery from the chain’s stores; same-day delivery with in-store product pricing on more than 160,000 item; no minimum purchase for shipping; fuel discounts; and the ability to use the retailer’s Mobile Scan & Go technology shopping at the chain’s thousands of locations.
The addition also helps Walmart stay on par with Amazon.com whose Prime members currently receive free two-day deliveries and discounts on prescription meds that are sometimes offered at lower prices ($1) than when using medical insurance. Amazon Pharmacy also announced that it will now fill prescription drugs for six-month periods in addition to 30- and 90-day supplies. Reports last month also suggested that Amazon is considering opening its own pharmacies inside Whole Foods or in standalone locations.
The new Walmart+ perk continues Walmart’s tradition of trying to be the low price leader in the categories where it competes. The retailer began offering commonly prescribed medications in generic form for as low as $4 back in 2006.
“We’re providing incredible value to Walmart+ members on the prescriptions they rely on most,” said Dr. Cheryl Pegus, executive vice president, health and wellness, Walmart U.S., said in a statement. “When you consider the frequency with which many prescriptions are filled, the importance of medication adherence and the ease of multiple fulfilment options, we can make it easier for someone to manage their medical conditions.”
Walmart+ members can choose to use their insurance benefits or use the retailer’s pharmacy savings card to get the best possible price on their medications. Members can also save with e-prescriptions sent by healthcare providers to the retailer’s pharmacies.
Janey Whiteside, executive vice president and chief customer officer, Walmart U.S., said the new benefit is part of the retailer’s strategy to make its subscription plan “the ultimate life hack for our customers.” She said Walmart will continue to do so because, “We know we can use our size and scale to help simplify things for our customers in a way only we can.”
- Walmart+ Adds Savings on Prescriptions to Growing Suite of Benefits – Walmart
- How it works – Walmart
- Will ending minimum purchases turn Walmart+ into a serious Amazon Prime rival? – RetailWire
- Meds as low as $1/month – Amazon.com
- Should Amazon or rivals be more wary if it opens brick and mortar pharmacies? – RetailWire
- Will Amazon’s new online pharmacy disrupt the U.S. drugstore business? – RetailWire
- CVS subscription program goes big to outdo Amazon Prime – RetailWire
Discussion Questions
DISCUSSION QUESTIONS: How popular do you expect the pharmacy perk to be with current Walmart+ members, and will it help drive new subscriptions? How will the introduction of Walmart+ Rx for less affect the retailer’s competition with not only Amazon but all rivals in pharmacy retail?
Poll
BrainTrust
Pharmacy and health services will be the next big battle ground, and both Walmart and Amazon are aggressively pursuing it. Walmart continues to bring new health offerings to market and given the state of the healthcare system, I have no doubt that the market will respond well to it. I think Walmart’s overall approach to the health market, and the introduction of Walmart+ Rx will enhance its competitive position with Amazon and all the pharmacy competitors. But this battle has only just begun.
Walmart’s new prescription programs will absolutely help it gain ground on Amazon Prime! Amazon and Walmart have a fantastic competition going, and consumers will emerge as the winner in the end, with more choice and more flexibility and, even more importantly, more ways to make healthcare affordable.
Given the cost of prescription drugs, this new perk is likely to draw new shoppers to Walmart.
Walmart’s benefits are compelling for the demographic which uses prescription medications. It could be a huge segment, but it’s questionable how much it intersects with Amazon Prime subscription.
Walmart will gain incremental sign-ups on the strength of prescription pricing benefits, but not because of people switching over from Amazon.
Amazon Prime’s attraction boils downs to two key benefits – Prime Video and two-day shipping. Walmart is lagging significantly on both.
Good for Walmart in creating a differentiated product and not competing head-on with Amazon Prime. I can see bundling other services that only Walmart can provide to further consolidate the benefits. When the time comes, they can as easily go aggressive with video subscription through licensing if required.
There is a mind-boggling amount of money to be made in pharmaceuticals, some of which are absurdly expensive. If one company can establish itself as the go-to place for filling prescriptions, fortune will follow.
This is definitely a strategy that will benefit Walmart+ customers, but also keep Walmart competitive with Amazon.
Healthcare and pharmacy are a huge and growing market as the population continues to age. As Insurance coverages continue to be reduced and deductibles continue to increase consumers need ways to reduce costs. This is a great move by Walmart. Not only will it solidify their current customer base it will draw new customers. This will be a battle with Amazon, Walgreens, and CVS. The independent pharmacies will be crushed when these elephants fight.
I think the pharmacy perk will be extremely popular with current Walmart+ members. In theory, prescriptions will cost less and consolidating purchases to a single source addresses the convenience factor that is appealing to everyone. I do think it’s good bait to pull new members into Walmart+.
Pharmacy retailers are still so convenient and use their footprint to their advantage. They might still win for immediate need medical related purchases as it’s easier to jump into a WAG or CVS versus getting in and out of Walmart. However if Walmart continues to offer speedy delivery and can make its pharmacy easy to access (quick in and out), they will certainly pull more people away from pharmacy retail for certain purchases. A slow erosion of basket from pharmacy retailers.
Retail pharmacy has undergone a series of changes from the addition of retail locations inside big box retailers and supermarkets to a wave of consolidation. However I believe the changes being brought about by Amazon and Walmart today will have an even bigger impact because they go to the heart of the pharmacy business – prescription pricing. Walmart’s latest move is more likely to negatively impact retail pharmacies than Amazon.
We’re looking at a price war. Danger to the retailers competing on price. Training customers to become price sensitive means to risk losing customers to anyone offering lower prices. Walmart is an expert at everyday low prices. They know how to hook their customers and keep them — with everyday low prices! And Amazon and other larger retailers know how to do it, too. No doubt all these retailers know it. They just need to be prepared for the strengths, dangers and opportunities that low prices and discounts create.
This is an area where Walmart is ahead of Amazon. For Walmart to press this advantage now, before Amazon can respond, is brilliant. Also, Rx medication has a barrier to switching that doesn’t exist for other products so this can be a great lock-in strategy for Walmart. Overall, very good move.
Another brilliant, “on-the-offense” move by Walmart. Well played, indeed.
While the same-day delivery might appeal to instant-gratification generations like the Millennials, Zoomers, and the younger Gen Xers (a population of 170 million), the prescription discount will appeal to the Boomers and possibly the older Gen Xers (a combined population of more than 100 million). I also believe the offer will create stickiness.
This is not only an attractive benefit to Walmart+ shoppers but also a highly-beneficial strategic move as the emergence of Amazon continues to gain steam.
For any retailer interested in retaining their prescription business, the formula must be cost + service. Filling prescriptions is not rocket science — providing adherence programs, counseling, and value is the art.
Given the sad state of healthcare in our country — and the market opportunity it offers for those who can bring better, more cost effective care closer to consumers — retailers are stepping up their efforts in this area. WMTs latest offering will absolutely increase retention and cause non-subscribers to consider signing up.