- This week, Amazon launched its new service, Amazon Pharmacy, selling prescription and generic drugs.
- Key members will receive a bunch of privileges, including huge discounts of up to 80%.
- By selling healthcare, Amazon Prime is entering a market where consumers are aware of how sensitive their data is, which means they will have to follow a thin line to maintain public confidence.
- Visit the Business Insider homepage for more stories.
Amazon launched its new Amazon Pharmacy service on Tuesday, which means the company will sell both prescription and generic drugs to its customers in the United States through its website.
The move was not unexpected; Industry observers expect Amazon to move to drug delivery from 201
Amazon Pharmacy is the first big buzz that consumers are likely to really notice, and Prime customers will get a handful of big benefits. Amazon Prime members will receive a two-day delivery of all drugs, plus discounts of up to 80% when not using insurance. Amazon will also allow them to compare whether it would be cheaper to buy drugs using a supplement or simply relying on Amazon’s bargains.
This move is appropriate for Amazon’s MO, trying to be the place for everyday shopping and directing customers to its core program. In addition, you will need to be extremely careful not to frighten Prime customers who may be concerned about the privacy of their data.
Read more: Amazon has just notified the entire healthcare industry of its latest boost in pharmacy. Here is who can win and lose.
The analysis of the consulting company cg42 suggests that of the large companies in the field of technology, Amazon has the greatest confidence when it comes to the confidentiality of user data. Of the 1,500 people surveyed in July 2020, 42% said they trusted Amazon with their personal information. The next most trusted technology company is Google with 28%, while Facebook is in last place with 16%.
Stephen Beck, founder of cg42, told Business Insider that the launch of Amazon Prime in healthcare has the potential to tip the scales in the eyes of Prime customers who are accustomed to having access to Amazon Prime to buy basic goods at retail and to watch shows on his streaming service.
“It will be really interesting to see if this is a bridge too far,” Beck said. Overall, he expects the cost benefits to outweigh the privacy concerns of the ordinary Prime member, but Amazon will have to follow a thin line to maintain public confidence.
“But this is really the first time for Amazon that they will fall into a category where the user will stop and think before moving,” Beck said.
“By buying an Amazon Halloween costume, you’re not really worried about the consequences of the data,” he said. “[Watching] The Man in the High Castle, again, not really worried. But your asthma medications? In fact, you will think about it, “he said.
Read more: Amazon’s first-ever plan for its new pharmacy business, which includes a partnership with Pfizer and J&J, highlights the challenges and ambitions of the undercover business
To keep people comfortable when using Amazon pharmacies, the company will also have to deviate from its usual business model. Typically, Amazon uses user data for its customers to push them to other purchases, marking items they may also want to buy. If he wants to keep the trust in his pharmacy business intact, he will have to resist falling into the groove of his usual business model.
“Will the person taking high blood pressure medication be open to blood pressure monitors that appear in Amazon’s recommendations? This will feel strange,” Beck said.
Forrester analyst Arielle Trzcinski also said in a blog post that pharmacy recommendations could turn down Amazon, although they could also provide an opportunity.
“Concerns about data privacy abound, but people are increasingly open to sharing data if value is given in return. Data from pharmacies can provide recommendations for low-sodium foods or exercise equipment for hypertensives.” , writes Trzcinski.
“In the end of the day, [Amazon Pharmacy] means that consumers will have to feel comfortable with Amazon, knowing even more about them – and the “ominous factor” can be difficult to overcome, “she added.
Beck also believes that Amazon Pharmacy will open the company to greater government control over how it processes data.
“When you look at the way they can assimilate information into an individual’s life, it’s a different dynamic and one that I think will be under more scrutiny, especially because they’ve now entered the health space and you need to start thinking about HIPAA [Health Insurance Portability and Accountability] laws, “he said.
Amazon is already under serious scrutiny of exactly how it collects data in its business model, with investigations continuing in the United States and the European Union. These investigations focus more on the way Amazon uses third-party data for sellers, rather than on the ways in which Amazon assimilates data for individual users.
In a press release announcing its pharmacy service, Amazon sought to allay any fears about privacy by saying that it “securely manages customer information in accordance with HIPAA and does not share Protected Health Information outside the pharmacy for advertising or marketing purposes. without the express permission of the client. “
Time will tell whether this will be enough to reassure consumers, governments and privacy activists.