The pharmacy space is a $312.6 billion market in the U.S. Between 2014 and 2019, pharmacies will have grown by almost 3% overall. These stores are critical not just for dispensing necessary drugs and pharmaceuticals but also for supplying a wide variety of basic household goods. The pharmacy is now, by and large, the ultimate convenience store.
While the space is growing, it’s not without its challenges. Why bother going to a physical drug store location when you can get both basic necessities and life-altering pharmaceuticals delivered right to your front door?
To stay competitive, many pharmacies are increasingly leveraging automation and mobile app technology to provide a more engaging and personal experience for their customers. What kind of a difference do these apps make? And who specifically is using them?
To find out, we gathered insights from InMobi Pulse, which builds a holistic understanding of consumers across data sources ranging from the InMobi ad exchange, which reaches 1.6 billion users globally, to opt-in sourced deterministic first-party carrier telco data to stated feedback directly from the customers.
And if you wanted to go deeper on the data we use:
We focused on the biggest names in the pharmacy space in the U.S. today (Walgreens, CVS and Rite-Aid), along with major grocery store chains that offer pharmacy services (Walmart, Costco, Kroger and Albertson’s). We also looked at Amazon Go, which has disrupted the convenience store space with its app-first approach and looks to enter the drug store market in the near future.
So what does our data reveal? Here are three important things to know:
Who are these app owners? How they differ from the brands’ mobile web visitors? Here’s what our data reveals:
What makes someone become an app owner? Why do people bother getting a pharmacy brand’s app on their phone in the first place? Here’s what our survey data reveals:
The entrance of Amazon into this market likely represents a major sea change. The app-first approach of Amazon Go may cause others in the pharmacy space to increase investments in their own app strategies.
What about those without the apps? The top reason for not owning any of the apps is due to a preference for buying things physically. This reason is followed by “I don’t trust having that information on my phone.”
It is critical to note that observed behaviors differ dramatically between standalone pharmacies and those connected to a larger grocery/brand. Standalone pharmacy brands have higher levels of awareness, engagement and app ownership compared to grocery-first brands.
There is a similar frequency of purchase for most of the brands in the category, with the majority of the purchases from these brands happening monthly - potentially due to prescription refills. And, across the category, more often than not someone goes to a particular location because it’s close to where they live. As a result, it can be difficult for one brand to differentiate itself from the others.
Let’s say you’re a marketer or advertiser at a major pharmacy, convenience store or grocery brand. How can these insights be made actionable? What can they do to boost business and app usage? Here are our top tips to consider.
For one, awareness varies dramatically among the different brands. For some of the brands included in the survey, awareness nationwide is 30% or below — potentially as a result of the regional nature of some of the brands included. For these companies, it may be crucial to focus on the top of the marketing funnel and help build awareness of their app and of their pharmacy offerings more broadly. Outside of Amazon Go (where an app is required to use the store), the brands with the highest levels of awareness are also the ones with the highest levels of app ownership.
Since consumers say they visit a particular brand because it’s close to where they live, ads that feature custom maps which highlight where the nearest brand location is to the target consumer/ad viewer are likely to be especially powerful. These kinds of features can be ideal for driving footfall.
Rewards, special offers and discounts can be especially good to highlight in advertising, especially performance-focused campaigns. For more brands, around a quarter or more of customers say they go to a particular brand’s locations because of their rewards programs, and it’s a top reason why app owners say they have a particular pharmacy app on their mobile devices.
Users who’ve downloaded a brand’s app on their device are more loyal than those without. User’s with a brands app on their device spend more time engaging with the brand on their phone, visit the brand’s locations more frequently and state that they visit more often than those without.
This makes sense; after all, if someone is willing to take the time to download an app, then they’re likely predisposed to being a loyal customer. They’re also more likely to then use that app and make repeat visits. What this data shows is that brands should invest time and effort into their mobile apps, including in app user acquisition.
But, these performance-centric ads should be sure to address potential app ownership concerns. It can be good to highlight how the app can improve the in-store shopping experience, and how the app values privacy and ensures trust.
App performance marketing should be a greater concern across this space though. App ownership in the category is low, with only around 10% of respondents owning these apps on their mobile devices.
Clearly this study starts to open up important questions on how apps service your most valuable customers and what role they have in creating or increasing brand loyalty and driving lift in sales. It also starts to indicate benchmarks on what you should expect from your app investments.
From an attitudinal perspective, app owners are more trusting of the brand and willing to engage in mobile ordering, whereas those without the app are less trusting and seem to prefer more anonymous engagements with the brand. If a brand is more important to you, it seems that you are more likely to use their mobile app rather than just their website.
No matter the type of convenience store or pharmacy brand, having an app is critical for developing and encouraging a more loyal audience.
Interested in learning even more about the modern pharmacy consumer? Reach out today to get additional insights from InMobi Pulse.
InMobi takes user privacy extremely seriously. We meet the most rigorous governance, compliance, and security standards. We have collaborated with consumer advocacy groups and incorporate guidelines from multiple federal government agencies to define industry-leading practices for data governance in the U.S.
Users retain complete control over the data they provide, have a choice in whether they participate and have transparency as to how their data is utilized. Subscribers have constant access to their privacy elections through multiple telco touchpoints. The patented anonymization platform ensures data sets are 100% secure, and are refreshed to ensure all data are anonymized.
Register to our blog updates newsletter to receive the latest content in your inbox.