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Report details just how Amazon could disrupt healthcare

BY Marianne Wilson

Amazon is entering healthcare — and healthcare may never be the same.

That’s the takeaway from a new report by global management consulting firm L.E.K Consulting, which said the online giant has the right skills and capabilities to follow through on its big healthcare-industry ambitions and will launch offerings that range from mail-order pharmacy to AI-based diagnostics. (Amazon in late January announced its entry into the healthcare field through an alliance with JP Morgan Chase and Berkshire Hathaway.)

“They (Amazon) have repeatedly shown that they have the capabilities, the patience, and the deep pockets to disrupt industry after industry,” said Rob Haslehurst, managing director at L.E.K. “Healthcare is no exception.”

Amazon already has many of the core competencies needed to compete in healthcare. These include ready access to capital, a massive distribution infrastructure, a strong technology base, a robust data analytics capability, and a deep, talented executive bench that, “like Bezos himself, is relentless, resourceful, fast, inventive and customer-obsessed,” said Haslehurst.

The report outlined five scenarios as to how Amazon is likely to enter and dominate health care.

“They’re not mutually exclusive — in fact, they represent a roadmap that Amazon can follow to move continually deeper into the healthcare industry,” said L.E.K. managing director and report co-author Joseph Johnson. “All of them illustrate Amazon’s ability to drive down prices and margins while fundamentally transforming customer behavior.”

Amazon’s possible points of entry are:

• Durable medical equipment and medical supplies. “This is a no-brainer because Amazon is already there,” said Johnson. “It currently sells a broad array of general medical supplies and durable medical equipment (DME) to consumers.”

Amazon’s core competencies in logistics and distribution, and its existing B2B e-commerce platform will allow it to easily expand into hospital and provider supply, disrupting the traditional group purchasing organization (GPO) contract model. Amazon has already obtained licenses to distribute medical supplies to providers in 43 states.

• Mail order and retail pharmacy. Amazon has secured approval as a wholesale distributor from 12 state pharmaceutical boards. Drug storage is a hurdle, and there are regulatory challenges. But Amazon can work through them. It can also build pharmacies into its recently-acquired Whole Foods stores.

The company can also take advantage of its predictive analytics and customer data capabilities to build digital health tools that track and influence patient behavior — giving it a leg up over traditional pharmacy in working with the most challenging areas of healthcare delivery.

• Pharmacy benefit manager. Amazon’s most likely move into the field will be by partnering with a large PBM such as Express Scripts or by buying a smaller player like Prime Therapeutics. Amazon would gain a pharmacy network and a claims adjudication capability, and its partner would gain access to millions of Amazon Prime members.

• Telemedicine or in-home health care. Amazon’s Echo smart speaker (with 20 million units sold to date) and Alexa, its voice-controlled personal assistant service, give it an enormous platform for new voice-activated services. Healthcare could easily be among them. Bezos has talked publicly about the role for Alexa in the future of healthcare delivery. Alexa’s first step would be to help book physician visits. But thanks to Echo Show’s video capabilities, the next move might be in-home virtual house calls.

• AI-powered diagnostics and continuous care. Amazon’s “final frontier” in healthcare could be fully automated, AI-driven, in-home healthcare and diagnostics.

“Amazon has deep AI capabilities — machine-learning already drives many of its offerings, from its customer recommendation engine to its service centers,” said Johnson. “It would be only logical to harness that capability to diagnostics. And in fact, this has already started — Alexa now delivers first-aid information and voice-driven self-care instructions in an offering introduced by the Mayo Clinic. It wouldn’t be a stretch to add first-line diagnostic information, provide medication reminders, and auto-refill prescriptions.”

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Rite Aid kicks off 24th annual Miracle Balloon fundraiser

BY Michael Johnsen

Rite Aid’s 24th annual Miracle Balloon campaign to raise money for Children’s Miracle Network Hospitals is now underway, the Camp Hill, Pa.-based retailer announced Monday. Customers can purchase a $1 paper Miracle Balloon at any Rite Aid to support their local children’s hospital through May 12. In return, customers will receive $8 in coupon offers for select products sold at Rite Aid.

“Rite Aid has been supporting Children’s Miracle Network Hospitals for nearly a quarter of a century, and with the help of our customers and supplier partners, we have raised more than $87 million for the organization,” Kermit Crawford, Rite Aid president and COO and president of The Rite Aid Foundation, said. “There’s no better way to truly live our core value of being a caring neighbor than by helping to make miracles happen for sick and injured children living in the communities we serve.”

“We continued to be humbled and amazed by our long-time partner, Rite Aid,” added John Lauck, president and CEO, Children’s Miracle Network Hospitals. “The entire Rite Aid family – associates, customers and supplier partners – have been so generous in their efforts over the years to support our network of children’s hospitals, which rely on donations and community support to deliver much needed care. We look forward to celebrating another successful campaign this year.”

Since 1983, Children’s Miracle Network Hospitals has raised more than $5 billion, most of it $1 at a time through the charity’s Miracle Balloon icon. The funds raised through Rite Aid’s Miracle Balloon campaign stay in the community it was raised in, benefitting the local CMN Hospital and helps to provide pediatric equipment, treatments, research, therapy programs and charitable care benefitting sick and injured kids.

To help raise even more money for Children’s Miracle Network Hospitals, many Rite Aid locations will sell special stuffed teddy bears created by Bears for Humanity, a Certified Organic toy and gift company based in San Francisco that specializes in stuffed toys. The bears are made of organic materials 100% certified by the Global Organic Textile Standard and are sewn and hand stuffed in the U.S. The stuffed bears are available in cream, pink and brown and retail for $14.99. For each bear sold through April 28, Bears for Humanity will donate one dollar to Children’s Miracle Network Hospitals.

 

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Boomerang Commerce looks to make e-commerce smarter

BY David Salazar

Boomerang Commerce, a Mountain View, Calif.-based machine-learning tech company’s latest tool for suppliers is aiming to make it easy to maximize e-commerce growth. The company’s CommerceIQ platform is designed to use machine learning to analyze variables in real-time to recommend and automate sales, marketing and operations actions to drive growth on e-commerce channels, the company said.

“We are on a mission to empower our brand manufacturer customers with the technology they need to deliver jaw-dropping, profitable growth,” Boomerang Commerce CEO Guru Hariharan said. “Through our investment in machine learning and data science, we aspire to be the most trusted technology partner for brands – first in the context of e-commerce and eventually for omnichannel retail.”

The company noted that currently, more than half of U.S. retail purchases are made online or influenced by e-commerce, and 67% of millennials prefer online shopping to the brick-and-mortar store. With online sales at the mercy of search ranking, paid media, inventory levels, pricing wars and customer reviews, Boomerang Commerce said companies need a solution that focus on winning strategies while using technology to automate everything else.

The CommerceIQ platform includes three applications – one for sales, one for marketing and one for operations. The sales application takes action to improve search ranking and shopper conversion, the marketing application automates ad bidding on Amazon Marketing Services and balances ad spend with retailer profitability and in-stock levels. The operations application can predict out-of-stock situations to avoid products being de-listed and can provide supply chain teams with solutions targeted at digital-first retail, the company said.

“At Campbell, we are setting the pace to meet the consumer wherever they are – online or in traditional retail locations,” Campbell Soup’s vice president of e-commerce business team Veeral Shah said. “Through Boomerang’s CommerceIQ, we can automate real-time actions rooted in consumer data and insights so a brand like Pepperidge Farm Goldfish can remain the number one cracker on Amazon.com.”

Kimberly-Clark’s Amrit Patil, vice president of customer development, said, “Making data-driven decisions through platforms such as Boomerang’s CommerceIQ helps us drive our e-commerce agenda forward.”

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