PetSmart acquired Pet360 for $130 million in cash and up to $30 million more in future performance-based payments.
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Order online/pick up in store
Most pharmacy chains, however, are using their web sites to help customers manage prescriptions, offering the ability to order prescriptions online and pick them up at local stores, akin to the order online/pick up in store trend in big box electronics and appliances. Since 1999, Drugstore.com has partnered with Rite Aid Corp. to enable consumers to pick up prescriptions at stores.
“When this market opened up in 1999, we heard a lot of talk about changing the pharmacy landscape. But sites like PlanetRx didn’t succeed,” Forrester’s Boehm says. “It’s just not that difficult to go to a bricks-and-mortar pharmacy, so we haven’t seen a massive revolution. What we have seen is a change in what people are doing. Where they might have called in a refill before, they now do that online.”
Other health care subcategories are served by e-retailers that have a narrower focus. MotherNature.com, for instance, offers natural and organic vitamins, supplements and self-care products, and its customers are mainly women over 40, says R. Whitney Anderson, CEO of Mother Nature Inc. Mother Nature, a public firm in the late 1990s, is a private company backed by venture capital from Quadrant Capital Advisors Inc.
MotherNature.com has maintained annual growth of about 100% over the last three years by improving its web site and the products it offers, purchasing two other online vitamin companies, and capitalizing on the fact that more people are recognizing the convenience of the Internet and the privacy-a key factor in health care retailing online-it offers, Anderson says. “There is a decent migration of offline purchasers to online purchasers, and that is especially true for the vitamin/supplement and personal care areas,” he says.
The e-retailer learned that for newcomers, making it easy to purchase a product and return it is important, Anderson says. “When a person researches a consumer electronics product online, he knows exactly what it’s going to do for him. It’s a little bit different in this segment,” he says. “We have put policies in place so people can try an herbal supplement and return it if they don’t like it.”
The need to enhance ease-of-use and presentation of policies drove TheMedicalSupplyDepot.com to redesign its web site in September, mere months after it launched, says Meir Tsinman, president. Individuals purchasing health care products online often are elderly and may be making a significant investment in something such as a wheelchair or walker, he says. “We had to make the site easier to navigate, and customers wanted clearer images and clearer policies.”
The e-retailer also embedded technology from LivePerson Inc. into the site so people could ask important medical-oriented questions with a click of a button. While many customers still prefer to use the telephone to discuss the details of how products work, for example, use of the online chat tool is growing, Tsinman says.
TheMedicalSupplyDepot.com expects the aging population to fuel the need for medical supplies over time and is counting on people looking for medical content online translating into retail sales. “When consumers are looking for medical information online, they might say, ‘Hey, I should check my blood sugar,’ and buy a product to do that,” Tsinman says.
The vast amount of health care information online, however, often confuses people and may make it difficult to find the right products, suggests Michael I. Brown, president and CEO of HealthPricer Interactive Ltd., which operates HealthPricer.com, a comparison shopping site for health care products.
The company’s goal is to make purchasing health care products online simpler. Working with inventory data from 70 merchants, HealthPricer.com offers product searches in five categories: prescription drugs, contact lenses, supplements, over-the-counter medical products, and beauty and hygiene. Consumers can compare more than 163,000 products in the Medicine Cabinet section, for instance, and view HealthPricer.com’s review and rating of each merchant.
Looking for a remedy
“Most people search health care because they have an issue, and the remedy to that issue often is a medical procedure, a pharmaceutical or an over-the-counter health care product,” Brown says. “If someone is researching their health concern online, they also can research related pharmaceuticals and products. If we make it easy for them, they will buy them online.”
Some companies combine health care content with product sales. AOL co-founder Steve Case’s startup, Revolution Health Group LLC, launched RevolutionHealth.com earlier this year. The site offers more than 125 free tools and services for health care consumers and is paired with an online store operated by Drugstore.com-RevolutionHealthStore.com.
MotherNature.com, however, has found getting people to move from browsers to buyers isn’t a small feat. “We have about 1.5 million people coming to our site to research health concerns in our large natural health library,” Anderson says. “But in general, the conversion of people from researchers into buyers is a tall order. We make some efforts to get them to sign up for e-newsletters and convert them into purchasers, but we really view it as a free resource for browsers and early-stage potential customers. We let them come and research and we hope they will remember when they are ready to buy that MotherNature.com was helpful.”
MargaretAnn Cross is an Ann Arbor, Mich.-based freelance journalist who specializes in business, technology and health care.