Costco and Instacart Test Free One-Hour Prescription Delivery
Costco is teaming up with delivery startup Instacart to test free delivery of prescription drugs to its members. The pilot program is limited to California and Washington state, according to two people familiar, and includes delivery to a Costco member’s home or office. One Costco member who has used the service told CNBC that he received a text earlier this month to offer him the medication delivery option as an alternative to picking up the meds in-store. The program could help Costco compete with Amazon.com and Walmart, both of which have dabbled in prescription delivery. The move also poses a threat to large pharmacies like CVS and Walgreens.
Total Retail's Take: Competition in the pharmacy category is heating up, as players such as Costco try carve out market share in what's valued as a $300 billion industry. That market size figures to rise as the aging of the U.S. population continues, becoming an issue that brands and retailers will have to confront. Irrespective of the product, fast delivery is a common demand for today's consumers. Retailers are being forced to re-evaluate the speed at which their supply chains can operate to keep pace with the Amazons of the world. That often means being willing to make technology investments, and as such accept the capital expenditure associated with such decisions.