Meeting changing consumer needs: The US retail pharmacy of the future

Ben H.

Hatched by Ben H.

Nov 22, 2023

3 min read


Meeting changing consumer needs: The US retail pharmacy of the future

The US retail pharmacy landscape is constantly evolving, facing various challenges such as saturated retail locations, ongoing labor shortages, inflationary pressure, and a leveling-off of generic drug penetration. In order to effectively compete in this environment, all types of retail pharmacies need to better understand and adapt to changing consumer preferences.

To gain insight into these preferences, McKinsey conducted a consumer survey of over 1,000 people in the United States. Over the past two decades, the retail pharmacy landscape has undergone significant changes, and it can be categorized into four types: retail chains, regional pharmacies (mass retail and grocers), independent pharmacies, and mail-order and online pharmacies.

Retail chains are the largest and most prevalent type of retail pharmacy, accounting for a third of stores and about a third of prescription revenues in 2021. On average, retail chains dispense approximately 138,000 prescriptions annually per store, which is about 50 percent more than grocers, the next largest prescription dispensers per retail location.

Regional pharmacies, such as mass retail and grocers, also play a significant role in the retail pharmacy landscape. While they may not have the same scale as retail chains, they still serve a large number of consumers and contribute to overall prescription revenues.

Independent pharmacies, although facing challenges in competing with larger chains, still maintain a presence in the market. These pharmacies often provide personalized services and cater to specific communities, which can be an advantage in certain situations.

Mail-order and online pharmacies, the fourth type of retail pharmacy, have a relatively low penetration for nonspecialty drugs compared to specialty drugs. However, they are gaining traction in the market. Historically, mail-order pharmacies were owned by pharmacy benefit managers (PBMs) and filled maintenance medications centrally. In recent years, direct-to-consumer online pharmacies unaffiliated with PBMs have emerged, receiving significant funding. Traditional players, like retail chains, have also expanded their offerings to include online and mail-order options.

For online pharmacies seeking to disrupt the market, it is crucial to reinforce their natural benefits of speed and convenience. They can cater to convenience seekers by providing seamless online experiences and fast delivery options. However, online pharmacies should also consider ways to bridge the potential gaps in consumer experience caused by their lower-touch approach. One possible solution is to offer video telehealth visits with remote pharmacists, creating a more personalized experience that complements the benefits of convenience in the absence of face-to-face consultations.

In conclusion, the US retail pharmacy landscape is undergoing significant changes, and it is essential for all types of pharmacies to understand and adapt to changing consumer preferences. By leveraging technology, reinforcing natural benefits, and creating personalized experiences, retail pharmacies can meet the evolving needs of consumers and remain competitive in the future.

Actionable advice:

  • 1. Embrace technology: Investing in online platforms and telehealth capabilities can help retail pharmacies cater to consumers' increasing demand for convenience and personalized experiences.
  • 2. Focus on personalized services: Independent pharmacies can differentiate themselves by providing tailored services and building strong relationships with their communities. This personal touch can attract and retain loyal customers.
  • 3. Streamline operations: To compete with larger retail chains, regional pharmacies should optimize their operations and supply chains to ensure efficient prescription dispensing and delivery processes.


  • McKinsey - "Meeting changing consumer needs: The US retail pharmacy of the future"
  • 3M - "Medical Record Retrieval"

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