CVS Health will now offer a nationwide subscription program that allows customers to pay an annual flat rate to get free shipping for prescription drugs and other online orders, the pharmacy chain announced on Monday, an offering that comes as Amazon continues to intensify the pressure on traditional retailers.
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The ability to order everyday products like toilet paper and shampoo online through Amazon has hit the bottom-line for brick-and-mortar players like CVS, Walgreens and others, who, alongside medicine sales, rely on those transactions to boost earnings.
CVS previously rolled out its CarePass program, which offers free, one-to-two day shipping and other perks for a discounted $48 annual fee – or $5 per month – in Boston, Philadelphia and Tampa. That initiative will now expand nationwide.
"Initial customer response has exceeded our expectations with members utilizing the program's full benefits and becoming more engaged across all of our digital offerings,” said Executive Vice President Kevin Hourican.
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Preliminary results indicate that 20 percent of those customers attracted to the CarePass program were millennials, CVS said, a key audience that is increasingly turning to e-commerce for its purchases. Members also increased their purchases by as much as 20 percent.
Amazon Prime provides a similar offering. For $119 per year – or $12.99 per month – customers get access to free, expedited shipping, along with other benefits. The program has over 100 million members, the company said earlier this year.