CVS targets Amazon with nationwide free delivery program

CVSFOXBusiness

UPS CEO on Amazon and 24 hour shipping

UPS CEO, David P. Abney, on how Amazon has changed UPS.

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.

Continue Reading Below

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.

MORE FROM FOXBUSINESS.COM...

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.

TickerSecurityLastChange%Chg
CVSCVS HEALTH CORPORATION61.56+0.17+0.28%

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.

CLICK HERE TO GET THE FOX BUSINESS APP

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.