Why Amazon’s Entry into Pharmacy and Food is Good for IoT

News broke yesterday that Amazon will purchase PillPack, a delivery pharmacy that sorts medication by dose. Amazon’s entry into pharmacy with PillPack and food service with Whole Foods is a great thing for IoT companies. Amazon has used technology to reinvent online shopping, and is doing the same thing in pharmacy and supermarkets. Incumbent competitors will need to aggressively adopt IoT technologies, such as wireless sensors and digital task management systems, to transform their operations to compete with Amazon.

Disrupting Pharmacy

Amazon is a tech leader who uses technology to automate manual labor, leading to cost savings and more consistent production processes. Their entry into the highly regulated pharmacy industry will accelerate the use of IoT technologies to ensure product safety, regulatory compliance, and operational efficiency.

Disclosure: SmartSense works with the 3 largest pharmacies in the United States. These companies have set the industry standard on using wireless sensors to ensure quality control and regulatory compliance. It is the wide-spectrum of the small to medium pharmacies who have frequently waited for others to commit to IoT before they adopt technology. The impact of Amazon buying PillPack will press pharmacies who have hesitated to rapidly adopt these technologies to keep pace with the world’s most efficient organization. 

Reshaping Food Service

Compared to food service companies, pharmacies have been more aggressive in adopting IoT technologies. IoT penetration in pharmacies is over 50% in the United States, but when it comes to supermarkets who are now competing with Amazon’s Whole Foods, IoT penetration rates are less than 10%. These organizations are often comfortable with 20 year-old building control technology and have been slower to innovate. The one notable exception is Kroeger who has pursued an aggressive IoT initiative over the last few years.

With this entry, Amazon will do to supermarkets what Apple did to the technology retail shopping experience. Within the supermarket context, using wireless sensors to automate equipment monitoring presents an incredible opportunity to substantially improve employee productivity. Additionally, sensors to detect shopper presence and checkout wait times enable a much more responsive retail operation, one that increases profitability and improves shopper satisfaction. The combination of productivity enhancements with enhanced operational responsiveness is at the heart of Amazon’s recipe to reshape the retail shopper experience.

This is good news for IoT providers, because the opportunity to automate equipment monitoring for improved operational efficiency and enhanced visibility into the supply chain is the surest and fastest way for incumbent supermarkets to improve their competitive position, vis-a-vis Amazon’s coming growth in retail supermarkets.