COSTCO ENHANCES PHARMACY WEB SITE

MARK HAMSTRA

ISSAQUAH, Wash. -- Costco Wholesale here last week unveiled a revamped pharmacy Web site featuring enhanced data and additional e-commerce features.

The discount-store chain, which operates 369 locations worldwide, is seeking to make the pharmacy portion of its Web site more holistic in terms of providing complete health solutions for consumers.

"We wanted to not just give them an encyclopedia to read about a topic, but we really wanted to detail and explain how they could make lifestyle changes that help them live healthier lives," said Victor Curtis, assistant vice president/general manager, Costco pharmacies.

The new, richer databases provide information on prescription and over-the-counter medications, natural remedies and various other health-and-wellness topics, including specific illnesses and medical procedures. The databases also have been modified to encourage e-commerce.

When a visitor to the site researches a specific product or ingredient, such as vitamin C, the site will present the consumer with an image of the product as it appears on the shelf, along with a product description and price. The consumer can then add the product to their online shopping cart with a mouse-click.

He declined to reveal information about the volume of business or traffic at the site, although he did say that the pharmacy portion of Costco's Web site is profitable.

With last week's site revamp, Costco began providing health data from several new sources. The prescription and nonprescription drug monographs and images are being supplied by Gold Standard Multimedia, Tampa, Fla., and the data in the "health and wellness" section of the site are being provided by Health Ink & Vitality Communications, Morristown, N.J.

Costco replaced its "vitamins and herbs" section with a new "natural pharmacy" database from HealthNotes, Portland, Ore., which is known for its in-store kiosks that allow consumers to research health information while they shop.

Curtis said that when Costco began pursuing this project in earnest earlier this year, it tried to find a single information provider, but could not find one that was strong enough in each of the areas.

"We just went back to looking at the best of breed in each category," he said.

Although it complicated matters in terms of arranging contacts with several different vendors and making sure their data meshed with the Web site, Curtis said he believes the end product is superior.

"There were some hurdles, but we didn't compromise our goal, which was to get the best content available on our site," he said.

Schuyler Lininger, president and chief executive, HealthNotes, said he thinks consumers will increasingly use both in-store electronic media and Internet research when making shopping decisions.

"We believe that consumers in the next five years will look at stores for information, and will get it from kiosks, then will do additional research at home or at work, on the Internet," he said.

At Costco, Curtis said part of the company's plan for its pharmacy Web site is to build in-depth, disease-specific "health centers" that would give consumers guidance on how to best cope with their ailments.

An asthma center, for example, would include information about how to use an inhaler, how to use a peak-flow meter and a survey about how users can assess their asthma triggers.

"We would not be just describing what asthma is and how to receive treatment, but what those treatments are and how to use those treatments in the most effective way," said Curtis.

Costco plans to launch the in-depth health centers by early next year, starting with one on diabetes that would be offered through a partnership with Eli Lilly and Co., Indianapolis. Health centers focusing on infertility and asthma would likely follow, Curtis said.

The challenge for retailers, according to analysts, is making sure that the data they provide to their customers via the Web is up-to-date and does not conflict with the data that the pharmacists have in their stores.

"Particularly for the bricks-and-clicks players, making sure the data is in sync with what the pharmacists have is very important," said Elizabeth Boehm, analyst, Forrester Research, Cambridge, Mass.

If a customer obtains data on a retailer's Web site and is given conflicting information by someone in the store, "it could be damaging to the customer relationship," she pointed out.