Analyzing the Digital Customer Repeat Purchase Behavior for a Pharmacy

A US pharmacy chain adapted retail strategy for digital capabilities. Factspan analyzed linked digital accounts, increasing prescriptions and customer retention.
Analyzing the Digital Customer Repeat Purchase Behavior for a Pharmacy
Executive Summary

One of the largest pharmacy chains in the United States had to adapt its retail strategy due to the global pandemic and prioritize digital capabilities in response to evolving customer expectations. The client wanted to analyze customer prescription refill behavior when linking their digital account to their pharmacy account. The Factspan team worked on answering two key questions:

  • Was there an increase in pharmacy refills when the digital account was linked to the pharmacy account?
  • If so, what was the extent of the increase across different age groups?

To answer these questions, the Factspan team divided the customer base into different age groups and conducted various statistical analyses to compare refill behavior between digitally linked and guest account customer groups over the study period. The analysis showed that customers with linked digital accounts filled more prescriptions per month on average than those with guest accounts across all age groups. These findings were used to augment the digital pharmacy department’s budget, which could be utilized for marketing campaigns to promote digital pharmacy services.

About the Client

The client is a major pharmacy chain in the United States, with over 2K stores in more than 17 states. The company specializes in retail pharmacy services, offering prescription and over-the-counter medications, health and wellness products, and personal care items. Additionally, the company runs retail clinics at select locations, providing basic healthcare services like flu shots and health screenings. To provide personalized healthcare service, the company had made significant investments in its digital capabilities, including its mobile app and online pharmacy services.

Business Challenge

The global pandemic caused the client company to alter its strategy and prioritize digital capabilities in response to evolving customer expectations. Currently, customers can create online pharmacy account to refill their prescription. There are two types of online accounts for their customers: guest accounts and linked digital accounts.

Guest accounts offer limited features while linked digital accounts, obtained by signing up for a wellness+ rewards account, allow customers to earn rewards points, access discounts, and save their billing and shipping information.

In line with this new strategy, the company’s objective was to determine the benefits of linking digital pharmacy accounts and use this information to advocate for increased digital linked account adoption among the company’s customers.

Our Solution

Using statistical analysis, Factspan team compared the script refills (“script refills” refers to the number of times a patient has obtained a refill of their medication) to evaluate the advantages of digital account linking. They also accounted for any biases, such as seasonality.

Factspan team extracted customer prescription data from January to December filtered for active scripts, ages 18-80. They calculated the average number of scripts per customer per month for each age group and account type before and after a designated month. The data was segmented into two groups: one group had approximately 3K customers who created a linked digital pharmacy account, while the second had approximately 2K customers who signed up with a guest account but filled at least one script in the same month. The “script lift” per month was calculated by comparing the pre- and post-“script/month” for both groups.

Z-Score Analysis: Z-score helps in identifying a trending topic in the recent past that has been subjected to the statistical correction of unknown factors.

The analysis revealed the following key findings:

  • Customers aged 45-60 filled the greatest number of prescriptions, followed by those aged 61-80 and 18- 44.
  • Customers with digital linked accounts filled more prescriptions on average per month than those with guest accounts across all age groups.
  • The creation of a digital linked pharmacy account led to a significant increase in the number of prescriptions filled per customer per month.
Business Impact
  • The outcome from the analysis will lead to programs that increased digital linked pharmacy account adoption for the client company by 15-20%
  • Will boost customer retention by 20%, resulting in elevated customer satisfaction and increased revenue.
  • The analysis findings were utilized to augment the digital pharmacy department’s budget, which could be utilized to promote digital pharmacy services via marketing campaigns.
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