The over-the-counter (OTC) pharmaceutical industry is one of just a few where e-commerce sales have not yet reached a tipping point. This is about to change: e-commerce accounted for 61% of growth in the sector from May 2016 to April 2017. Yet OTC brands’ readiness to transition investment priorities to digital channels like Amazon has lagged. Their performance is symptomatic of a failure to invest in search visibility, where they are outshined by competitors.
L2’s OTC Health Care US: Amazon Performance report analyzes search visibility by category to reveal that non-Index competitor brands such as Good Sense, Genexa, and Biofreeze and private label brands like Kirkland and Equate are more visible than drug cabinet staples.
Coincidentally, these disruptors lead product listing sponsorship on Amazon Media Services (AMS), where they beat out legacy players in almost every category. Genexa and Good Sense are leaders in the allergy category, and Biofreeze dominates in the pain category. Exacerbating the symptoms of visibility laggardship, most Index brands fail to include active ingredients in product listings titles, a key strategy that competitors employ. While allergy Index brands include active ingredients in 9% of their listing titles, non-index competitors do so in 22%, displaying much more conscious optimization for Amazon’s search engine algorithm. Index brands must invest in the wide variety of tools available on Amazon —including listing titles, product descriptions and sponsorship—to succeed in the platform.
With many signs suggesting Amazon could enter the pharmaceutical market, understandable given the large profit margins it could tap into, OTC brands will soon be faced with a digital avalanche of competition that they need to preempt with savvy investments. L2’s OTC Health Care: Site & E-Commerce Optimization report assesses site features and e-commerce handoff, while the complementary Amazon Performance report provides brands with valuable insights that can help them allocate resources and determine priorities.