The great online drugstore wars are underway, but not without glitches.
Drugstore.com, which launched last month, and PlanetRx, which opened for
business last week, both report better-than-expected traffic. They concede,
however, that they have not been able to fill all their users' orders as
efficiently as expected.
Drugstore.com, for example, has run out of some items, although only a tiny
percentage of the total. PlanetRx concedes that it couldn't fulfill some of
its orders within a day, as promised.
"Our objective is to have 100 percent inventory availability, but we're not
quite there," said Peter Neupert, chief executive of Drugstore.com.
A company spokeswoman estimated that less than one percent, or "a couple
hundred at most," of its over-the-counter items--not pharmacy items--were
on back order. She said it typically included uncommon items as fenugreek
seed and Scandishake powder.
Added Jay O'Connor, vice president of marketing and production at PlanetRx:
"We have a system where we have a very rapid response time on items. . . .
We've had only a minor, minor percentage of orders that get delayed at all."
Timely delivery is crucial for the online drugstores as they compete
against their brick-and-mortar counterparts.
Both companies are privately held and neither would disclose specific
traffic or sales. Neupert said the cross-promotion deal with Amazon.com,
which sends users to Drugstore.com's Web site, was "working very well."
Amazon owns a majority stake in the online drugstore.
"I'm surprised at the early acceptance for prescriptions on the Web,"
Neupert said. "I thought it would take longer for people to get to know us."
Said O'Connor: "We're seeing lots of volume coming in directly from those
distribution arrangements with [Yahoo, America Online, and Women.com]."
The third player in the online drugstore wars, Soma.com, appears to have
been helped by the press surrounding the launch of its more prominent
competitors. Spokesman Mitchell Reed said the company's site traffic quadrupled on the day that
drugstore.com launched. He added that hits on the company's site have
"We know that the given percentage of orders to hits is a single digit
number," Reed said. That ratio is "slightly ahead of where we expected it