Can retailers be healthcare disruptors?
Dan Stanek
Through a special arrangement, what follows is an excerpt of an article from WayfinD, a quarterly e-magazine filled with insights, trends and predictions from the retail and foodservice experts at WD Partners.
For minor health conditions and “everyday” healthcare, retailers are turning the tables. In-store clinics are rewriting the rules on how to deliver consumer-centered healthcare that is:
- Cheaper to build and operate;
- More accessible and convenient.
Yet, by fully integrating these services into their holistic physical and digital shopping experiences, retailers have an opportunity to become an even greater force.
For retailers, becoming a “primary care” option of choice creates an entirely different dynamic in the consumer/shopper relationship with the store and the retailer’s brand, creating completely new visit patterns, trip drivers and need states. Taking advantage of a huge and growing health opportunity, the relationship with retailers and brands has the potential to:
- Create destination or “statement” offerings in health-related categories;
- Activate categories adjacent to health services, especially conditions being actively managed (allergies, digestion problems, diabetes, etc.) in concert with clinic visits;
- Add new health services and other categories (e.g., Costco’s expansion and space dedicated to hearing aids);
- Strengthen wellness (not just treatment) offerings in store to take advantage of the massive attitudinal movement to illness prevention and toward active lifestyles;
- Tap emerging technologies to support new personalization models. Diagnostic information from apps and wearables, personal health data and even remote telehealth services (where specialists offer consultation from a remote location) offer new ways of thinking about the overall consumer experience.
Regardless, the medical industry will not sit idly by while retailers invade their turf. They’re rapidly opening facilities in smaller, more convenient locations or moving into retail spaces in strip centers and malls (some, ironically, left vacant by retail closures). They’re even creating “chain” medical brands such as One Medical and Great Expressions (dental care). An epic battle of massive industry players is on the horizon.
To me, however, this feels like a tipping point for retailers — an opportunity to provide better customer experiences in the health and wellness space at a time when our population is aging, Millennials are establishing families and all ages are expecting more. It’s a battle for a new generation of patients. Time to gear up.
DISCUSSION QUESTIONS: Is retail well positioned to offer solutions for many of healthcare’s challenges in the years ahead? What factors will work for and against retailers when it comes to gaining greater traction in providing healthcare?
Lesley EverettCEO and President, Walking TALL Training & Consulting, Inc.
Lesley EverettCEO and President, Walking TALL Training & Consulting, Inc.
Lesley EverettCEO and President, Walking TALL Training & Consulting, Inc.
Lesley EverettCEO and President, Walking TALL Training & Consulting, Inc.
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17 Comments on "Can retailers be healthcare disruptors?"
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Vice President, Strategic RelationsHamacher Resource Group
What we once thought about the delivery of and access to healthcare in America is thankfully in our rear view mirrors. For years it has been purported that “consumers were in charge of their own health.” Finally, thanks to retail clinics, wearables, a glut of information, a reshaped ecosystem and better self-care choices, this has become reality.
Retailers wishing to gain traction must recognize all aspects of health, wellness and prevention sought by consumers and provide holistically-integrated solutions. Furthermore, because every individual’s health journey is unique, their point of entry into seeking healthcare must be seamless and accessible.
Chief Amazement Officer, Shepard Presentations, LLC
Some retail businesses are good candidates for integrating healthcare into their strategy. For years there have been pharmacies in retail stores. Expanding the services seems reasonable. How far they can expand? That’s yet to be seen. Too far and the retailer could lose their identity.
President, Max Goldberg & Associates
Access to medical care is changing, with Americans being offered more locations for access to medical professionals. Some retailers may have the space, and may be willing to undertake the effort, to host a medical clinic. For others, this doesn’t make sense. Retailers need to take a hard look at the numbers and the liability before jumping into hosting a clinic.
CEO and Founder, Cahoot
Chief Executive Officer, The TSi Company
I see the retail healthcare industry growing because those who have no insurance or insurance plans with high deductibles will always look to save money. The FDA is continuing to allow more OTC drugs and devices, most recently they approved OTC hearing aids. So it’s smart for retailers to invest in building up this area. Moreover, we will see more local clinics with facilities competing which will help the customer further by keeping costs down. My only concern is that we do not sacrifice quality which will be very difficult because usually with price competition quality begins to suffer.
Managing Director, GlobalData
Let us hope that they can. Healthcare is mired in bureaucracy, old-fashioned thinking, red-tape and a model that puts the patient last in so many considerations. Retailers, for all their faults, are extremely customer-centric. Their entry into this market could be just the shot in the arm that healthcare needs!
Editor-at-large, RetailWire
I see it as less a competitive battle between established medicine and retail and more as the continuation of opening new opportunities to provide accessible care to patients, be the providers retailers or hospitals/clinics/medical groups.
Retail has been in the lead; there are now over 1,120 minute clinics in CVS stores and somewhere around 400 to 500 in Walgreens outlets. Supermarkets too are participating (Kroger, for example, operates well over 200 Little Clinics), and they certainly do have the resources to provide clinics, prescriptions and nutrition management. Urgent care facilities and operations like Great Expressions open up even more accessibility, they provide different services from retail-based healthcare offerings. I believe that there is plenty of room to grow for everybody.
CEO and President, Walking TALL Training & Consulting, Inc.
It makes perfect sense for retailers to expand into a level of healthcare. For years, pharmacists in stores have often been the trusted go-to experts for minor ailments and medications, and now blood testing units are being set up very effectively in grocery stores for convenience. There may be a sensible limit to the healthcare available in this way, however a good move for retailers I would say.
VP Marketing, PebblePost
The Minute Clinic is the perfect case study in why retailers can solve for what traditional healthcare hasn’t (or won’t). They recognized the “job to be done” for consumers who need quick diagnoses for minor health issues. Avoiding the pain of going to a doctor’s office and waiting hours for a flu shot is time well spent.
Scientific Advisor Kantar Retail; Adjunct Ehrenberg-Bass; Shopper Scientist LLC
Principal, Your Retail Authority, LLC
This is not just about existing retailers jumping into this space but also clinics popping up that look like retailers. I won’t bore you with my ailments but needless to say, I have to have my blood panels done every month. Currently I have to make an appointment with my doctor, go in and wait and then have my blood work done and sent out for a ridiculous amount. And you ask what’s wrong with our healthcare? Its not so much about how many payers there are as it is about the way things work and all at the expense of the patient. Wouldn’t it be nice to hop into a local, convenient “store” to get this done? And to be able to pick up items that you might need related to your condition(s)? This is a great place for retailers to start looking at new services and opportunities. For my 2 cents.
Co-founder, CART
The massive food and healthcare industries touch every individual, yet are largely disconnected. The opportunity to bring together nutrition and health at a deeper level yields major benefits for the entirety of the value chain. Customers are generally ready and open for this kind of service — it’s just a matter of retailers being more willing to step into the space as well as technology service providers that enable them to unlock that value.
Professor of Food Marketing, Haub School of Business, Saint Joseph's University
I see a terrific opportunity for food retailers to position themselves as the “health & wellness” providers. Unfortunately, they allowed the chain drug stores to own this positioning. With renewed interest in convenient healthcare, food retailers may now have the opportunity as well as they have permission to become major players in this space. How? By delivering on the healthful aspects of food and diet to one’s health & lifestyle.
Offering dietary advice, wellness screenings, healthy cooking classes, incentives for exercise, etc. would allow them to make inroads here without a lot of CAPEX spending.
President, Second To None
Retail pharmacy brands were the first to recognize broader healthcare services as a competitive differentiator, as evidenced by the success of CVS Minute Clinics. We see grocery retail as well positioned to capture much more healthcare-related market share, though most don’t yet recognize the opportunity at hand.
One super-regional grocery chain with a clear focus on healthcare services is Des Moines, IA-based Hy-Vee. The employee-owned company offers a comprehensive slate of wellness services for customers, families and businesses to tap into, including dietitians, on-site flu clinics, diabetes education programs, pharmacist-led smoking cessation, and several other services.
Hy-Vee recently announced plans to operate orange theory fitness centers as part of their healthy living/healthy communities initiatives. These types of creative moves make them distinct in customers’ minds. In order for retailers to gain more traction around healthcare services, they need to be thinking holistically, with a commitment to customer convenience.
Retail Solutions Executive, Teradata
YES THEY CAN. Three areas of impact:
1. They know consumer behavior better than healthcare in general. Traditional Healthcare still talks in terms of the Patient Journey. But some are moving upstream to realize there is still a decision path to making decisions on what providers/payers to work with. Retail already gets that perspective.
2. Retailers can be more nimble and flexible in their delivery of basic healthcare services that large-scale healthcare organizations will struggle to provide. And really, should a large organization be straddled with flu shots and colds? If we can tie the patient records together so that they travel more cohesively with the customer/patients, then we will have this seamless system that allows retail to disrupt the traditional delivery methods.
3. The proximity of the physical store in your neighborhood for retail for simple health care needs, coupled with pharmacy and OTC products, in one place.
Global Retail & CPG Sales Strategist, IBM
Location pervasiveness, alone is a great driver for retailers to dive into these services. This is also another way for retailers to be thought of more by consumers as services providers, rather than simply “product sellers.” Another great way to differentiate.
Senior Technology Advisor, Softtek
Grocery retailers are definitely the best positioned to increase the customer experience by extending the current customer shopping journey offering additional services within their in-store clinics and pharmacies. However, the solutions they could provide need to be designed in terms of how the customer would value such enhanced experience and not result in adding complexity to the customer experience. Other retailers like active apparel might consider adding some healthcare services that could complement the healthcare journey.