What happens to pharmacies when the COVID-19 vaccine demand wanes?
The need for vaccination against COVID-19 has driven a huge influx of foot traffic to retail pharmacies since the shots became widely available in early 2021. COVID-19 cases are currently way down in much of the U.S. and, with less demand for vaccines and pandemic-related services, retail pharmacies are anticipating taking a hit.
CVS is expecting a big drop in both vaccinations and COVID-19 testing this year, but plans to position itself as a healthcare services destination as its next step, according to CNBC. While the chain beat analyst expectations for Q4, it did not raise its 2022 outlook.
Analyst George Hill of Deutsche Bank, in discussing the quarterly results with Marketplace, said that retail pharmacies are reinventing themselves to be thought of as part of the healthcare system rather than as convenience locations.
Amanda Starc of Northwestern’s Kellogg School of Management noted that customers have begun to see retail pharmacies in this light thanks to their role in the COVID-19 vaccine rollout. More customers, she said, are more comfortable getting vaccines in a retail pharmacy than before, when they would have opted for a doctor’s office.
CVS announced in 2021 that it would operate three distinct store formats: traditional CVS pharmacies; a second concept dedicated to providing healthcare services; and a HealthHUB format with everyday health and wellness products and services.
The chain, last year, also launched a suite of health-oriented wearables and smart devices called Symphony, meant to meet the needs of seniors aging at home.
CVS has also made moves into in-store mental health offerings. In May of 2021 the chain expanded a pilot which allows customers to get in-store, on-the-spot counseling from mental health professionals and social workers.
Despite the planned focus on healthcare-related offerings, CVS has not abandoned its convenience side. The chain has delivery relationships with Instacart, DoorDash and Shipt.
Rival Walgreens has gone even farther in offering same-day delivery for its CPG assortment. Last year it began making a selection of its household essentials, over the counter medicines and other products available through the UberEats app.
- CVS faces its next challenge: Growing sales as demand for Covid vaccines fade – CNBC
- Shift to health services shows signs of success for big pharmacy chains – Marketplace
- Walgreens inks a deal with Uber Eats to expand same-day deliveries – RetailWire
- Will CVS make a breakthrough as it expands in-store mental health services?– RetailWire
- Will seniors trust CVS to keep them safe with in-home IoT? – RetailWire
DISCUSSION QUESTIONS: What do retail pharmacies need to do to prepare for a future where COVID-19 vaccination is less of a traffic driver than it has been? Do you see any of the major retail pharmacy operators as best positioned to emerge from the pandemic as a healthcare leader?