Photo: Current Health
Will Best Buy’s latest acquisition be a healthy addition for the chain?
Best Buy has signed an agreement to acquire Current Health, a remote patient monitoring and telehealth technology company based in the UK.
“The future of consumer technology is directly connected to the future of healthcare,” Deborah Di Sanzo, president of Best Buy Health, said in a statement. “We have the distinct expertise in helping customers make technology work for them directly in their homes and by combining Current Health’s remote care management platform with our existing health products and services, we can create a holistic care ecosystem that shows up for someone across all of their healthcare needs.”
The deal marks a further step by the retailer into healthcare, a category of emphasis under Best Buy CEO Corrie Barry. The retailer has identified three segments within the category as growth opportunities: consumer health, active aging and virtual care. Ms. Barry pointed to current strength in the first two segments with a growing opportunity in the third on the chain’s second quarter earnings call in August.
Ms. Barry said that Best Buy had greatly increased its roster of vendors and grown its SKU count in health and wellness segments over the past year.
“These include new products important to our health strategy, specifically those focused on conditional health management that help customers track blood glucose levels, keep tabs on heart data, manage weight or even help identify allergens in foods,” said Ms. Barry.
She also added that Best Buy was “working with hospitals and care centers to curate health products for their patients on co-branded landing pages.”
Active aging, Ms. Barry said, was about emergency response services and tools that older consumers can use to continue living “independently in their homes.”
Ms. Barry announced in her very first presentation to analysts as Best Buy CEO in 2019 that the retailer had set a goal of providing five million seniors with health monitoring services in five year’s time. The retailer, in recent years, has acquired GreatCall, an emergency response system provider, Critical Signal Technologies, remote patient monitoring systems, and BioSensics, a predictive healthcare technology firm.
The virtual care opportunity has expanded significantly since the advent of the novel coronavirus pandemic, according to Ms. Barry, with more consumers seeking medical care without the need for an in-person visit.
“The amount of devices that are proliferating right now to help people manage their own care is absolutely incredible,” she said.
Discussion Questions
DISCUSSION QUESTIONS: What is your assessment of Best Buy’s healthcare strategy? How does it stack up against other retailers pursuing similar opportunities?
Poll
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The U.S. healthcare industry generates trillions in annual revenue. Given the trend of extending health services through technology, it makes perfect sense that Best Buy would be placing strategic bets in this market. I believe Best Buy has created a level of trust with consumers and so in this emerging domain of home healthcare tech, Best Buy has a consumer edge. Couple this with broad distribution and I think you have a receipt for success.
This is an outstanding acquisition and extension for Best Buy as the intersection between consumer technology and healthcare becomes increasingly evident. I believe that consumer healthcare is not about “products,” but instead services, technology, and access.
Best Buy is most definitely staking claim to this new frontier.
A lot of retailers are trying to diversify from products into services, mainly because there is significant opportunity for growth. This isn’t anything new as companies like Sears had their fingers in all sorts of pies many, many years ago. However Best Buy’s choice of digital health and wellness is very interesting as this is potentially a huge growth area over the next decade. As technology is paramount to the emerging industry, Best Buy’s skills in helping customers use devices will be valuable as they develop this side of their business.
By adding healthcare to their roster of service categories, Best Buy is continuing to leverage their greatest consumer offering — namely expertise and showrooming — and expanding the range of products they can offer their customers. Healthcare will nicely round out Best Buy’s acquisition of GreatCall phones, partnership with Bose on OTC hearing aids, partnerships with Google, Apple, and Amazon on home automation systems, and their expanded home service offerings for smart home installation. There currently is no place where shoppers can go to learn and understand what health-tech products are available and how they might work together to help customers deal with physical challenges or age in place longer.
Best Buy’s strategic move to capture a slice of the growing health and wellness market is brilliant and it will drive significant growth for them for many years. Nearly every new health-related product that comes on the market has a sensor or chip embedded in it, which expands Best Buy’s ability to offer wrap-around subscription services, underpinned by predictive and prescriptive data and analytics and a vast partner ecosystem that will continue to drive differentiation and new innovation. Importantly, Best Buy’s strategy offers higher margins than other retailers who are pursuing a more traditional approach to health and wellness (building expensive health centers, outfitting them with expensive machines and floundering through the maze of highly complicated public/private insurance reimbursement programs). If Best Buy maintains its focus on consumer products linked to a rich source of health and wellness information that delivers utility and value to consumers, it will grow this segment by double and triple digit percentages over the next 10 years.
Best Buy’s move into healthcare makes sense in many ways, but it’s also a risk. Convincing consumers to trust health info to a tech provider is no small task – if the company can pull that off the potential upside is enormous given the growth of tech-fueled healthcare.
This is a brilliant, natural move for a brand like Best Buy. Retail is no longer just stores and selling – it’s strategic partnerships and industry change-making. Best Buy gets that.
Ms. Barry is a visionary. Healthcare will become more accessible through technology, and Best Buy has been positioned shrewdly as its enabler. I can’t wait to see what Best Buy does next.
Best Buy’s push into the consumer healthcare market is smart and timely. With health trends like limited access to healthcare facilities during the pandemic, consumers’ interest in managing their own health, IoT health sensors being cheaper and more available, and the aging population, this market should grow dramatically. With Best Buy’s trusted reputation and large market reach, they are well positioned to be a driver in this consumer healthcare market. Their acquisitions will make their offerings appear more quickly. Kudos to Best Buy for building this market for their business.
COVID-19 accelerated healthcare’s pivot to the home as consumers’ health hubs. Best Buy is in the right place at the right time, right where that puck is headed. The acquisition of Current Health enables the company to further consolidate its position as a home health partner for the health system and direct-to-consumer as well, bolstering hospitals’ ability to send patients home for more acute level care via remote health monitoring. Well done, Best Buy!
Walmart’s recently announced partnership with Epic, one of the top vendors that hospitals and health systems use for data analytics support, looks to be a leading indicator that their roll-out of Walmart Super Center Health Clinics will continue in 2022 and beyond. Dollar General recently hired a chief medical officer and sees big business opportunities offering some healthcare services to their customers and they describe most of their stores as located in “health deserts.” It is not surprising to see Best Buy join the “retailer offering healthcare” party. “The retailer has identified three segments within the category as growth opportunities: consumer health, active aging and virtual care.” The virtual care opportunity does directly speak to Best Buy’s strength and perhaps differentiation: “We have the distinct expertise in helping customers make technology work for them directly in their homes.”
I can’t argue with the opportunity that healthcare presents to the retail industry. Corrie Berry is very sharp and recognizes the opportunity, and I’m looking forward to seeing how this will fit into a Best Buy retail or online experience. As other retailers (Walmart, Target, etc.) increase their healthcare offerings, does it make sense for a retailer that’s known for electronics and home appliances to move into it as well? Time will tell, and I look forward to learn from Ms. Berry as they develop in this area.