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ChaseDesign Retail Report #5: Healthcare Retailization

Retail Healthcare

Healthcare is a top priority now, but even before COVID-19, retailers had been finding ways to create low-cost healthcare services and expertly connect with customers. Your next doctor’s appointment may be in a Walmart, Walgreens—or a video chat with CVS. In fact, these and other retailers are likely to account for the majority of routine healthcare needs within the next decade.

“Retail is learning healthcare faster than healthcare is learning retail,” said Ohio State University Wexner Medical Center CIO Phyllis Teater in Becker’s Hospital Review. Retailers are in a prime position to take on healthcare challenges and become market leaders, and we’re already seeing many healthcare solutions within retail.

Retail Clinics Meeting Growing Healthcare Needs

Over the past few years, retail clinics have been growing in popularity as they provide convenient, low-cost medical care. According to Zipari, more than half of millennials will visit a retail-based clinic or urgent care for non-emergencies. Retailers have been strategically repurposing space in their stores into health clinics to give shoppers a reason to come back as online shopping grows in penetration and popularity. CVS, for example, operates 1,100 MinuteClinics in their pharmacies and Target locations in 33 states. They’re now planning on opening 600 more by the end of 2021.

While most retail clinics provide basic treatment, Total Retail says that many are now starting to offer an even wider array of health and wellness services, including primary and chronic conditions care, counseling, dental, optical, hearing, and even health insurance education. To provide a broader range of healthcare services, CVS has opened their HealthHUB test store in Houston. Walmart opened their first health center in September 2019 and is now opening multiple standalone clinics that incorporate both primary care and services like X-rays, dental, counseling, and optometry. Drug Store News surveyed community pharmacists and found that 56% anticipate performing health care services in addition to dispensing medicine in the future.

Telemedicine Gaining Popularity

Even before COVID-19 had us sheltering in place and working from home, telemedicine was increasing in popularity. As soon as the coronavirus pandemic hit, telemedicine adoption drastically increased. eMarketer shows that between February and March, telemedicine usage rose from roughly 18% to 30%, and the American Telemedicine Association (ATA) projects that 50% of healthcare services in the U.S. will be conducted virtually by 2030.

Retailers like CVS that are leading the way in healthcare’s retailization are starting to provide telemedicine services in addition to in-store clinics. According to Forbes, there was a 600% surge in CVS MinuteClinic visits via telehealth last year. A survey from Drug Store News shows that 40% of pharmacists believe retail and/or pharmacy telehealth capabilities will expand in the future.

Home Prescription Delivery Expanding

In addition to people looking to retailers to handle their medical needs in new ways, they’re also looking for more convenient ways to receive their prescriptions. Forbes shows that CVS has seen a 1,000% uptick in home prescription delivery in the past year and when COVID-19 hit, they waived fees for home prescription delivery.

With the growing adoption of prescription delivery over the past few years, Amazon is also joining the healthcare market with its acquisition of PillPack, which delivers medications in convenient white packets sorted by the date and time you need to take them. Now that more people are avoiding visiting stores in person, home prescription delivery is growing even more rapidly, and people are trying it out of necessity.

COVID-19 Testing Impacting Retail

Retailers have really stepped up to help ramp up testing to stop the spread of coronavirus. By the end of May 2020, CVS enacted 1,000 COVID-19 testing sites. In addition, Kroger, Rite Aid, Walgreens, and Walmart have provided testing in stores, parking lots, and drive-through pharmacies. While this is certainly a major change, it’s altering how retail clinics will operate in the future as well, even after COVID-19 is over. Drug Store News shows that 61% of pharmacists expect a change in services that includes on-site testing for other illnesses.

Bringing Healthcare to Retail

Retailers and their healthcare partners have the chance to become more relevant, helpful advocates for consumers and shoppers while finding new avenues of growth along the way.

  • GSK, Pfizer, Johnson & Johnson, Bayer, Sanofi—all should have the growth of retail clinics in their sights. Flu season, heart health, allergy season, cough cold—the opportunities for OTCs to play a role in education and collaborative marketing with these clinics is meaningful.
  • Lysol, Clorox, and others that play in the sanitization area should be viewing this shift of healthcare to retail as an opportunity to become viewed as more than household cleaners. They are a safety net in the time of COVID-19.
  • Healthy food and beverages play a key role in overall health and well-being, so marketers in these areas should be looking to see where they can play in appropriate healthcare platforms and examine relevant category adjacencies.

 

From the right assortment to shelf, aisle, and category presentation, now’s the time to rethink your retail strategies. Our team at ChaseDesign can help. Contact Peter Cloutier at pcloutier@chasedesign.net.