If you remember when doctors made house calls, you may well be surprised to see what’s happening in the health care business these days: it is increasingly the latest battlefield for the country’s biggest retailers.
From Walmart and Amazon to even Dollar General, large national retailing companies are stepping up their activities in health care, both in person and online. These initiatives include expanded departments, free-standing stores, medical services and just about every other function that you used to have to go a doctor’s office, clinic or emergency room to access previously. As such they are increasingly edging into the space now held by the big drug store chains like Walgreen, CVS and Rite-Aid who are also expanding their health services offerings...not to mention the legacy health care business like clinics, doctors’ offices and hospitals themselves. As a $3.6 trillion business it would seem there’s lots of business to go around.
Perhaps there was no more proof of how retailers view the health care segment as a tremendous growth opportunity than the news last week that Dollar General had hired its first-ever chief medical officer who will be in charge expanding the retailer’s product and service offerings to its more than 17,400 stores. CEO Todd Vasos said “our goal is to build and enhance affordable healthcare offerings for our customers, especially in the rural communities we serve.”
Given Dollar General’s reputation as a bastion of salty snacks, processed foods and all kinds of things that generally are considered on the other side of the health range, this represents a major step to reposition itself versus drug chains and big discounters. The retailer is also rolling out fresh produce and meat to a small percentage of its stores but says it might expand that program to as many as 10,000 of its locations.
Clearly the stakes keep getting raised in health care retailing. Last month both Walmart and Amazon added prescription drugs to their membership perks programs. Both retailers offer deeply discounted pricing on medications in-store and online, creating one more area of competition between the two giants.
Walmart has been especially aggressive in health care since launching Walmart Health, an in-store clinic in a rural Georgia store in 2019 and expanding the program to 15 locations at the end of last year, with seven more planned for 2021. These stores offer check-ups, X-rays and even dental and are in addition to its pharmacy business where it is already the third largest in the country. Walmart even recently began testing a chiropractic clinic at ten locations in a partnership with The Back Space.
Noted NYU professor and digital media darling Scott Galloway recently wrote, “Walmart has the scale and incentive to make an impact (in health care). Rural Americans are closer on average to a Walmart than to a hospital and as the largest private employer in the world, Walmart’s health care costs are its biggest expense after wages.”
Galloway says as Walmart and Amazon battle it out for retail dominance, “there are trillions of dollars in opportunity here. Amazon and Walmart are…fighting the largest proxy world in the business world: health care.”
For Amazon, its Amazon Care program seems to be its lead vehicle in the health care sector. Originally launched as a program for its own employees 18 months ago it is now being expanded to the general public, replicating a strategy the company has used in other initiatives. The program has two components: a virtual online service with real time communication with health professionals through an app and an in-person service that can dispatch doctors and caregivers to homes as well as deliver prescriptions. The online portion is the one being rolled out nationally this summer while the in-person component is still being tested in selected marketplaces.
Not that other retailers are sitting still watching these giants slug it out. Target is also ramping up its health care services while CVS and Walgreen continue to roll out in-store clinics. CVS now has 1500 units in place following its acquisition of health insurance provider Aetna two years ago and its rebranding as CVS Health. Walgreen expects to have 500 clinics in place in the next five years as it plays catch up. And one can expect other drug and dollar chains to see what’s happening and want in on the action.
That all of this is playing out in the retail sector which is notorious for its poor health benefits for its workers is an irony that shouldn’t be lost on anybody. What is clear is that the competition is only going to get more intense as the post-pandemic era sees people paying more attention to their health. Robert Field, professor of health management and policy at Drexel University in a CNBC report summed it up nicely: “Health care is the next frontier at retail.”
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July 11, 2021 at 05:00PM
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Walmart, Amazon And Even Dollar General See Health Care As Next Retail Battleground - Forbes
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