Walgreens is doubling down on its investment in healthcare offerings, with executives saying that the future of the pharmacy retail chain is dependent on making medical care easier for connected consumers.
One of the key strategies for growth, CEO Roz Brewer told investors and analysts during a presentation on Thursday (Oct. 14), is building “a range of consumer-centric healthcare solutions, which will form the engine for our next phase of growth.”
“Consumers are embracing retail pharmacy to manage their healthcare more than ever,” Brewer said, which is why the company is launching a new business segment, called Walgreens Health, to create a more unified healthcare offering for consumers.
“We have established a tech-enabled care model powered by a healthcare platform that is omnichannel and personalized for the consumers we serve,” the CEO said.
Since taking the helm in February, Brewer has focused on scaling Walgreens’ technology and customer assets. In recent quarters, she said, “we really began to see the flywheel effect kick in.” Curbside and drive-thru pickup helped to double eCommerce revenue, and 10 million people joined the MyWalgreens membership program between June and August, bringing the total member count to 85 million.
“We have a strong understanding of our customers, the challenges they face, and the hopes, fears, passions and problems … that influence our healthcare and lifestyle decisions,” Brewer said.
New Store Formats
The Walgreen’s announcement came as the company reported that its fourth-quarter operating income was $910 million on revenues that rose nearly 13% to exceed $34 billion. To date, Walgreens has administered more than 40 million COVID-19 vaccines and 16 million tests.
“This shows how quickly and effectively we can act when we need to,” Brewer said. “And it demonstrates how we deliver expanded healthcare services into the very heart of the community.”
Walgreens President John Standley said the company is preparing to diversify its store portfolio, moving away from “cookie-cutter stores with similar offerings” and toward the development of “multiple customer propositions,” including the expansion of its partnership with VillageMD, new small-format stores, and the creation of new health and wellbeing retail products. By the end of 2022, Walgreens plans to open 160 new VillageMD locations and 100 small-format stores.
“I believe we have some tremendous underlying momentum within this business, and the pandemic has further proven the importance of pharmacies in local communities around the world,” Brewer said.
‘Just Getting Started’
Walgreens in August launched a new credit card rewards program meant to incentivize healthy living choices, rewarding customers not only for purchases made at Walgreens and other merchants, but also for doctors’ appointments, gym memberships and prescriptions.
Maria Smith, who became vice president of financial services at Walgreens in February, told Karen Webster that as she’s learned more about health and wellness, she’s found a lot of “pain points” for consumers. “Our loyalty product is really working on how to improve that overall health and wellness piece, and this is a product that will help amplify that for our members,” Smith said.
Read more: Walgreens to Incentivize Healthy Living Choices With New Credit Card Rewards Program
The pharmacy store chain also launched Scarlet, a bank account and credit card available exclusively through Walgreens. According to PYMNTS’ Connected Economy research, 33% of consumers are highly connected when it comes to their health.
See: Walgreens Promotes Financial Health With Scarlet Card
“We’re absolutely just getting started in terms of how we can mobilize to solve big, complex problems,” Brewer said. “We definitely believe that this momentum will accelerate our path to sustainable, profitable growth moving forward.”
Meeting a Need
Electronics retailer Best Buy has also been investing more in connected healthcare capabilities. Earlier this week, it acquired U.K.-based tech firm Current Health, whose platform provides “continuous, passive monitoring of vital signs” using wearables and connected devices.
Read more: Best Buy Moves Deeper Into Connected Healthcare With Current Health Acquisition
Walmart last month also partnered with the health records platform Epic to create a portal through which Walmart Health members, healthcare professionals and other authorized stakeholders can access patients’ medical records and histories.
Over two-thirds of bridge millennials and younger patients are interested in being able to view their medical histories digitally, and 44% of older millennials are already struggling with chronic ailments, according to PYMNTS research conducted in collaboration with Rectangle Health.
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