How Target's in-store clinics are reinventing retail wellness
Target's new in-store wellness sections, called Connected Health, enable shoppers to track personal health information on handheld devices. In doing so, the mass merchant is reformulating health care by making it a consumable retail product — by way of smartphone.
What does this mean for the future of retail?
If you want to take the temperature of retail's future, the best place to do so may be in one of 550 Target stores.
These locations are where the $73.8 billion retailer is piloting its in-store wellness sections, called Connected Health. An evident offspring of its recent pharmacy partnership with CVS Health, these sections will include connected medical devices, such as blood pressure monitors, that can track and record participating shoppers’ wellness information via smartphone, according to the online site Twice.
Such centers may help Target track other shopper needs as well. With the dedicated Connected Health centers, Target is treading beyond offering wellness as a service, which many other retailers already do. Instead, Target is reformulating health care by making it a consumable retail product, by way of smartphone.
"We know our guests are increasingly interested in these types of products," a Target spokeswoman told Twice. "(We) will evaluate future growth plans based on their feedback and sales results."
As any good retailer knows, the purchase of one retail product sheds light on the needs for others. Done well, a retailer can turn health care into wealth shares.
Healthy connections, practically
That future is coming fast. It's been less than a year since Target announced plans to sell its 1,700 in-store pharmacy locations to CVS, a move that enables Target to focus on its core strength of merchandising while putting the task of health care into the hands of an expert, CVS.
The Connected Health sections will operate near or within those CVS-branded, in-store pharmacies and feature smartphone-connected blood-pressure monitors, scales and other medical-grade devices. The sections, being tested in 550 stores, each feature roughly 14 such products. Qardio, a maker of smartphone-connected scales and blood-pressure monitors, is anchoring the sections.
Target's reasoning behind offering connected wellness, meanwhile, may be anchored in practicality. Or, to put it another way, it could be as simple as consumers want retail-based health options, and Target can do it.
Americans tend to seek after-hours medical care more often than those of almost any other industrialized nation, according to a 2010 survey of 11 countries, cited in the New York Times. Throw in a smartphone, and all the better to see them with. And with nearly two-thirds of Americans holding smartphones in 2015, the potential market has reached critical mass.
Walmart, Walgreens also on health front
Amassing the potential of this market, meanwhile, is a goal of many retailers, though Target and CVS (as well as Walgreens) are at the forefront of making health a retail cornerstone.
In addition to its pharmacy partnership with CVS, Target in 2015 made the complementary commitment to shift its food focus toward wellness, eliminating processed products in favor of organic, locally grown and natural foods.
Among other retailers in the wellness space:
• Walmart in April joined the InComm Healthcare & Affinity's Enhanced Payment Platform, enabling members to participate in health plan-sponsored wellness programs and to receive benefits at Walmart stores.
• Also in April, Walgreens extended its partnership with St. Louis-based SSM Health Medical Group, which will own and operate 27 clinics within Walgreens stores in greater St. Louis. Walgreens also offers a loyalty program, called Balance Rewards, that encourages and rewards healthy activities.
• The Little Clinic, operated by Kroger Co., now operates 194 locations in 10 states. In March, Kroger announced it would add dietitians to some locations.
• While not a retailer, insurer John Hancock's Vitality rewards program presents an opportunity for retailers to offer wellness benefits through a partnership. Vitality rewards its members’ shopping, entertainment and travel perks for living healthy lifestyles.
The connected capabilities of these efforts vary or are yet to be seen, but the fact these retailers are leaping into the health care arena is likely as much about savings as it is customer service. A Towers Watson study noted employee wellness programs save employers an average of $100 in health care costs per worker.
Targeting a healthy future
So what might this mean for the future of retail? As the Target spokeswoman said, "(We) will evaluate future growth plans based on their feedback and sales results."
Connecting purchases to immediate health needs, especially on a voluntary basis, is among the few links retailers have yet to close when it comes to providing advisory capabilities to customers. And yet there is still much ground to cover.
There are many tools from which to gather the needed insights — wearable devices, fitness apps, wellness-based loyalty programs — but how do we connect all these databases of actual consumption habits? The pieces are all there, but is any organization stepping up to put the puzzle together, and in the process setting itself apart from the competition?
There would likely be security hurdles, as evidenced in the U.S. government's recent attempts to hack into an Apple iPhone. Even back in 2011, the British government asked supermarket chain Tesco to share data from its Clubcard loyalty program to help overhaul the nation's census. Tesco refused.
What this indicates is that the Holy Grail of wellness as a retail product is not just in monitoring, but also in laying the groundwork to connect the entire system, responsibly. Employers would like it and employees or consumers would probably like it too, if it lowered their health premiums.
What is clear to me is Target's venture is adding urgency to the need for a reliable, robust resource that connects all of these databases of habit. Connected Health may represent the next degree to getting there.
Bryan Pearson Bryan Pearson is President and CEO of LoyaltyOne Inc. and the author of the best-selling book The Loyalty Leap: Turning Customer Information into Customer Intimacy. www