CNBC has an interview with Walgreens CEO Tim Wentworth in which he says that the company “is using its stores and brand to bolster its developing health-care business.
“Walgreens has made significant investments over the past few years to expand beyond a drugstore chain into a large health-care company. Wentworth acknowledged that the company has been closing stores to make sure it has the ‘right optimized footprint,’ but challenged the notion that Walgreens has to fully pivot from its stores to pursue its health-care goals … Wentworth emphasized Walgreens’ physical and personal role in communities, calling customers’ trust in the brand a ‘leverage-able asset’ the company can use as it builds its health services business.”
Wentworth tells CNBC, “If you look at the stores and what goes on … eight million vaccines this year at the back of the store already, that’s a health-care business, right? That’s not just putting pills in bottles, that’s people touching people — 85,000 of our people touching people every day, 10 million people that walk in our store.”
KC’s View:
I think Wentworth is right, but in some ways the things he is right about also underline, to my mind, the things he is wrong about.
Sure, Walgreens touched vast amounts of people by giving out vaccines. But so did everybody who had the vaccines. It wasn’t hard. So counting on that being a foundation on which to build a health care-centric retail business strikes me as a little fanciful.
While he’s right about customers being leverage-able assets, I actually think that this precisely the wrong way to think about health care clients patients. I think the fundamental relationship between people and their healthcare providers is different from the one that exists between customers and retailers. The seeming inability of retailers like Walgreens and CVS to recognize this fact is the thing that may doom their healthcare efforts to having minimal impact.
Bottom line: There is a difference between a patient and a customer. If you don’t understand that, you have no business expanding your footprint in the healthcare sector.
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