Walmart/Humana: 21st century retailing grounded in 18th century economics
WHAT IT MEANS AND WHY IT’S IMPORTANT — "It is not from the benevolence of the patient, the pharmacist or the payer that we expect our better health, but from their regard to their own self interest." While the somewhat-modified quote is ascribable to Adam Smith, an 18th-century economist credited with the invisible hand theory, the principle holds true: Solutions developed as a part of commerce are both more efficient and more sustainable because they benefit all involved. The patient gets cheaper goods and an incentive to shop healthy; Walmart gets a loyal base of patients/shoppers with the opportunity to sell more goods to them; and Humana gets a healthier group of covered patients that, if this deal delivers a tangible lowered healthcare cost, could cement a place for retail pharmacy as a core pillar in any healthcare offering.
(THE NEWS: Walmart forges new pathway to wellness, challenges others to follow. For the full story, click here.)
This may be a groundbreaking deal between a national retailer and a national healthcare company in both its scope and reach, but retail pharmacy market solutions driving patients toward better healthcare solutions already are out there. And you don’t have to look too hard to find them. Immunizations and the evolution of the retail clinic model are ready examples. And loyalty cards across the three largest retail pharmacies could be another prime example.
In fact, if the Walmart/Humana deal looks promising, it’s those loyalty card programs across CVS, Rite Aid and Walgreens that will be drawing plenty of looks from other insurers, if they haven’t already. With CVS and Rite Aid you have established programs that collectively engage 95 million active cardholders. You have 15 years of consumer data with CVS’ ExtraCare card and two years of data with Rite Aid’s Wellness Plus. And while Walgreens is relatively new to the loyalty card scene, its Balance Rewards loyalty program launched just last week, the company has been piloting loyalty programs over the past several years.
And while these retail pharmacies aren’t in the supermarket business — technically speaking, Walgreens is certainly making the case for fresh food and better food offerings across its Well Experience and food oasis stores — they are in the healthcare business and may be better able to drive those tangible outcomes through improved compliance/adherence to drug regimens and established disease-state management programs. Walgreens and Rite Aid are already fielding healthcare advocates in the aisles to help patients access the healthcare information they need on the spot, either through their tablets or by pulling the pharmacist into the conversation. For that matter, so is regional operator Pharmaca, which also fields a loyalty card program, by the way.
You might even call it "The Retailization of Health Care." We did, in fact, call it just that. It’s the cover story for DSN‘s Aug. 27 issue, penned by Jim Frederick, and it’s a good read with pull-outs on how healthcare retailer MaxWellness is actively partnering with hospitals or how Sam’s Club is driving patient value through its optical care business. Frederick outlines several not-so-invisible market forces that are driving healthcare insurers in search of those more efficient, more sustainable solutions.
It’s the future of pharmacy retailing as we see it. Do you agree?
Study: Few sites for smaller big-box footprints in urban Chicago
CHICAGO — A real estate report released Wednesday by Mid-America Real Estate’s Urban Team found that much of Chicago lacks the type of product that today’s downsized big-box retailers are looking for.
"Retailers’ footprints are shrinking," said Mid-America principal Dan Tausk, author of the report. "From Walmart to Best Buy to Office Depot, we continue to see a national trend toward shrinking square footage, which is expanding the vernacular from ‘super’ or ‘mega’ stores to include ‘market,’ ‘express’ and ‘neighborhood’ stores. If that trend continues — and I expect it to — then we’ve got a real lack of product to offer them in most of urban Chicago."
The "Urban Chicago Mid-Box Retail Study" examined existing and vacant space for stores between 15,000 sq. ft. and 50,000 sq. ft., excluding proposed new development that hadn’t been delivered. It uncovered nearly 11.2 million sq. ft. of existing supply in the mid-box category, or 389 total spaces. It also discovered a vacancy rate in this size category at 7%, with strong absorption of existing vacancy.
"There’s demand for mid-box growth in urban Chicago, despite a tough economy," Tausk said, adding that there are a few considerations retailers will be forced to evaluate in the process. They are:
Retailers with expansion/rollouts for Chicago will need to continue to think creatively, finding opportunities in multilevels, mezzanines or even smaller stores to meet future demand;
Retailers can expect rents to remain high in the mid-size sector due to obvious lack of supply and low vacancy;
Future opportunity in this mid-box size category may best come from downsizing/sublease space or the splitting of outdated larger footprints and future bankruptcies of other retailers; and
Absorption in this size range is strong and happens quickly with greater than a 500,000 sq. ft. of leasing currently proposed in existing space.
Hiring survey indicates best holiday job market in five years
RICHMOND, Va. — An annual seasonal hiring survey released Thursday by Snagajob indicated that more holiday jobs will be available this year than have been expected in any previous season in the study’s five-year history.
The survey of more than 1,000 hourly hiring managers with responsibility for seasonal hiring, conducted by IPSOS Public Affairs for Snagajob, included the following highlights:
Among hiring managers with responsibility to hire year-end, seasonal workers for the holiday period, 63% will make hires this year, the highest percentage in the Snagajob five-year survey and up 12 percentage points from last year (51%);
Significantly more workers will be hired, as hiring managers said they expect to hire 6.1 seasonal workers, on average — a nearly 50% increase over last year and almost 100% over the survey’s low point in 2009; and
When comparing the hiring managers who expect their fourth-quarter sales to be better than last year with those who expect sales to be worse, the survey showed a net score of +20, indicating an expected sales increase. Last year, positive sales were expected, but only by a +7 margin.
"For the past few seasons, we’ve had to talk about ‘incremental improvements’ being expected in holiday hiring," Snagajob VP marketing Jason Hamilton, said. "But this year, there are strong indications that there should be substantial movement in getting us back to the kinds of holiday hiring levels we were accustomed to prior to the recession."
According to Hamilton, the survey showed that 24% more hiring managers are hiring this season, and hiring managers, on average, are planning to hire about 50% more people.
"Those indicators taken together point to a vastly improved seasonal job market," Hamilton said.
Among those who will be hiring, 57% said they expect to complete their hiring by the end of October — if not sooner — compared with 46% last year. Nearly half (49%) of seasonal workers are expected to be full-time hires, the highest level recorded in the five-year survey. Added to that, hiring managers who will be making hires expect that 50% of their seasonal hires will be able to stay on after the holidays and take a permanent job.