Consumers’ growing preference for omnichannel services has put a lot of pressure on brick-and-mortar retailers to adjust to the times or risk losing business, a message that CVS has clearly received as it looks to move beyond its corner drugstore image.
CVS Health announced that it will close 900 stores over the next three years, equaling roughly 9% of the company’s US footprint. The closures are part of a broader strategy overhaul to focus more attention on digital growth while reimaging its stores as healthcare destinations.
The foundation of CVS’ future retail strategy involves three new store formats:
- Sites dedicated to offering primary care services
- HealthHUBs designed for everyday health and wellness needs
- Traditional CVS Pharmacies with prescription services and personal care products
The move into primary care is particularly interesting. CVS’ current Minute Clinics use RNs for services such as physicals or flu shots, while generating referrals for nearby primary care providers. Although it’s unclear whether CVS will staff physicians in its new formats, the move suggests it is attempting to keep these patients in its ecosystem.
Other synergies are possible with CVS’ payor arm Aetna, which already provides plans nudging members to visit MinuteClinics by charging lower copays. The local density of people with Aetna coverage will factor into the decision of which stores to close, and CVS hopes to capture the downstream benefits resulting from preventative screenings.
At a time when digitally-native competitors like Amazon are flooding into the healthcare space, CVS is aiming to leverage its biggest advantage over these new entrants: its physical presence.
If CVS can successfully transition its stores into healthcare destinations, its scale would allow it to serve thousands of patients per day, expanding access to primary care while driving in-store volume of wellness products and long-term gains for Aetna members.