If Walmart’s reported interest in acquiring or expanding its relationship with health insurer Humana HUM +1.44% is to materialize, it would be the widest-reaching move toward transforming retail from a seller of goods to a seller of health. And that would mean the traditional retail store, across a variety of segments, would change.
Walmart joins other retailers pursuing the insurance industry, including CVS Health, which is in the midst of acquiring Aetna, and Amazon, which is partnering with JPMorgan Chase & Co. and Berkshire Hathaway to establish an independent company to provide affordable healthcare to employees.
The potential difference is while CVS and Amazon are focused specifically on providing healthcare services to consumers and employees, Walmart and Humana could focus on home health and preventing disease.
If Humana and Walmart were to expand their partnership to illness prevention, it would pressure other retailers, from Target to Kroger, to supply affordable, engaging ways to merchandise healthcare. With more consumers making their own insurance and treatment choices, it makes sense.
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Following are five ways a Walmart-Humana relationship could reshape the total in-store format.
1. Shelf changes
A key asset in a Humana partnership, for Walmart, would be extended shopper data, especially among seniors, who are an important Walmart segment. These insights into health issues and behaviors could be used to determine new category segments, to reshuffle the shelf to combine products that previously did not seem compatible and/or to extend existing categories.
Walmart may learn, for example, that shoppers who regularly buy dental soft picks also take prescriptions for diabetes, because gum disease is a common comorbidity. It can place these dental products in the sugar-free cookie aisle.
2. Exercise classes, meditation
Walmart is already pursuing several ventures to bring medical treatments into the store, and that would likely extend to prevention. In addition to its large pharmacy business, Walmart operates primary-care clinics and is exploring in-store lab-testing services. Humana, meanwhile, is closing a deal to buy Kindred Healthcare’s home health and community care businesses. A combined focus on illness prevention and reduction could encourage services such as exercise instructions, nutrition seminars and even mental health programs. Humana insurance members could be eligible for Monday meditation classes or Friday foot massages.
3. “Walhealth” locations
If the goal of Walmart, and other retailers, is to lower overall healthcare costs by providing affordable health services to all, then they’ll need to be where all shoppers live. This includes urban areas where many shoppers may not have access to a car, and rural locations where there are fewer healthcare providers nearby. Think of variations of CVS MinuteClinics, which are staffed by nurses and physician assistants who diagnose, treat and write prescriptions for illness.
With an insurer involved, however, these retail-partner locations (which could be rolling or pop-up stores) would focus more so on early detection and prevention — residents might be rewarded for making regular wellness visits for blood pressure checks, weigh-ins or good-nutrition classes.
4. Subtracted additives, added sustenance
Food is an inextricable component of health, so good nutrition would become an essential part of the in-store merchandise selection. Since Humana is focused on preventing illness, one would expect fresh, nutrient-rich foods to become more heavily emphasized. An insurer might not cause Walmart (or other retailers) to stop carrying high-sodium frozen meals and processed meats entirely, but it could encourage allocation of less shelf space to these foods, while more is dedicated to fresh produce, lean meats and sell-by-bulk grains. That Target put big-brand processed food makers such as Kellogg and General Mills on notice three years ago supports the likelihood this trend is holding.
5. Special thresholds
It seems small, but a separate entrance for healthcare customers could sharply change the path of the shopping trip and result in unexpected purchases. It’s also practical — a good number of customers who pop in for prescriptions or to get the results of lab work aren’t in the shopping mindset, or simply don’t have the time. However, the retailer could make access to these services easy while also displaying convenience items that might surprise and appeal to the shopper at that moment, such as single-serve salads, calcium supplements and cooking utensils, which may resonate with shoppers who have healthier living on their minds.
All of these changes would of course need to generate enough sales, meaning shopper interest, to make the investments worthwhile. So in addition to changed formats, a generation of healthcare-merchandising retailers would have to provide intriguing, energizing services and experiences. If they do, the odds for a good prognosis in retail are high.