As Amazon and Walmart’s endeavors in the healthcare space continue to advance, the choices the two giants make are aligned to their respective company cultures. They continue to cater to their core customers in the same ways as usual, sometimes despite the conventions of healthcare, a novel space for them.
Walmart, America’s neighborhood health destination: convenience, transparent pricing, and lower fees
In the latter half of 2019, Walmart launched the Walmart Health Center in Dallas, Georgia, providing essential health services, such as physician-run primary care, labs, X-ray and EKG, counseling, dental, optical, hearing and community health education, all within one facility. Pricing is low and transparent, regardless of customers’ insurance status. Walmart’s aim was to bring quality, accessible and affordable healthcare to its customers, covering the greatest and most prevalent concerns in the US healthcare system.
As of May 2021, they have 20+ Walmart Health Centers across Arkansas, Georgia, Illinois and Texas, with the ambition of opening 4,000 primary care supercenters by 2029, which will include clinical laboratory testing services. It is anticipated that they will differentiate their offerings across geographies, catering to regional needs. For example, in Georgia, there are limited primary care options, and there’s less access to care generally. And in Florida, the high population of senior citizens with fixed incomes will be attracted to a low-cost model, particularly because they are frequent healthcare users.
Walmart’s three primary advantages include:
- Low prices that stand out from rivals
- The clinics are doctor-led, whereas most competitors in this space are NP- or PA-led
- They have a well-defined base of customers already shopping at locations convenient to them
In essence, Walmart iscreating brick and mortar healthcare sites, which advance their stores’ longstanding mission to “save money, live better.”
Amazon, a segmentation of one: instant gratification, convenience, and personal health for the individual
When we look at Amazon, we see that their approach, by contrast, is to turn healthcare into a Netflix-like experience for their customers, by tailoring their services to people with different needs, expectations, and preferences. As opposed to emulating the brick and mortar of traditional primary healthcare, they are trying to reimagine the healthcare experience in a digital environment. How might customers engage in the process, and what inhibits them from following through with healthcare appointments?
Understanding patient needs early on in the digital engagement process is essential to success, particularly with respect to directing patients to the appropriate endpoint, like whether they need in-person or virtual care, or what the optimal channel is, e.g. phone call, video conference or chat. (For some patients, having to put their social security number into a digital form is a red flag.) Considering the amount of data that Amazon has on its consumers—not just what they buy, but how they navigate the system—makes it easy to direct their patients to the modality or venue of care that matches their needs.
Amazon’s approach is not about a segmentation of the population to ages, incomes and regions, but creating a segmentation of one—you. With all the information Amazon is able to gather about an individual—purchases, navigation preferences, Alexa engagements and more, and add to that monitoring devices such as Amazon Halo, new diagnostic devices, and telehealth services—they have the unique capability to extend what they already do to healthcare. They offer instant gratification and convenience designed for the healthcare needs of the individual, all done in under 3 minutes.
Despite Walmart and Amazon’s divergent approaches, there are many respects in which they are competing and providing similar services. When one of them makes a move, the other is quick to follow. This is particularly evident with regard to telehealth and remote healthcare services, pharmacy prescription delivery, and evolving health insurance and supplementary insurance options. One thing is clear: these big retail players are changing the healthcare landscape and customers’ expectations.