Healthcare Innovations: CVS Rises in the…

Healthcare Innovations: CVS Rises in the Digital Pharmacy Age

Digital disruption is transforming most industries, but it has created a particular challenge for traditional drugstores especially since Walmart and Costco have entered the bourgeoning, multi-billion dollar pharmacy services with healthcare innovations allowing many folks to order products online at the expense of in-store traffic.

Major players must adapt their model to serve more traditional pharmacy customers as well as digital natives. Let’s look at how CVS, the pharmacy magnate with the largest share of prescription revenues in the United States (totaling near $100 billion), is addressing this industry shift.

Serving the On-Demand Pharmacy Consumer with Healthcare Innovations

A major part of CVS’ new healthcare innovations strategy was adding minute clinics to a number of stores to help customers who can’t see their doctor, or in some cases don’t have a primary care physician. In addition to shifting into a health care platform, they began making significant inroads into medical technology and on-demand healthcare accessibility.

In 2015, they opened a digital innovation lab in Boston to develop fresh products for a new generation of healthcare customers. This represented a move into the rising world of telehealth, in other words remote health services that can be provided via internet or mobile device. Telehealth can potentially offer everything from prescription management, access to doctors, content delivery and even remote diagnostics. Not only can it enable CVS to extend care to people in remote places or with mobility issues, it also fulfills the desire of younger consumers to have digital on demand services as they seek new healthcare innovations.

Balancing Customer Attitudes

As they dive into the brave new world of technology, CVS must balance their strategy and services between both modern and traditional customer needs. For example, Hitwise discovered several major distinctions between CVS’ online customers and in-store buyers, including their perceptions of healthcare and pharmaceuticals.

The brick-and-mortar CVS customer is more likely to be older, more conservative and trust doctors and pharmaceutical companies. Meanwhile, the online CVS audience tends to be younger, more headstrong and skeptical—preferring to conduct their own research on health-related topics.

CVS Image 1

These insights can help CVS improve their training process to foster a more reassuring experience for in-store customers, who will likely prefer getting expert health guidance from an authoritative source—rather than be provided with a lot of context or options. On the marketing side, CVS may also decide to prioritize in-store promotions for brand name health products and medical supplies.

Meanwhile, CVS must satisfy the younger online customer’s desire to investigate, research and understand their health choices. Online customers are 30% more likely than the average person to research treatment options on their own, rather than asking their doctor. In this case, developing reliable, self-guided health information — or perhaps pursuing a partnership with a medical content resource — could be extremely valuable for CVS in attracting and retaining more freethinking, headstrong digital consumers.

These audience differences appear to ring true across the pharma industry. For example Walgreens, the second-largest pharmacy store in the US, shows a similar generational and political gap to CVS; Walgreens website visitors are more likely to be 35 – 44 years old, while in-store shoppers over-index for 55-64 years old. visitors are most likely to be Super Democrats, while brick and mortar shoppers skew towards Conservative Democrats.

Interestingly, the desire demonstrated by online pharmacy consumers to take control of their own health appears to concentrate most heavily amongst app users:

CVS Image 2

In this case, the more mobile and on-demand the customer engagement is, the more likely that consumer is strong-headed about their own diagnoses and health choices.

As the pharmaceutical and healthcare industries continue to collide with the digital and mobile world, on-demand health services will undoubtedly be at the forefront of consumer demand. Brands who can more efficiently provide consumers with access to information, doctors, prescriptions and medication will surely win out. However, it will also remain crucial for pharmacies to meet consumers where they are, and provide a healthcare experience that supports the varied needs of online, mobile and in-person healthcare consumers.

Note: Walgreens data pulled using Hitwise’s AudienceView over 8 weeks ending March 18th.

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