Fast Five Shorts | What Impact Will Walmart Same-Day RX Delivery Have On The Healthcare Landscape
In the latest edition of Omni Talk’s Retail Fast Five, sponsored by the A&M Consumer and Retail Group, Mirakl, Simbe, Ocampo Capital and Scratch Event DJs Chris Walton and Anne Mezzenga are joined by special co-host and Shoptalk and Groceryshop’s VP of Original Content and Strategy Ben Miller. In this clip, the group discusses: The Impact Walmart's Same-Day RX Delivery Will Have On The Healthcare Landscape
For the full episode head here: https://youtu.be/ySon4C9S-hQ
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Transcript
Walmart is expanding its same day pharmacy delivery service nationwide, as we alluded to a little bit earlier in the show, according to Chainster Age.
Speaker A:Because the Fast five needs a third pharmacy headline this week as well, the discount giant is making some making same day pharmacy Delivery available in 49 states for both new prescriptions and medication refills with some exceptions.
Speaker A: r delivery back in October of: Speaker A: ational by the end of January: Speaker A:And now they've done just that.
Speaker A:Once a pharmacist fills a customer's prescription, the customer is notified through their Walmart.com account that their order is ready to be delivered.
Speaker A:At this time they can select their delivery pre such as same day or one day and then new or existing insurance plans will be applied to the transaction as they would when picking up a prescription in store.
Speaker A:A driver brings the order to the customer's location during their preferred time window.
Speaker A:Medications are delivered in tamper evident packaging and customers can track their orders in real time.
Speaker A:Members of the Walmart plus page subscription program will receive a free pharmacy delivery as a membership, will receive, sorry, free pharmacy delivery as a membership benefit and other customers will be charged based on their delivery preference.
Speaker A:Ben, we saved this for the end.
Speaker A:You get the A M put you on the spot question A and M wants to know, looking across all the headlines today involving CVS and Walgreens and now this.
Speaker A:Do you see this as legacy retail pharmacy chains scrambling to react to a challenge sector, whereas Walmart is slowly planting new flags and setting new customer expectations that will create distance between it and others?
Speaker A:Or do you see the balance of power differently?
Speaker A:We're getting very theoretical right now.
Speaker A:This is like just put, put your best consulting hat on and answer that.
Speaker B:It's a heady question if you would, Ben.
Speaker C:I mean my initial, my initial response to that was I'm not sure because both CVS and Walgreens already offered same day.
Speaker C:So when it's about putting a gap between I think is as A and M said, well, they're playing catch up.
Speaker C:But actually I think, I think the premise of the question is wrong because this isn't about Walmart vs.
Speaker C:CVS and Walgreens.
Speaker C:This is Walmart adding another phenomenal benefit into Walmart plus because the killer line is that this is free, this is, it's an, it's, it's already.
Speaker C:If you go on to Walmart plus on the Walmart website in the US today, the very first thing you see listed on that page is free same day prescription.
Speaker C:No minimum order value.
Speaker C:Yeah, no minimum order value.
Speaker C:It's a member benefit.
Speaker C:It's same day.
Speaker C:It's the number one.
Speaker C:It's taking something that already had so much value in and layering a whole new level of value.
Speaker C:And you know, if you think about where Walmart is in that battle, it's with Amazon and okay, Amazon are working on same day but they are in a limited number of geographies because they don't have the physical pharmacy structure yet.
Speaker C:Walmart have got 4,000 stores.
Speaker C:Yeah.
Speaker C:So they've got this incredible advantage.
Speaker C:Amazon are playing hard to catch up but they are physically limited in what they can do and there's pace that they can go at.
Speaker C:Target can't do that because it's CVS that runs their pharmacies.
Speaker C:Costco are using Instacart.
Speaker C:So therefore you're adding all the fees on.
Speaker C:It's just another way that Walmart is living its value which is about serving, helping customers live better price.
Speaker C:And I think that's, that's the thing and they've done it at a speed and scale that I think only Walmart are able to get programmers away at the moment.
Speaker C:So yeah, I think it's brilliant.
Speaker B:Absolutely brilliant, amazing.
Speaker A:And when you talk about too Ben, the other things that you're adding to that order, can anyone beat that?
Speaker A:They can't.
Speaker A:They certainly when you talk about grocery items or other things that you're adding to this prescription delivery.
Speaker A:I mean Amazon's doesn't, Amazon doesn't have the breath that Walmart does when it comes to same day grocery.
Speaker A:They have other minute order minimums like $35 grocery minimum same day or like there's so much more complexity.
Speaker A:You're getting the best value for your money and the most option value I think for this Walmart plus membership now too.
Speaker C:So you know, if you want to align a delivery with your regular RS prescription alongside a general merchandise purchase or alongside a grocery order, Walmart's the only place you can do that.
Speaker A:Yeah.
Speaker C:But even if you don't, even if I need that drugstore, get it now, they'll still be the fastest and cheapest to do that.
Speaker C:And that's the winning combination.
Speaker A:Yeah.
Speaker A:Chris, I imagine you're, you're kind of, you're nodding along but I imagine that you're kind of in the same, same realm here.
Speaker A:But what do you think this does for, for Walmart and for Walmart Plus?
Speaker B:Yeah, I'm, I'm dialed up to 11 on this one too, you know, and I think, I think there's an important angle though that you guys didn't cover with this, this headline, which is, you know, and I go back to FMI this past week, like I was shocked, Dan, and I know you were too, about the number of people in and around the grocery industry that we're talking about, the success of Walmart plus and the impact they were seeing it have on the high income demographic shopper.
Speaker B:So I think that's what this is a play for because there's probably a lot of high income demographic shoppers that have never thought about Walmart for pharmacy needs because that required them to go into the store.
Speaker B:But those same shoppers that are now using Walmart plus to do their online orders will start to use Walmart plus for their pharmacy business too.
Speaker B:So if Walmart plus is already working to the degree that it is that's impacting grocery the way it is, you can sure as hell bet that it's going to have that same impact on CVS and Walgreens in the long run too, as they start to siphon off people from higher demographics.
Speaker B:That's the beauty of this play here, I think.
Speaker A:Totally.
Speaker A:And Chris, the other thing that we did hear a lot about at FMI and you were asking this question repeatedly when some of these grocery retailers that we were talking about, we're talking about adding in food service and other elements to the app and how difficult it was to get that all in one seamless experience.
Speaker A:I think that's another thing that Walmart's going to learn here.
Speaker A:Now that this is integrated into my Walmart plus app, I'm getting, I can bundle these things together.
Speaker A:This lays the groundwork for them to bundle other things in the future to continue to improve the value of a Walmart plus membership.
Speaker A:Things like, you know, getting, you know, getting delivery from other categories within the Walmart store too, as you go through different times of year.
Speaker A:Like maybe it's a garden center delivery, maybe it's a QSR component or maybe it's I or something else that they're doing in the space.
Speaker A:Like they're starting with the most difficult area and that's being HIPAA compliant and getting all these prescriptions well fueled into that one app experience for the Walmart customer.
Speaker A:And I think it's going to teach them a lot about how they can continue to add value for that seamless customer experience in the, the Walmart app or, or Walmart site.
Speaker B:Yeah, the other point I'd make too though, I, I don't think the, I don't think the being able to combine your pharmacy order with your other general merchandise orders.
Speaker B:I don't know how often that is going to happen.
Speaker B:I think the value actually comes to Walmart and being able to scale their deliveries, you know, with more units going out the door and them, them being able to combine routes, I think that gives them efficiency here too, which is more the factor.
Speaker B:I think it is a good benefit for some.
Speaker B:But a lot of times when you're sick, you need your pharmacy order, you know.
Speaker B:You know, I don't know how often that's actually happening where you're buying a pair of clothing, as you know.
Speaker A:Oh, I'm not talking clothing.
Speaker A:I'm talking chicken noodle soup.
Speaker A:I'm talking, you know, orange juice.
Speaker A:Like all these other things that you now make an extra trip to do, whether you're, you know, you're.
Speaker B:It's.
Speaker A:I think it gets back to the minute clinic thing.
Speaker A:Like I can do that in a Walmart store if I can go get my strep test and then I can go get all the other medications that I need in that one trip without having to make another trip when I'm sick.
Speaker A:Like, I think that's the benefit.
Speaker B:Yeah, that that stuff will happen.
Speaker B:When you said lawn and patio, I was like, well, you know, I don't know how much that's gonna go on.
Speaker A:I'm, I'm just talking about down the road.
Speaker A:Like it's not, it's not necessarily that you're gonna be combining an prescription order and patio.
Speaker A:I'm just talking about the fact that the Walmart app is ready to accept.
Speaker A:Gives you everything you need.
Speaker A:Yeah, well, it gives you everything you need and it's already built to control or to allow for different types of orders to all take place in one application without having to leave.
Speaker A:But Ben, last word here.
Speaker C:Yeah, I mean the final thought I'd had on it, and I'd love to know what the conversation was at FMI last week around this.
Speaker C:Because one of the big trends when we think about the U.S.
Speaker C:grocery market in the short to more medium term is the impact that GLP1 drugs will have.
Speaker C:This move by Walmart will make more of their customers and more of their best customers go to Walmart for their Rx.
Speaker B:Really interesting.
Speaker C:They'll capture the data and then they'll know also what they're buying in grocery because the category changes are going to happen, which can then drive the flywheel of better merchandising and better store propositions.
Speaker C:It gets them one step ahead on what could be one of the biggest trends coming down the road in U.S.
Speaker C:grocery.
Speaker B:Yeah.
Speaker B:And what's the biggest and what's the income demographic most likely to move into GLP1?
Speaker B:Drugs first.
Speaker A:Right.
Speaker B:Higher income people might drop by.
Speaker A:Ben, at the end.
