Shownotes
In this week’s Omni Talk Retail Fast Five, sponsored by the A&M Consumer and Retail Group, Mirakl, Ocampo Capital, Infios, and Quorso, A&M’s Joanna Rangarajan and Mohit Mohal joined Chris and Anne to analyze Walmart's groundbreaking move to deliver refrigerated and reconstituted prescriptions nationwide. From GLP-1s to insulin and pediatric medications, discover why our experts scored this move between 8-11 out of 10 for significance. We explore the convenience factor, competitive implications for CVS and Walgreens, and how this positions Walmart in the massive healthcare market. Tune in for expert insights on retail's healthcare evolution!
For the full Fast Five episode head here
#ecommerce #retailfulfillment #Walmart #rx #pharmacy
This podcast uses the following third-party services for analysis:
Podcorn - https://podcorn.com/privacy
Transcripts
Walmart is now delivering refrigerated and reconstituted prescriptions nationwide.
Speaker A:According to a Walmart press release, this new service includes medications such as insulin, GLP1s and pediatric amoxicillin and is available across the United States.
Speaker A:The move comes one year after piloting pharmacy delivery and less than eight months after expanding it chain wide.
Speaker A:With this move, Walmart becomes the first retailer to deliver refrigerated and reconstituted prescriptions alongside groceries and everyday essentials and in one single convenient online order.
Speaker A:Joanna, we're going to you first on this one.
Speaker A:On a scale of 1 to 10, how significant do you think the same day RX move is from Walmart?
Speaker B:Okay, so I broke it down.
Speaker B:I've got a couple different scores here, but just wanted to kind of.
Speaker B:I know, I know, but they're all good.
Speaker B:Spoiler.
Speaker B:So a couple different stats just to kind of ground us, right?
Speaker B:So health care in the US for and a half trillion dollar industry, Walmart has continuously been pushing deeper into the space.
Speaker B:60% of US adults are on prescription drugs, 25% of them are taking four or more.
Speaker B:So this is, this is definitely a ripe, a ripe market.
Speaker B:And then Walmart did say in their release that these refrigerated medications are about 30% of their, their pharmacy sales annually, which is, you know, something to the tune of 500 million prescriptions a year that they're, that they're filling on a whole.
Speaker B:And so the basket is, is large.
Speaker B:Now I think I'm gonna start with.
Speaker B:I'll give it an 8.
Speaker B:I don't know if you can see.
Speaker A:Oh my gosh, someone's been watching Dancing.
Speaker A:Yeah, somebody's been watching Dancing with the Stars.
Speaker B:I know I need my inner Karaninaba, but I give it an 8 for convenience and consumer stickiness.
Speaker B:I think that this really is, you know, around getting some additional consumers and also the convenience place.
Speaker B:So Walmart knows and has recognized that they have customers that may not be willing to shop their physical stores, but will shop them online.
Speaker B:And so this is an opportunity for them to deliver a full basket now and really go after getting that, that entire basket.
Speaker B:And we know that they've been focused on that, getting the entire basket through rapid delivery for a while now.
Speaker B:So this is another play in that direction.
Speaker B:And the convenience element can't be overlooked given that Walmart does continue to signal that time is an important currency that, that they must win.
Speaker B:And so the convenience of I can put this in my basket, I can schedule the delivery time of it.
Speaker B:This really goes beyond everyday Life and really extends into people who may work odd hours and can't make it to a traditional pharmacy for pickup or to people who don't have reliable transportation or the elderly who may not be able to drive and get it.
Speaker B:And so it does create more access for their medications to be received on time.
Speaker B:And if you've got the means for the Walmart plus membership to get this than free of any delivery charges.
Speaker B:That's just, even, just even better.
Speaker B:But I will say that I did think about it and give it one other quick score which was a nine and a half.
Speaker A:Oh, nine and a half.
Speaker B:Signaling.
Speaker B:Because.
Speaker C:Signaling.
Speaker C:That's great.
Speaker B:I do, I do really think that this is a firm statement by Walmart saying, you know, healthcare is, is very much a part of retail and we're, and we, you know, are here and intend to own that.
Speaker B:And I think we'll see what, what that does to raise the bar for CVS or Walgreens if they pull this off.
Speaker A:Well, well, brilliant scoring by Joanna on this one, I think.
Speaker A:Joanna, the other thing too, I'm not going to go as wide into the types of prescription drugs as you did with your stats, but I did pull out one stat that I think is very important, especially with the increase that we're seeing in GLP1s.
Speaker A:Drugs like Ozempic and WeGovy do have to be refrigerated.
Speaker A: And as of May: Speaker A:They're looking for the lowest price point.
Speaker A:So I think, Joanna.
Speaker A:Right, spot on to your point.
Speaker A:They're going to look for the most convenient way to get these drugs and the most affordable way to get these drugs alongside the convenience of getting anything else they need in drug and grocery in that same order.
Speaker A:And this puts Walmart, I think, in a really strategic position as you highlighted.
Speaker A:So well done, Joanna Mohit, I feel like we need to go to you.
Speaker A:Where are your props?
Speaker A:What, what are your scores here?
Speaker D:One to ten.
Speaker D:I mean, listen, I was not watching Dancing with the Stars, so I don't have, I can make up for it in other ways.
Speaker D:I think.
Speaker D:Listen, this is a very significant move.
Speaker D:Right.
Speaker D:I'll, I'll probably put it as a 11.
Speaker C:Wow.
Speaker C:Right?
Speaker D:I mean, if you kind of think about it, there's probably three tentacles to this.
Speaker D:The first one is depending on whatever data source you believe, there's anywhere between 25 to 50 million Walmart plus consumers in the US today.
Speaker D:Right.
Speaker D:And Walmart has not been shy around making sure that program grows at breakneck speed.
Speaker D:So that is one element of it.
Speaker D:The second element of it is they now control a little over 5% of US prescription market and have been seeing double digit growth in recent years.
Speaker D:Although they have been a little late to this game as compared to other drugstores.
Speaker D:And especially with some of the other changes with Kroger and Albertson, they have really picked up pace in this space.
Speaker D:So this is again a step in that direction.
Speaker D:The third element is we all saw a fundamental shift in consumer behavior and accelerating of specific trends around convenience post Covid.
Speaker D:And this just continues to kind of, you know, reinforce that.
Speaker D:Consumer is the new channel.
Speaker D:Right.
Speaker D:And you gotta serve them in the way they are most used to and kind of, you know, where they kind of want to go in the future.
Speaker D:So what I do expect to see is beyond this.
Speaker D:Right.
Speaker D:Like, what would be Amazon's response?
Speaker D:You know, how do Walgreens and CVS kind of respond to it?
Speaker D:You know, if you have to look at both CVS and Walgreens, they have really thought about partnership as an approach to deliver these capabilities versus building it in house.
Speaker D:Amazon is going to be different.
Speaker D:So, you know, in the end it's going to be a big, big win for the consumer is how I see this.
Speaker A:Yeah, absolutely.
Speaker A:Chris, we've got, We've got an 8.5, a 9.5 and an 11.
Speaker A:What is your score?
Speaker A:I feel like we just need to throw away the format and we're just going with Dancing with the Stars at this point.
Speaker C:Oh, yeah, right.
Speaker A:What's your grade?
Speaker C:What's my grade?
Speaker C:I'm gonna give it a 7 and 5.
Speaker C:8.
Speaker C:Yeah, so I'm gonna go a little bit lower here.
Speaker C:Okay.
Speaker C:And there's a couple reasons for that, I think.
Speaker C:You know, one is, one is the consumer.
Speaker C:The consumer has to want to do this.
Speaker C:So if I assume the consumer wants to do this, then I think it is on the pretty significant scale.
Speaker C:And 7 and 5, 8, it's still a pretty strong score, don't get me wrong.
Speaker C:Especially for me.
Speaker C:And the Walmart plus thing, which has been said is huge.
Speaker C:I'm a convert on that as you are now.
Speaker C:Like I go to Walmart plus first every time I want to order something over Amazon.
Speaker C:I've just gotten in that habit now.
Speaker C:It's what I do because the service is actually really good.
Speaker C:They keep you informed of where things are.
Speaker C:The delivery seems to be faster as well.
Speaker A:Yeah.
Speaker C:And, and so like now they're adding RX to it and so it compels me to try that at some point.
Speaker C:And so net net at the end of the day it means incremental revenue and share in what is a large, almost essentially new business for Walmart in a lot of ways in terms of getting this delivered online and with the new demographic too, as Walmart plus is showing, you know, gets you into the higher paid demographic.
Speaker C:The caveat I have with it though is and Moet, I didn't think about it until you said this and Annie kind of bridged off what you said too is will the consumer actually want to do this?
Speaker C:Like, you know, is getting a refrigerated prescription, does that create more friction or less friction for me if I get that delivered to my house versus just going and picking it up because then I gotta be there at a certain time that delivery has to arrive.
Speaker C:So I do worry a little bit that, you know, Walmart's been doing a lot of great things but you know, you can't go too fast on some of this stuff too.
Speaker C:And I imagine there's some pain points that are going to be uncovered along the way.
Speaker C:So that's why I'm a little bit of them.
Speaker C:Like I'm not quite a 9, 10 range.
Speaker A:Yeah, it'll be interesting.
Speaker A:Since they rolled this out so quickly, I mean, eight months after they started piloting this, my guess is that they, they have a lot of those, they found out a lot of those kinks, you know, early on.
Speaker A:But I think, you know, closing us out.
Speaker A:Chris, I think I thought too about like the pediatric amoxicillin too.
Speaker A:I mean, how great would it be to be leaving the doctor's office, have the, the refrigerated amoxicillin plus, you know, any other drug needs or vitamins or whatever you need to get your kid back and healthy and not have to bring them into a store.
Speaker A:Like I think it's stuff like that, that if you're right, as long as they got the timing down and they can make sure that that product is still arriving in the condition it needs to be, it is offering that convenience that Joanna talked about at the start.
Speaker C:So yeah, confidence interval has to be very wide to do this correctly.
Speaker D:So.
Speaker C:All right.