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A second look at retail clinics

October 4th, 2006

by Tony Chen

Previously I joined with others in predicting that the number of retail clinics will be in the thousands in 18 months or so. Consumerism is too strong of a force. Simple, quick, convenient healthcare is way too compelling to pass up. I'm still a believer.

But, let's not forget that it's still a retail business and is ruled by the laws of retail business models - location, location, location.

Case in point: Take Care is in the process of closing down all 10 of their clinics in Portland. I might be reading between the lines here, but it seems like they didn't want to pilot there to begin with, but their partners at Rite Aid convinced them. Portland is a good-sized 2nd-tier American city. The only problem is that people are really healthy there and have good access to doctors already.

One more thing to consider - Target decided to part ways with MinuteClinic even after a great 2.5 year partnership. MinuteClinic was quickly bought up by CVS. Again, read through the link here, I may be reading between the lines too much. It sounds to me that Target's not fully bought into the concept yet - it's still in pilot stage. Did MinuteClinic really want to grow faster than Target was comfortable with?

So, to recap:
- money is still POURING into retail clinics
- hundreds of clinics will be opening within the next 6-12 months
- it smells like a landgrab situation, with lots of clinic operators partnering with national big-box retailers
- Like any retail business, location, location, location still applies

In the 1980s, every hotel trying to just stay in the game had to have a pool (and now in 2006, every decent hotel has to have a spa). Same situation here? Any retailer worth anything will have to have a little health clinic? You live down the street from Target and Wal-Mart. One has one, the other doesn't? Is that enough to change your mind?

For me, definitely, if I need something there.

So if the retail clinic is like the hotel pool of the 1980s, what is like the hotel spa? In 2010, once most retailers have a clinic, how will they continue to differentiate their stores? "Today, we are offering a $100 winterization treatment, which includes your flu shot, a 15-minute massage, the new designer scarf, a hot chocolate at our in-store cafe, and a discount on this family package of cold medicines."

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