As the American healthcare system evolves and consumer approaches to healthy living shift, many retailers have begun broadening their corporate growth strategies to include consumer-focused health and wellness services. For decades, supermarkets have gotten in on the trend via pharmacy integration, but now they, too, are starting to move toward a more differentiated approach to in-store health integration, including things like immunizations, health screenings such as cholesterol and glucose, blood pressure and body mass index (BMI) machines, and nutritionists providing health consultations.
Ahold USA retail divisions Stop & Shop, Giant Food of Landover and Giant Food Stores of Carlisle are focusing on helping their customers and communities think about how food can influence and impact health from the moment they enter a store in these ways: Expanding and remodeling their produce departments, reformulating their “Own Brands” products to reduce salt and sugar, the introduction of nutritionist programs, and their kids’ nutrition and education programs like store tours and Passport to Nutrition.
It’s easy to understand why food retailers are looking to get skin in the game: Those with health and wellness services often benefit from increased foot traffic, increased sales growth, improved cross-selling, brand recognition and an enhanced customer experience. Ahold USA’s retail divisions believe they can be a positive force to inspire healthier eating by making their products more nutritious and offering new tools and services for their customers and associates. Ahold USA divisions also support medication adherence by training pharmacists and other on-site health care providers to encourage customers to follow doctors’ orders regarding medications and exercise regimens. Additionally, at least one pharmacist per store is required to be certified in diabetes management, and in one of their divisions, they are piloting an integrated scheduling tool with educational classes on key health areas epidemics that are given jointly by the nutritionists and pharmacist, all focused on helping their customers understand their health condition, its treatment and the impact of food on their health. However, retailers face a number of risks when entering or expanding in a market as complex, costly, and highly regulated as health care.
If you are a food retailer — whether a national chain or single-store — and are interested in expanding into health and wellness, here are some quick tips to keep in mind when designing a program:
• Quality and patient safety: Quality and safety are number one priorities when it comes to any consumer health program, and prevention is the watchword. No matter how you design a health platform, it’s critical to make sure that you put standards in place. If, like Ahold USA retail divisions, you’re interested in starting up food waste programs to combat food insecurity, consider instituting safeguards to confirm that the quality of non-sellable but still edible food meets standards for donation to local organizations.
• Customization is key: Think about the services your customers value most, like stocking the right food at an affordable price, assistance with healthy meal planning, and food education programs. Whatever it is, find ways to engage and encourage customers by offering services and information on how lifestyle choices — like exercising and smoking cessation — can impact customer health. By offering programs, advice, and coaching, retailers can play an active role in customer health management and, in the process, can help build trust and create loyalty.
• Map out potential challenges: In a Deloitte poll, 40% of retailers reported that the largest downside of becoming more involved in health and wellness is the potential for increased liability. Take, for example, the need to secure personal health information, the stakes can be high for retailers venturing into healthcare for the first time. Additional risks might include technological barriers (e.g., systems to track a patient’s care), coordination with providers and payers (e.g., having the right electronic medical records capabilities to share appropriate information with appropriate healthcare ecosystem members in a complete and timely manner) and billing-related risks which can affect cash flow and revenue forecasts (e.g., helping adjudicate claims completely and accurately, and get paid for them). Map these out in advance of implementing your program to create a smooth execution.
• Don’t forget about the regulators: Some retailers are looking to set up in-store clinics or to equip personnel to offer programs on specific health care issues. Ahold USA retail divisions have an onsite pharmacist certified in diabetes management teamed up with in-store nutritionists to help customers manage chronic diseases like diabetes through food education. It’s critical that you confirm regulatory compliance is met, especially since requirements vary state-by-state and federally. Things to consider include scope-of-practice rules, HIPAA patient privacy rules, and parameters around government reimbursement for certain services.
Above all, remember this: While the business case for focusing on healthy living may appear attractive, sustaining performance and realizing the benefits of this strategy require a clear understanding of operational complexities, dedicated leadership, and strong senior executive support. To learn more, check out Deloitte’s “Retail health & wellness: Innovation, convergence, and healthier consumers report.”
Marissa Nelson is the SVP of Responsible Retailing and Healthy Living of Ahold USA and Matt Hourin is a principal in Deloitte Advisory with Deloitte & Touche.