At Gartner L2’s recent Focus clinic, one of the many topics that L2 founders Scott Galloway and Maureen Mullen discussed was the competitive advantage represented by brands having physical locations, even in a heavily digital age.

Physical locations offer a number of obvious benefits, such as building brand awareness (the original out-of-home) and the ability to immediately touch/feel/try on the product. They also offer fantastic opportunities to deliver a better and more meaningful brand experience. For example, to counter the one- and two-day delivery windows offered by e-tailers, Walmart and other established retailers are quickly moving into click-and-collect, which for certain goods is both more convenient and a better user experience (porch piracy is real and never convenient…)

How is this relevant to healthcare?

The combined threat of disruptive newcomers and sector turbulence (M&A, startups, rumored equity swaps, partnerships, government intervention, etc.) has sparked an unprecedented wave of moves and countermoves by organizations along the entire healthcare continuum. The relevance and appeal of integrating the digital and the physical is most apparent at the final touchpoint between the care-community and the patient, i.e. where and when patients actually take possession of their prescriptions.

While Rx pharmacy options have been pretty stagnant for a long time (pick-up, limited-area-delivery, and mail order), disruption has arrived in the form of online players such as Capsule and one of Amazon’s latest acquisitions, PillPack.


There are inherent strengths to both the physical (you can’t get a digital flu-shot…) and the digital (when you have a sick kid, being able to text a pharmacist at 3AM is huge).  The winners are going to blend the best of the two, and they are going to do it before everyone else. You only have to take a quick peek at the chess moves being made by more traditional pharmacies to see this playing out.  While not strangers to digital engagement, both CVS and Walgreens are expanding their healthcare and pharmacy services.

CVS, which ranked 24th in Gartner L2’s Digital IQ Index: Big Box US, is certainly not standing still.  Even while piloting an AmazonPrime-like service, CarePass, CVS is leveraging its extensive physical footprint by moving to turn pharmacies into “Care Hubs.” This will allow the new CVS/Aetna organization to both capture more of the patients bypassing primary care physicians and earn a higher share of wallet by integrating the care experience. The combination of digital and physical services from pharmacy, Minute Clinic, CarePass, Specialty Pharmacy, and Coram’s infusion services represent an incredibly strong competitive position that pureplays simply can’t match.

Walgreens, which ranked 12 positions higher than CVS in the study, is not sitting idly by either.

“We have the space. We should use it,” Dr. Patrick Carroll, Chief Medical Officer at Walgreens Boots Alliance, said when discussing the brand’s move to expand the delivery of healthcare-related services through its nearly 10,000 locations. The alliance clearly put this strategy in motion earlier this year with its partnership with MedExpress, opening a number of co-located facilities. This strategy, when combined with Walgreens Boots expanding on its partnership with FedEx to ensure next day-drug delivery, clearly telegraphs that this digitally “Gifted” brand sees the threat, and is reacting.

Move. Countermove. And it’s just beginning.  Expect additional moves by Walmart, Amazon, Krogers, and others.

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