The news: CVS announced a $1 billion plan to shutter 900 of its retail stores over the next three years (nearly 10% of its US locations)—and convert its remaining stores into primary-care offices with services like diagnostic testing, mental health services, and hearing exams.
3 driving factors: Retail clinic giants like CVS have seen a nearly 10% bump in consumer adoption over the past two years, likely driven by these three key factors:
What’s next? Over the next few years, the race to acquire and retain healthcare consumers will likely heat up between CVS and Walgreens—which have both taken on a similar strategy to mirror traditional doctors’ offices to gain consumer trust.
In October, Walgreens announced a $5.2 billion investment in its retail clinic partner, VillageMD—and at the same time, indicated its care model will resemble traditional doctor’s offices since its clinics will be primarily physician-led, unlike retail clinics like Walmart.
Shortly after, in November, CVS indicated it’s adding more doctors to its primary care network, likely a play to keep up with Walgreens and boost its credibility among consumers:
About 16% of consumers aged 35 to 44 say they place trust in retail clinics to receive the best care, while 56% of consumers in the same group say they trust their primary care doctor, per an April to May 2021 Morning Consult survey of 2,200 US adults.
Go deeper: Check out our "Retail health clinics are banking on the COVID-19 bump" note to learn more about retail clinics' strategies to acquire consumers.