Drugstores Revamp: Navigating New Looks Amid Business Hurdles

The retail pharmacy landscape is experiencing a seismic shift, and it’s not just because of seasonal flu shots or enticing sales on toothpaste. Walgreens and CVS, two formidable names in the industry, are embarking on transformative experiments that could redefine how we think about drugstores. Imagine walking into a Walgreens that’s a mere quarter of the size you’re used to, or seeing an entire primary care clinic nested inside a CVS. These aren’t science fiction fantasies; they’re the potential future of retail pharmacy.

Walgreens, grappling with stiff competition from Amazon and budget-friendly options like Walmart and Dollar Tree, has decided it’s time to rethink its strategy. CEO Tim Wentworth has hinted that a significant portion of underperforming stores might be shuttered in the coming years. The company is already experimenting with smaller stores in Chicago, featuring digital kiosks for placing orders. This innovative approach isn’t just a flashy gimmick; it aims to cut operational costs while extending the company’s reach into areas that can’t support larger stores.

These scaled-down Walgreens locations started making their debut in 2019, and the company plans to expand this concept further. Gone are the days of leisurely browsing through magazines or picking up a last-minute greeting card. Instead, these stores focus on essential items and convenience. Interestingly, these new stores are closed on Sundays and are often situated near vacant traditional Walgreens stores, creating a stark contrast in customer experience and business model.

Meanwhile, CVS is also dabbling in downsizing but with a twist. Some CVS Health stores are integrating Oak Street Health primary care clinics, offering a streamlined experience for patients. The idea is simple yet profound: make healthcare more accessible and convenient, thereby fostering stronger relationships between customers and store staff. Arielle Trzcinski, a principal analyst at Forrester who covers healthcare, emphasized that such ease of access can drive repeat business, a crucial factor in today’s competitive market.

Both Walgreens and CVS are no strangers to the healthcare sector. Walgreens, for instance, had initially launched VillageMD primary care clinics but has since closed several of these locations. This pivot shows that even the most well-laid plans can undergo reevaluation and change. However, the overarching goal remains the same for both giants: to create a more lasting connection with customers by improving access to care.

The landscape of retail pharmacy is thus poised for a revolutionary change. If these experiments succeed, we might soon be living in a world where your friendly neighborhood drugstore is more than just a place to pick up prescriptions. It could become a hub for essential services, offering everything from healthcare to digital conveniences, all under one roof. The future is unfolding, and it’s smaller, more efficient, and potentially, far more engaging.