Is healthcare immune to the pitfalls and consumer demands placed on retail?

More posts

Is healthcare immune to the pitfalls and consumer demands placed on retail?

With Sears entering into bankruptcy and the likes of JC Penney, J Crew and Office Depot at serious risk of closing, we see a growing graveyard of giants who have not been felled by David-like start-ups or competitors but by their own poor decisions and an unwillingness to shift their focus from profit (often achieved by cost cutting and scaling back) and legacy systems to innovation and consumer-centric experiences. Earlier this year Toys R Us closed their doors and some hypothesised that the collapse heralded the death of bricks and mortar shopping.

But we have seen a growing trend across the world that has shown us high street retail is far from dead. The difference is that where retailers have been particularly successful, more money is being invested in creating exceptional experiences to keep people engaged, excited and coming back for more. While Toys R Us and Sears offered a dull and almost depressing experience, Nike flagship stores have basketball courts and treadmills where customers can test shoes. “New York’s coolest concept store”, STORY entirely reinvents itself every three to eight weeks, offering community-focused retail experiences. Disrupting the way beauty retail is traditionally experienced, it organises product by “how people live”, rather than price point, demographic or category. Giving people exactly what they want and deserve and going above and beyond to give them things they didn’t even know they wanted is the retail experience of the future both in store and online.


It’s not personal

When we look at the giants we have failed, a pattern emerges. In all of these cases we can clearly see the impact of a failure to embrace digital innovation and a poor bricks and mortar customer experience. Gone are the days where loyalty survives a consistently disappointing experience. So, ignoring the demand for delightful digital experiences and countering with a scaled back bricks and mortar experience is a sure-fire recipe for a quick exit and a place on the big high street in the sky. A brand’s connection with consumers should be personal. Businesses should know their consumers. They should know what makes them tick, they should know what turns them off, they should know what they value and what they avoid. At the moment too many businesses focus on what they need from their consumers and not on what their consumers demand from them. This is true beyond retail. Every interaction a brand or organisation has is with a consumer who has specific challenges and desires they are trying to satisfy. But consumers are too often left underwhelmed or disappointed because their needs aren’t met.


Actually, it is personal

To thrive businesses need people to behave in a valuable way. And for the most part they will, if given most of what they demand. People are simple. They have basic needs. If those needs are met, people are more likely to exhibit the valuable behaviours businesses need to see.

– People demand value. If there is no genuine value exchange they will vote with their feet.

– People want control. They want to understand what is going on and what their options are. They want to be in control of all of the information all of the time.

– People expect to be delighted. People expect to find what they want in the place they look for it and in the format that they expect it to be presented. They also expect something extra. Something that lifts their spirits or makes them smile or even just doesn’t get in the way.


Do the same rules apply in healthcare?

The answer is yes. According to research findings announced on March 5, 2018, by NTT DATA Services, US healthcare consumers want simple and reliable digital interactions for routine transactions, such as filling prescriptions, accessing test results, and making doctor appointments. 59% of U.S. consumers expect their healthcare digital customer experience to be similar to retail. Stefan Biesdorf a principal at McKinsey reports that more than 75% of all UK patients expect to use digital services in the future. In this context, we are seeing the beginning of a slow but seismic shift in the healthcare industry too. For too long, healthcare has been driven by profits and the limitations of legacy processes and systems. This has meant that the end consumer, be they patient, administrator or physician, has been viewed as just a cog in an already moving machine and not as the driving force setting the course of that machine. Opacity about pricing and the motives behind decision making, and a clear focus on profit not consumer has left the healthcare industry perfectly placed to be rattled by disruptors who want to deliver a better more democratic consumer experience in an innovative way. Retail giant, Amazon, has seen an opportunity and has begun to move on the slow-to-react healthcare giants.


What happens when a retailer steps into healthcare

With their well-rehearsed and monumentally successful approach to people, innovation and experience at the heart of their entry into the healthcare market Amazon has recognised that affordability should be an option and that by improving the end-to-end purchasing experience and by demonstrating compassion for their employees as they road test an alternative to current insurance options they can make a significant and positive difference to how consumers interact with healthcare brands.

Number 1Amazon deliver value. Amazon has recognised that everybody should be able to afford to care for themselves. People demand cheaper, more accessible healthcare. With their Perrigo Basic Care line Amazon are selling unbranded over the counter products including ibuprofen, allergy medicine, laxatives, hair regrowth treatments and nicotine gum that are in most cases significantly cheaper than branded alternatives. They are also selling medical devices direct to patients with an emphasis on choice and simplicity of purchase. While they are not yet looking to provide access to prescription medications due to restrictions and regulations, there is some talk about future plans to do so. In the mean-time for the cash-pay market in the US, Amazon could serve as a market hub that lists drug prices at different pharmacies.


Number 2Amazon wants to put people not middlemen in control. Amazon wants better coverage, clarity and care for their employees, so in the boldest move yet Jeff Bezos has partnered with Jamie Dimon of JP Morgan Chase and Warren Buffet of Berkshire Hathaway to offer their employees and their families an appealing and innovative alternative to dealing with insurance companies which “all-too-often involves ancient technologies such as faxing” according to Bob Kocher (a partner who specialises in health care information technology at venture capital firm Venrock). The move will give employees and their families a better option on health insurance and will not be motivated by profit but rather by experience, clarity and compassion. The plan to deliver on these ideals is simple. Cut out the middle men. If their new company (yet to be named) is successful they could expand their reach beyond their employee base and significantly rattle the insurance industry.


Number 3Amazon is delighting people with simplicity. Amazon knows that the process of buying medical supplies is antiquated and complicated. Medical practices deal with tried and tested partners to buy supplies where affordability is very seldom a driver and the journey to purchase can be unwieldy. Amazon is also betting that those who buy supplies for medical practices are comfortable shopping online and will demand the same ease of use and rewarding experiences. Amazon, who introduced one-click shopping want to bring the same winning approach to the medical supplies marketplace. “We want to create an experience similar to the way people shop at home,” said Lori Torgerson, an Amazon spokeswoman. That way buyers can easily compare products and pricing and account options. The business site offers additional functions, such as allowing multiple users on a single account, requiring approvals from supervisors and enforcing spending limits. So, everything can be done in one place.


Can healthcare companies adopt the retail approach to answering consumer needs?

With some degree of irony, Amazon knows that the audience it serves are also its biggest challenge. Human beings are irrational animals so success can never be accurately predicted no matter how many of the critical elements are in place. Analysts have cautiously documented the fact that doctors and dentists often have their preferred providers whose processes and paperwork they have come to learn and aren’t as sensitive to prices as might be expected. Amazon has also seen evidence that consumers of their Basic Care line are not displaying the loyalty we might expect to see because people want instant gratification when buying over the counter medicines. They will pay more not to have to wait for delivery. Healthcare businesses have an opportunity to capitalise on the existing connections they have with their consumers. Whether they resist disruptors due to established habits or if it’s because they trust the suppliers they have come to rely on, pharma companies have an audience. They just need to make their consumers the drivers of their decision making. The good news is that Stefan Biesdorf’s McKinsey report also tells us that the core features patients expect from their health system are largely mundane. Consumers want efficiency, better access to information, integration with other channels, and the availability of a real person if the digital service doesn’t give them what they need.

Some established healthcare organisations are already showing consumers some real love both digitally and in their real-life interactions:


– The Children’s Hospital at Leicester Royal Infirmary in England’s East Midlands let children drive themselves to the operating room by providing them with miniature electric cars. This makes operations less daunting.

– Hospitals are known for being cramped and having lots of artificial light. Studies have shown that patients treated in sunny rooms have shorter stays than those treated in darker rooms. Masonic Children’s Hospital in Minnesota uses a patient-controlled lighting system to help decrease hospital stays in babies and children.

– Some patients run hot, while other patients need their rooms to be warmer to treat their symptoms. In an effort to increase patient comfort, many hospitals are installing individual temperature controls that allow each patient to set their room to their comfort level.

– AXA recently launched Realise Health Plans (delivered by LiveSmart). This provides consumers with blood marker tests that identify health risks e.g. liver disease, heart disease, diabetes. This plan also shows people how they can improve their health/wellbeing with one-on-one telephone coaching and personalised advice on products that can help them.


These are many more, great examples of consumer centric focus in healthcare but not nearly as many as we see in the retail sector.


Consumers are in control. Ignoring them is too big a risk

Retail has evolved to meet the needs of consumers. Those who haven’t are dying out spectacularly and at a rapid pace. Healthcare executives must understand the importance of knowing and understanding the HCP/patient population. Consumers are expecting interactions with healthcare organisations that are similar to experiences that they have with Amazon, Google, and other large retailers. If healthcare organisations do not re-think their approach to customer experience, they will begin to lose their market shares to companies with more retail-oriented healthcare delivery.

Sorry, but comments are now closed.