Health, wellness and the total store: Linking Walmart pharmacy operations, in-store marketing
A retail pharmacy giant is beginning to fully harness the power of scale. Now firmly established as one of the top retailers of prescription drugs in the United States, Walmart may soon lay claim to an even bigger share of the pharmacy and OTC market as its leaders learn to align pharmacy operations and in-store marketing efforts more closely with other departments within Walmart’s Supercenters, discount stores and Neighborhood Markets.
To do that, the company is changing the relationship structure within its store and field management organizations. The goal: to build bridges of opportunity and mutual support among the various store departments so that the health-and-wellness side of the business can mesh more seamlessly with Walmart’s overall mission of value and one-stop shopping. And the end result, said Paul Beahm, SVP health-and-wellness operations for Walmart U.S., could drive more traffic to both the pharmacy and to other store departments.
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Beahm, a 28-year Walmart veteran, acknowledged that pharmacy is “a specialized business that has a complexity to it.”
“Prior to the relationship change, ... we focused on the complexity of it, instead of how much commonality we have between health and wellness and [the rest of the store],” he explained. “So the change was, ‘Let’s begin to align one to one, and be seen as one team.’”
That more holistic, total-store approach has helped elevate the role of pharmacy, health and wellness within Walmart’s total-store offering. “The ideal situation today is that when a regional [pharmacy manager] goes into a store, they don’t just go to the pharmacy and vision center and focus on pharmacy and vision topics. They ... look at the departments like baby [care] — the offerings that holistically mean health and wellness to the customer,” Beahm said.
“The goal is to leverage the larger box, the larger business,” he pointed out. “And that only happens through relationships. That’s something that, frankly, we pushed really hard on the last year.”
“If we’re going to close the gap on penetration for health and wellness for the total buy, relationships within the field organization to educate each other on the businesses become one of the most important things,” Beahm added. “So the structure of our field organization is really built around relationships and education, and the end goal is conversion of those [customers] who aren’t using our services.”
‘A tremendous year’
There’s no doubting the scale or market reach of the enterprise. Walmart operates some 4,500 in-store pharmacies in all 50 states.
“We have 17,000 pharmacists, 4,000 opticians and 65,000 associates out in the 4,500 stores” who serve the pharmacy, health-and-wellness side of the business, Beahm explained. Its pharmacists, he added, already “do more than provide medications.” They serve as “part of a continuum of care for our customers, providing clinical services, such as immunizations and comprehensive medical reviews, which include walking patients through their entire health profile as part of their preventive care.”
Under the company’s hub-and-spoke organizational framework, store districts are overseen by pharmacy marketing directors, each of whom is in charge of about 12 Walmart pharmacies. In turn, those directors report to one of 40 regional directors, who Beahm said are “typically but not always centered [along] state lines.”
In charge of those 40 regions, he added, are nine divisional leaders, each of whom has a counterpart on the GM and food side of the business management structure, “so there’s a cross-functional team and relationships, and a structure that supports our pharmacists and the market leaders.”
That means that field and store management are now “aligned geographically,” Beahm added. “But more than that, it’s about how we help each other be successful in each of the businesses.
As Walmart rapidly expands its pharmacy presence into more communities and more urban and suburban markets — the company added more than 100 smaller-format Neighborhood Market stores with pharmacies in January 2015 alone — that kind of cross-functional teamwork and coordinated store marketing and merchandising becomes even more critical. One example of how the approach is already working has been in the quick embrace by local communities of the new pharmacies, Beahm said.
The success of Walmart’s total-store approach to health and wellness is also borne out by recent sales results. “We had a tremendous year in health and wellness” for the fiscal year ended Jan. 31, 2015, said Labeed Diab, president of health-and-wellness for Walmart U.S.
“That doesn’t happen by accident,” Diab continued. “That’s Paul and his leadership team, along with the support of Lindsey Helt’s [senior director health-and-wellness HR] HR team, and the support of the home office team, aligning the players in the stores to the needs of our customers.”
The resources to boost clinical care
But “health and wellness within Walmart is not just about filling prescriptions,” Diab pointed out.
Added Beahm, “We want to be a health-and-wellness destination for our customers, and we’re rapidly changing as the industry moves to provide cutting-edge health services. This year, we’re adding diabetes and disease state management services to our list of clinical services provided by our pharmacists in select stores.”
“These pharmacists will be trained to provide ongoing, in-depth counsel to diabetic and chronic-disease patients in an effort to help them effectively manage their disease,” he said.
To that end, Walmart Pharmacy now employs 53 clinical service managers across the United States who “oversee Walmart’s clinical services and train and educate our pharmacy staff,” Beahm said.
“We plan to more than double the number of pharmacy clinical service managers over the next year,” he added. “The company has given us the resources to allow them to upscale the pharmacies and work with the market directors across the United States [to develop and expand] the things that matter in wellness services,” including health screenings and disease education and management for conditions like diabetes and cardiovascular disease. “As the launch into services occurs, those clinical service managers — pharmacists by trade and education — will spread the word ... across multiple stores within their market responsibility,” Beahm explained.
“We’re always looking for new and innovative ways to serve our customers,” Beahm said.
Walmart is also applying the scale of its pharmacy operations and purchasing power to lowering costs both for patients and health plan payers. A prime example: its groundbreaking $4-per-30-day supply generic drug pricing policy offered on hundreds of multisource, widely prescribed medicines.
“Since we launched our $4 prescription program in 2006, our U.S. customers have saved $4 billion on their medications,” de