How pharmacies and retailers like Walmart, Kroger, and Rite Aid could benefit from the vaccination push

January 18, 2021

View the original story on Business Insider written by Tanya Dua.

  • Pharmacies and retailers helping administer coronavirus vaccines could see a boost to their own businesses, experts say.
  • The vaccination effort is a chance for pharmacies show how they’ve been revamping their businesses as some big-box retailers make inroads into healthcare. 
  • In addition to more foot traffic and sales, these retailers could also get a boost in their budding advertising businesses. 
  • The vaccination rollout also offers drug makers a chance to improve their reputation.
  • Visit Business Insider’s homepage for more stories.

As pharma giants, non-profits, and government agencies embark on a multi-million dollar effort to convince Americans to get vaccinated, pharmacies and other retailers could see a related windfall for their own businesses.

The US Department of Health and Human Services has signed on dozens of grocery and pharmacy chains across the country including CVS Health, Walgreens, Target, and Kroger to help administer COVID-19 vaccines. This effort is a chance for them to drive people to their stores and boost sales, experts said.

Pharmacies have been hit hard in the pandemic, with Walgreens and CVS Health’s stocks and sales dropping by double digits earlier in 2020. Their business has since picked up, Walgreens’ sales increasing 2.3% to $34.7 billion in the fourth quarter of 2020 versus a year ago; and CVS Health’s revenue increasing 3.5% in the third quarter.

“Vaccines being administered at pharmacy and retail chains is likely to drive more traffic to them, as the recipients may use the opportunity to fit in a shopping trip, particularly in strip mall setups outside of cities,” said Donna Tobin, EVP of marketing, communications, events and partnerships at ad trade body 4As.

The vaccination effort is a chance for legacy pharmacies show off how they’ve been revamping their businesses even as big-box retailers Amazon and Walmart have been expanding into healthcare clinics and pharmacies. Walgreens and Rite Aid, for instance, have tried to appeal to a broader audience with primary care clinics and curbside pickup and health and wellness products. 

“Legacy pharmacies and big-box retailers are poised to be winners, because in order to vaccinate the country, you have to have both a retail presence and supply chain logistics in place,” said Chris Paquette, founder and CEO of healthcare ad platform DeepIntent. “But Walmart will be the biggest winner, because it’s the only one that has both.”

Drug stores, for their part, are seizing the opportunity to remind their customers why they matter. In recent months, Rite Aid has revamped its website and put out a new logo and new TV ad to pitch itself as both a healthcare and wellness destination. 

Meanwhile, Walgreens has already started targeting customers with educational information based on the local availability of vaccines and their eligibility to get it, said Laurie Blair, its head of brand and product marketing. The brand is also prepping a brand marketing campaign for when the vaccine becomes more widely available, she said. 

“Our brand has been at the cornerstone of community and serving their healthcare needs for hundreds of years, and this is a chance for us to reintroduce the Walgreen’s brand to them,” she said. “As they start going back into stores, we want to make sure they’re thinking about Walgreens.”

While increased foot traffic may most immediately lead to increased sales, these pharmacies and retailers’ budding advertising businesses may also get a boost, said John Lods, CEO of digital media-buying agency Arm Candy. With online sales booming during the pandemic, retailers like Walmart, Target, and CVS have started to use their platforms to sell advertising alongside consumer products.

“I’d be surprised if their sales teams are not calling the largest CPG brands that they carry to try to get them to advertise more on their retail media platforms,” he said.

The vaccination drive may also be a chance for drug makers like Modern and Pfizer to redeem themselves, Shannon Walsh, managing director at Ogilvy Health, told Insider.

Big Pharma has faced longstanding distrust and vaccine skepticism — particularly among communities of color, where there’s a long history of medical exploitation.

“The communication, messaging, and how the messages are delivered can really help them show how they’ve aided this and how they’ve helped get our freedom back a little bit,” she said.The coronavirus pandemic