Finding convenience & alternative medicine at drugstores

An insightful & succinct essay from Dan Pink on how two trends happening today at drugstores are meeting the demand for both convenience and "transcendant healing," things not offered by "conventional medicine." (I've written already on "minute clinics," but the part about finding yoga and an herbalist at your drugstore is new.) Here's the full essay at Yahoo.

A New Rx for Drugstores -- and Your Investments
by Daniel H. Pink
Wednesday, May 17, 2006

I live in a household with five people, three of whom are under age 10. As a result, Mrs. Trend Desk and I spend a lot of time in drugstores -- trying to keep up with the endless cycle of teeth brushed, knees scraped, and hair shampooed. But recently I've detected two interesting trends in drugstores -- trends that speak volumes about the future of health care and about investing more broadly.

The first is embodied in an outfit with the unlikely name of Elephant Pharmacy. It's a drugstore with a twist. It sells the sorts of things you'd buy at a typical Walgreen's store. But it fills herbal prescriptions, too. And it boasts "an unprecedented selection of alternative remedies, natural body care and cosmetics, natural foods and wines, high-quality vitamins and supplements, yoga and Pilates gear," and so on. It calls itself "the drugstore that prescribes yoga." Elephant, as well as a similar venture called Pharmaca, is another sign of how products and services that were once considered exotic and counter-culture have migrated to the mainstream.

It makes sense, actually. Many of the offerings in traditional drugstores have become commodities. Consumers can find dozens of inexpensive products that can keep their teeth white and their bodies fragrant. That means that drugstores are looking for the antidote to commodification, new ways to boost sales and increase margins. Alternative and complementary medicines fill that gap.

And this directly addresses the demands of the 800-pound gorilla of the health-care marketplace: The tens of millions of health-conscious, meaning-seeking Baby Boomers. No wonder CVS, the nation's second-largest pharmacy chain, has invested in this venture. If you can't beat the elephants, join them.

The second trend in drugstores is the emergence of freestanding health clinics that provide routine medical care -- administering flu shots, diagnosing ear infections, prescribing antibiotics -- at a very low price, often under $50. These days you can find Minute Clinics inside CVS stores, Redi-Clinics at your local Walgreens, and Take Care Health Clinics at Rite-Aid.

Why are these clinics flourishing? They save consumers money, time, and hassle. And the truth is: Many medical conditions just aren't that complicated. With the aid of diagnostic software, a nurse practitioner can discover what ails you and prescribe the remedy -- all in the time it takes my wife or me to roam Rite-Aid's aisles to find some Elmo toothpaste and cherry lip gloss for the wee Trend Desklings.

Put these two drugstore trends together, and you have a glimpse into the emerging health-care marketplace. Just as physicians no longer have a monopoly on health information, with these customer-friendly in-store clinics, docs no longer have a monopoly on health services, either. Today, consumers want routine care -- think oil or tire changes for the body -- to be fast, cheap, and convenient.

But buyers are often willing to pay a premium for products and services that are more holistic, that carry a compelling back story, or provide them with a sense of meaning. This is perilous for big companies that don't adapt. But it's a potential bounty for large retailers like CVS, Walgreens, and Rite-Aid that can combine scale with nimbleness. (Full disclosure: In the last year and a half, I have done one small project for CVS. It was unconnected to the ideas in the column. I don't own shares in CVS.)