Retail goes Healthcare. A short message only, hardly taken up in European media: The US electronics retailer Best Buy has acquired a healthcare company: Great call. For $800 million. Great Call offers a whole package of health care services, mobile and decentralized, i.e.: at home.
A short review: Best Buy, de facto the US counterpart of Europe´s “Media Markt”, was facing insolvency just a few years ago. Consistent cost reduction, new store layouts and above all a concentration on new customer needs have led to a turnaround. Only recently, Amazon was considered the existence-threatening competitor of Best Buy. Amazon is now seeking the proximity of Best Buy and entering into strategic partnerships.
Future picture of retail and health
With this acquisition, Best Buy enables itself to extend the Smart Home solutions from its program a significant step and to act as a provider of health services. There is no doubt about the strategic importance of the segment anyway. Smart Home is an enormously growing segment in the electronics trade, even though its practical use is still limited: music, everyday shopping, some security and surveillance, lights on and off. At the same time, the market is growing enormously. The reports differ in detail; all in all, we can expect the market to quadruple from the beginning of 2017 to the beginning of 2018, with increasing momentum.
This is clearly based on concrete expectations for the future of both the retail and the healthcare sector. They will be even more influenced by technology. Wherever providers can offer highly personalized services, they will enable meaningful and profitable business models. Best Buy also points to the strong growth of potential customers. The company expects +50% of the US population to be over 65 over the next 20 years. I recently explained why I consider demographic change to be an enormously promising development. This assessment is again proven here.
The step of adding services to hardware sales is neither new nor revolutionary in itself. With the dynamics smart home solutions show in the market, it makes sense to want to supplement services here, that at the same time open up new industries and markets. Whoever is able to enter the customer´s house … We would expect this from every digital ecosystem operator from iOS to Android, from hardware producers, as well as from industry specialists to defend their own business models. However, this is where the retailer becomes active. This is a clear indication of which players across all sectors see very sober opportunities to realize business models in the healthcare sector. It´s just: Retail goes Healthcare.