ORLANDO, Fla. \u2013 Let\u2019s start with Walmart.<\/p>\n
A few years ago, the retail giant found itself in an unusual position: retreating from a major healthcare bet.<\/p>\n
Despite its resources, clout, and name recognition, Walmart threw in the towel on a major healthcare bet. Walgreens did as well. But others, including Amazon and Costco, instead saw an opportunity to make the same general concept work for them \u2013 but of course doing it their own way.<\/p>\n
Welcome to retail healthcare. Companies are experimenting with how to pair everyday shopping with medical services. The results have been mixed \u2013 with quiet successes like Target Optical and high-profile failures like VillageMD. What comes next could reshape how Americans access care, not in the next few decades, but in just a few years.<\/p>\n
Walmart\u2019s rare failure<\/p>\n
In April of 2024, Walmart announced it was closing down its in-store health centers<\/a>. You\u2019ll be forgiven for not knowing they even had in-store health centers as there were only 51 of them.<\/p>\n Launched in 2019, the company had planned to have from 75 to 100 health centers by 2024. Touted as a \u201cone-stop model of healthcare\u201d<\/a> Walmart executives thought they had discovered lightning in a bottle: Americans needed convenient healthcare and 90% of the U.S. lives within 10 miles of one of their stores or Supercenters<\/a>. Services offered would include primary care, lab work, audiology, writing prescriptions, and even X-ray imaging<\/a>. <\/p>\n On paper, it made sense. In practice, it didn\u2019t.<\/p>\n Citing a \u201cchallenging reimbursement environment and escalating operating costs\u201d, at the time of the announcement to shutter the storefronts, Walmart stated their Walmart Health Clinics<\/a> were unprofitable and \u201cunsustainable for us at this time\u201d.<\/a> The company\u2019s SVP of Healthcare Delivery Dr. David Carmouche posted on LinkedIn: \u201c\u2026though it didn\u2019t end where I had hoped it would…there will be a time in the future to think about and discuss the challenges specific to retail healthcare.\u201d<\/a><\/p>\n Walgreens as well<\/p>\n That same year, Walgreens was also singing a similar song.<\/p>\n Rewind to 2020: the company invested over $1 billion in VillageMD (for a 30% stake); the following year they plunked down another $5.2 billion <\/a>to acquire a controlling stake in VillageMD (bringing their ownership up to 63%). Plans were to have over 1,000 co-located Village Medical at Walgreens primary care practices in the U.S. by 2027.<\/a><\/p>\n Instead, by 2024, the company said it was writing down the value of VillageMD as a loss of around $6 billion and closing 160 VillageMD primary care clinics<\/a>. Root causes for the closings: big money losses ($1.7 billion in 2023 alone) and problems attracting enough patients. Add one more thing: \u201ca professional stigma against clinicians working in retail stores.\u201d<\/a><\/p>\n Costco\u2019s bet on fertility care<\/p>\n So, if Walmart and Walgreens \u2013 two of the biggest names in American retail \u2013 couldn\u2019t make healthcare work, why are others still trying? The answer may come down to a different strategy: less infrastructure, more partnerships \u2013 and a focus on avoiding the pitfalls that sank earlier efforts.<\/p>\n Instead of building full-service medical clinics, retailers like Costco and Amazon are focusing on narrower, high-demand services, often delivered virtually or with minimal infrastructure, while leaning on partners for in-person care.<\/p>\n That subtle shift could be the difference between failure and staying power.<\/p>\n Fertility care is the latest battleground \u2013 and while both Costco and Amazon are moving in, each is taking a very different approach.<\/p>\n Costco may have the boldest strategy. The warehouse giant is partnering with Sesame Care for IVF virtual visits<\/a> and IVI RMA North America<\/a> for testing and referrals. The Sesame Care plan runs $119 a month, or $99 with a Costco membership<\/a>, while IVI RMA provides discounted clinical services. The real savings come at the pharmacy<\/a>: Costco says the program can cut IVF medication costs by up to 80% \u2013 drugs that can run from $3,000 to $6,000 each cycle. <\/a> <\/p>\n Rather than build a new business or a network of clinics, Costco and its partners are leaning into a coordinated care model<\/a> \u2013 one designed to work with and without insurance<\/a> and target cost (one of the biggest barriers to treatment). And the demand for IVF \u2013 it\u2019s real. Costco says 1 in 6 Americans struggle with infertility<\/a> and in 2021 alone, 86,146 babies were born through IVF.<\/a><\/p>\n Amazon\u2019s approach is different. Rather than building a network of outside partners, the company is leveraging its existing One Medical platform \u2013 a hybrid of virtual and in-person care<\/a>. Through One Medical, patients can access fertility counseling, hormone testing, and referrals to specialists,<\/a> all managed through an app that handles appointments, prescriptions, and follow-ups.<\/p>\n In effect, Amazon is trying to simplify the process by using technology to guide patients through what can often be a complex and fragmented system.<\/p>\n The bottom line: Costco is focused on lowering the cost of fertility care, particularly expensive medications. Amazon is focused on lowering the friction \u2013 making IVF easier to access, navigate, and manage.<\/p>\n Rethinking strategy<\/p>\n Costco and Amazon appear to be following a new retail healthcare playbook \u2013 cautious development and a clearer strategy. Instead of trying to replicate full-service hospitals or primary care systems, they are focusing on narrower, more predictable services \u2013 essentially ones that are easier to scale and control.<\/p>\n The two companies have also learned from other healthcare models already in the market:<\/p>\n CVS MinuteClinic:\u00a0A more traditional, in-store approach offering standardized, walk-in services like screenings, vaccinations, and basic women\u2019s health \u2013 designed for consistency and volume. MinuteClinics don\u2019t take up a lot of space in existing CVS buildings and aren\u2019t mandated in every store.<\/p>\n Target and Walmart Optical:\u00a0Focused on routine, high-demand services like eye exams and glasses \u2013 a segment that is both predictable and consistently profitable. Again, not in every store and the retail space needed for the optical departments is limited.\u00a0Costco also has had success with its own optical departments.<\/a><\/p>\n