Target sells ‘connected health’
Last year, Target made high-profile moves into the wellness space, both on the sales floor and in the break room. The retailer swapped out candy for granola at some of its checkouts and announced that it was offering Fitbits to 335,000 employees as part of an effort to promote employee health. Now Target is making a wellness move that appears to be further carving out the healthy niche it sees itself filling. The chain is debuting a portion of the store called the “Connected Health” section.
The retailer is promoting two fitness-tracking products from health device company Qardio as the flagship products of the new section, according to Digital Trends. The devices, QardioArm (a wireless blood pressure tracker) and QardioBase (a wireless smart-scale) are not new to Target’s shelves, but customers will now be able to try out the devices in the store’s new section.
The Connected Health area will consist of six-foot-wide displays in 550 pilot stores and will sell a total of 14 devices, according to Twice. The sections are reported as being part of the stores’ pharmacies, though there is no word on how this relates to the relationship between Target and CVS, which recently acquired Target’s in-store pharmacies.
This is not Target’s first attempt to use wireless devices as a foundation for rebuilding its brand. Last year Target debuted its “Open House,” a showroom devoted to IoT connectivity, in downtown San Francisco.
But whereas Target’s IoT showroom has some similar competitors — Sears, for instance, opened a San Francisco showroom also geared towards showcasing solutions for a perfect smart-home — the “Connected Health” section has a unique focus on health-related wireless devices available for in-store trials.
If the CVS connection were to come into play, Target’s “Connected Health” store area might become a hub for managing all of a customer’s healthcare data, making Target a middle-man between the customers’ health-tracking devices and the in-store pharmacy. This would allow Target and CVS to offer targeted add-ons or promotions based on a Big Data picture of a customers’ health needs.
- These Two Qardio Health Devices Will Anchor Target’s Connected Health Section – Digital Trends
- Exclusive: Target Testing Connected Health Sections – Twice
- Target to Offer Fitbits to 335,000 Employees – Bloomberg
- Will the Target/CVS pharmacy deal lead to a future merger? – RetailWire
- Sears vs. Target: Which store operates the best connected home showroom? – Techhive
- Is Target crazy to swap granola bars for candy at its checkouts? – RetailWire
Discussion Questions
DISCUSSION QUESTIONS:
Is Target on the right track with the “Connected Health” section it is piloting? Could Target become a destination for health-related wireless devices and related services as they continue to grow in popularity?
Poll
BrainTrust
Naomi K. Shapiro
Strategic Market Communications, Upstream Commerce
Ryan Mathews
Founder, CEO, Black Monk Consulting
A six-foot section is not a big investment of real estate inside a Target store, depending on its location (Electronics? HBA?) and how it is pulled together with other health-related or IoT products. If Target intends to make a statement about its brand leadership in the wellness category, it needs to think carefully about a shop concept. Just putting granola bars at the checkout lanes and pushing organics isn’t enough to maximize the opportunity.
Target is very much on the right track, leading the way with “Connected Health” and functions and services and merchandise related to this sweeping, all-encompassing phenomenon/trend — anything related to health and wellness. There’s no doubt this will include health-related wireless devices, related services, support, counseling, mobile apps, etc.
As described, this sounds a bit more like an exercise in retail “toe testing.” The space commitment is not significant and Target has been carrying the devices already.
So, when you re-position existing inventory it looks more like new merchandising rather than a new direction.
Ditto with the changes at the checkout. Does the food section of the store still carry salty snacks, cookies loaded with refined sugar and soft drinks? My guess is yes and, while I’m not being critical, this “mixed merchandising message” isn’t the way to stake out ground as an integrated health and wellness solutions provider.
Could Target become “a” destination for wireless health devices? Well … I suppose they could. But, so could drug stores, gyms and spas, Best Buy and anyone else with a cash register.
Could Target become “The” destination for these devices? Not if they keep hedging their bets.
They are indeed on Target with this initiative. The success of connected devices is being able to convey their benefits to the shopper. Health is definitely a benefit that everyone values. The possibility of Target and CVS working together to serve their customer’s health needs is extremely compelling.
Through connected devices, Target will become the repository of customer health data while CVS becomes the dispensing pharmacy. Adding a trusted name in medical information and diagnostics, like the Mayo Clinic (?), into the equation could create a very powerful “Connected Health” closed-loop initiative.
Any health-related sensor/device manufacturer would be extremely interested in becoming a vendor partner to Target. It would not be surprising (they should definitely do this!) to see Target develop and introduce their own private-label sensors.
After the way they handled their big data breach, Target would be the last company I would trust with my health data. And while I appreciate the focus on health-related devices, I question if Target will spend the money to staff the department with knowledgeable associates to show consumers how to use them.
Yes, Target is on the right track. As Dick Seesel mentioned, six feet may not be enough real estate as this category continues to expand. The future of “connected health” (digital, wearables, monitors, etc.) will certainly not slow down any time soon.
And I could imagine a retailer such as Best Buy capitalizing on this trend and creating a store-within-a-store concept across other retail formats.
Health-focused wearables and associated apps have a good deal of consumer interest. This looks to be a product area that will benefit from a high degree of on-site support and offerings of many other health and fitness related products. Is Target’s six-foot wide demo area enough to show their commitment to these health-focused products and to give the information to make consumers comfortable making the purchase within their stores? I think they will need a larger commitment to be successful in this fast-growing segment. But it is a start.
Yeah, because when I think Target, I think health and wellness (read this sarcastically). Ryan’s point is well-taken — they are not a company or a destination committed to health and if they try to create that concept, it will conflict with their cheap chic message and just confuse people even more. Better they focus on keeping their shelves stocked, their prices reasonable and creating assortments that interest shoppers.
While this may be a good initiative by Target, Target management always strikes me like they are looking for that silver bullet to solve their problems. Their moves always seem to be tactical responding to whatever is hot and never strategic for the long term.
The Target management must step back and look at the whole and ask, “what are we and where are we going?”
Target will find a receptive group of shoppers who have an interest and a willingness to be a part of “Connected Health.” The Target shopper base is more affluent and better educated than the general population — household income is more than 7.9 percent higher and years of school completed is 15 years for Target and 14.7 years for adults 18 and older. In addition, the Target shopper base is younger. The average age is 42.4 vs. 45.9 for the adult general population. Millennials and Generation X are particularly loyal to Target.
Nevertheless, Target shoppers have a higher level of concern about health care costs impacting their spending ability. More than one out of four are concerned/very concerned about health care costs upsetting their household budgets. While generally healthier than adults 18 and older, Target shoppers do report having a higher incidence of allergies, being overweight, experiencing anxiety and depression, and having headaches/migraines.
The positive news among Target shoppers is that they are significantly more likely to have health insurance from their employer, spouse’s employer, or direct from an insurance carrier. Over seven out of 10 (72.3 percent) have health coverage in this manner vs. 59.6 percent among adults 18 and older.
“Connected Health” plays in nicely with these factors for Target and their customer base. It is consistent with their healthier living strategies. It should even offer added trips or extend store shopping time for this big box retailer.
I believe so. This move reinforces Target’s strategy in grocery to be more health and wellness focused. Target perceives wellness as a journey about choices. It plans to help its guests through this journey by providing the right products and selections. Wellness for Target is not a category. It is a journey. Connected health is another tool for customers to safely navigate the journey of enhanced health and wellness.
Target is capitalizing on an existing trend to bring health-related awareness and items into retail markets. Health consciousness has always been a retail trend to watch, but the explosion of health wearables, fitness apps and surge of high-end fitness apparel in recent years has made it an unavoidable trend for mass-market retailers. I agree with the assertion that combining the Connected Health section with the CVS pharmacy locations could create a health destination within Target stores. It eliminates the need to travel to different locations to buy devices, food, apparel and other health-related products.
Despite the current popularity of personal fitness devices, I’m not sure that consumers will want to make Target the hub of their personal health management. The image of folks sitting on the blood pressure chairs at CVS and Walgreens may not be appealing to Millennials, and personal health management has a privacy component that suggests online methods will be the preferred delivery channel in the future.
Target would be better off adjusting their wellness image via the food and snack products it merchandises near check out and leave the personal health management to others.
PS: I would be willing to bet that many Fitbits and similar devices will be found in dresser drawers with dead batteries in two to three years. For people who have just a passing interest in personal fitness and health, the use of wearable tech may be a fad. Let’s see what transpires.
This would be a killer category if Target adopts a Barnes & Noble “Nook” implementation to create connected devices that tie into Target:
Then go further:
I do not see this potential/opportunity outline but if Target were smart, they would realize they’ve got their own “Nook” if they tie those wearables into Target-branded apps and enhanced services.
This is a great concept, but really calls into question Target’s positioning and traffic flow. This would work well if it was limited to just the pharmacy, where people wait, and would end up being the pharmacy waiting area, however, it appears that it would be a location for testing, and for their customers to stop, chat, and develop a community. This changes the traffic flow, and shopping concept at Target to one where it is more like a community and chat location like a Starbucks. Dedicating this much space to non-retail sales might definitely impact the bottom line….
With the partnership with CVS, I will have to say yes! This is a perfect fit and should have wide appeal to both their existing shopping base and to bring in new ones.
The gadgets and health connection is big for Millennials and they do so love to “hang” and play with devices.
This is a win-win for my 2 cents.
Target has tried (and successfully so in may cases) to be different than its competitors. The “Connected Health” program can give them another position in a segment that gives them the opportunity to connect on a different level with their customers. I anticipate that the CH program will endear itself to certain customers, creating that connection that will lead to more frequent visits and loyalty from those customers. Let’s see how it goes.