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Why your local supermarket should rather become a health services company

By Anurag Gupta | March 04, 2015 | 0 Comments

Internet of ThingsBlurring Industry Boundries

Obesity is the new smoking. Nearly 1/3rd of Americans & an alarming 2/3rd of UK is classified as obese. Obesity is also linked to many health problems. Shrinking health budgets and rising life expectancy are already straining the health apparatus. Governments have been cranking up the supply side levers: like population health, integrated care, coordinated care etc; but to effectively manage the crux of the problem, we need to tackle the demand side of the equation, aka people’s health status itself. One way to do this is emphasising exercise & prevention (attention doctors: this means you will not have a regular supply of sick patients) through life style changes (both the uberfit & worry wells). The other oft neglected way is to manage the weekly shopping basket, with the target of less smoked bacon & more vegetables (Yes, an occasional treat is ok). How to do this? Incentivising healthy shopping is one answer. Experience shows that aligning incentives at the right place can significantly change behaviour. So for ex: If I go out shopping and I am instantly rewarded (we humans have a tendency of grossly underestimating the long term gains) for getting those greenies, then I will surely buy. That is exactly what happens when I buy a pack of greenies from Sainsbury’s & swipe my Nectar card (the Sainsbury’s loyalty card) which is linked to my health insurance account with Prudential. Prudential rewards me with points which add up over the year to cash-back bonus aka money back into my account.

Imagine now, if my local supermarket could create a customised diet plan for my needs, by analysing my past purchase (I prefer spinach over celery), needs (as an active person in my late 30s I need a healthy supply of protein), specific requirement (my purchase of cough syrup this week means that I may have a cold or a sore throat and hence I should stay away from cold yogurt). This could be a weekly plan & emailed to me in advance. If I consent to it, then the package could be delivered to me through home delivery or everyday morning. ‘Connected fridges’ and like, are just round the corner which means that (see our forecast here: Forecast: Internet of Things, Endpoints and Associated Services, Worldwide, 2014) there is a way for me to track the overall compliance to my stated goals and perhaps also motivate me. Just like my insurer rewards me for healthy behaviour, there is no reason, why governments should not consider providing a tax rebate to those retailers who encourage healthy living & thus keep health costs down. In an interesting experiment in the UK, pregnant women were offered shopping vouchers to stop smoking (source: http://www.bmj.com/content/350/bmj.h134 )

Food Retailers are already sitting on a trove of purchase data. The initial use of analytics & data mining helped retailers derive information about product placements (an anecdotal example is placing diapers & beers close together). The evolutionary next step should be linking purchase history to the buyer. How? The answer is through the use of ‘Loyalty cards’. Loyalty cards & customer data analytics is gaining so much traction that Whole Foods (a premium retailer), which has famously shied away from loyalty cards, is now considering its use too. Retailers have been flirting with healthcare some time now. Retail Clinics are the fastest growing segment in the US (and these are usually within the supermarkets). BUPA in UK has also set up clinics in supermarkets. Walgreen (which also owns BOOTS Pharmacy) has its own branded fitness wearable. RiteAid pharmacy has HealthSpot doc-in-a-box for tele-consultations. If a company like Tesco (underlying backbone is Tesco’s data analytics firm: Dunnhumby ) can successfully hold & leverage the customer shopping data (while also benefiting the customer with the right set of coupons); there is no reason why it cannot apply the same set of logic to the ‘health data’ of its customers. The data collected by retailers can also be used to build an ecosystem of developers to write apps. For ex: an API for an app to keep the user motivated (as otherwise the use of wearables drops off in about 45 days’ time, as users lose interest).

Yes, we will need to sort the issues of privacy, consumer consent & scaling up the concept to an entirely different level. But now may be a good time to start..

What do you think ?

 

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