Walmart’s strategic shift from consumer health care has marked a significant turning point in its business operations. Earlier this year, Walmart announced it would exit the consumer healthcare space, including its telehealth and physical clinic operations. This move culminated in the sale of MeMD, Walmart’s telehealth business, to health care technology company Fabric. The acquisition, announced on June 28, is part of a broader trend of turbulence in retail health care.
MeMD, established in 2010 and acquired by Walmart in 2021, provides virtual care services, offering on-demand medical and behavioral health support to millions of users. Aniq Rahman, CEO of Fabric, emphasized that this acquisition aligns with Fabric's mission to innovate health care delivery through technology and exceptional patient care.
The decision to sell MeMD aligns with Walmart's broader strategy to streamline its health care offerings. Without physical clinics, maintaining a telehealth practice was unsustainable for Walmart. In contrast, Fabric’s acquisition of MeMD fits its business model, providing a boost to its capabilities and potential for growth.
Walmart is not alone in its struggles with retail health care. Walgreens and CVS have also announced plans to shut down thousands of in-store retail health clinics.
Walgreens has struggled with its in-store clinics and has announced plans to shut down a significant number of them to focus more on its core pharmacy business.
Rite Aid, meanwhile, has been grappling with declining revenues and increased competition, which have led to the closure of several stores and restructuring efforts
Greg Zakowicz, an ecommerce expert at Omnisend, explained that the financial structure of operating health care clinics often makes it difficult for companies to generate profits.
“When companies like Walmart, Walgreens, and CVS have difficulty succeeding, it should be considered a red flag,” Zakowicz stated. “Walmart will continue focusing on other forms of personal health care such as pharmacies and vision care, which will be good for the company and many of its customers.”
Despite its exit from consumer health care, Walmart remains a formidable force in the ecommerce sector. Ranked No. 2 in Digital Commerce 360’s Top 1000 list of North American online retailers and No. 9 in the Global Online Marketplaces Database, Walmart’s projected ecommerce sales for 2024 are estimated at $125.13 billion.
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