The Week in Disruption goes beyond the headlines to uncover the significance of emerging trends in healthcare and beyond.

Playing Fetch with the Competition

When a new digital upstart begins gobbling up the business of a brick-and-mortar incumbent, the legacy operation often grapples with the question of whether to purchase its competition – and potentially cannibalize its existing operation – or stand pat and continue to lose market share.

In 2016, PetSmart executives became alarmed as the nascent online pet store Chewy, backed by a commitment to high-touch personal service and a major ad blitz, began making a significant dent in PetSmart’s store sales. In 2017, PetSmart decided to buy Chewy for a hefty $3.35 billion, a move that was criticized by some observers, given that Chewy was not yet profitable.

Two years later, the decision, coupled with a revamp of PetSmart’s stores, is paying off, the Wall Street Journal reports. Chewy, which had been reinvesting its proceeds to recruit new customers, has seen continued growth since the sale. And within existing PetSmart stores, the company pared back its product line and devoted more square footage to in-person only services like veterinary clinics, grooming and doggy daycare. The move, which has proven successful, brings to mind CVS’s decision to transform thousands of its stores into HealthHUBs amid declining retail sales.

Best Buy Bets on Home Monitoring Boom

Best Buy, no stranger to pressures from online competition itself, is investing in a new wave of healthcare products to combat sluggish sales of TVs and phones. The company, which foresees increased demand from older Americans with chronic conditions who want to stay in their homes, is moving quickly to expand its health monitoring product line through acquisitions and product development.

Best Buy’s telehealth portfolio now includes emergency response devices, wireless scales for patients with congestive heart failure, and even a refrigerator sensor that can detect whether a patient has been eating. The move comes amid growing interest from insurers in remote monitoring devices with the potential to keep patients out of hospitals.

ASC Growth Stymies Device Manufacturers

Disruption in one sector of healthcare can quickly ripple through the entire industry, as patient populations shift and vendors scramble to adjust to changing demand. Medical device manufacturers currently find themselves in that position, a new report from Bain & Company suggests, because of the booming ambulatory surgery center sector. ASCs performed more than half of all outpatient surgeries in 2017, and Bain projects that their procedure volumes will rise by 6 to 7 percent a year through 2021.

While large incumbents have dominated the hospital device market, the more diffuse ASC market, with smaller operators spread out geographically, may be harder to crack, Modern Healthcare reports.

Innovation at a glance

Meet the Authors
haydn_bush.jpg
Image
Haydn Bush

Haydn Bush

Haydn Bush has two decades of experience as a journalist and communications professional in healthcare and related fields. He currently serves as VP of Thought Leadership.

Read More from The Week in Disruption