Even before COVID-19 swept through the U.S., medical clinics were increasingly popping up in retail strips, shopping centers and around busy commercial offices across the country. But the trend, known as “medtail,” has accelerated due to the pandemic.
“COVID-19 has sped up the inevitability that preventative wellness is no longer a choice,” said Willie Hoag, principal at Tether Advisors. “The retail space is overbuilt, mediocre and redundant. The innovation we’ve seen directed at that space is just the beginning. It’s exciting that a new group of players is filling former retail spots while providing access and convenience to consumers. Most importantly, the convergence could make us a healthier society.”
Tether’s recently issued 2021 Retail Healthcare Outlook study found that nearly 80% of private equity, commercial real estate and retail healthcare respondents believe medtail investment will increase in the coming year and that COVID-19 bolstered the sector’s outlook. That’s driven by investors who are looking for safe bets amid a pandemic-induced recession as well as consumers increasing emphasis on preventative care as they work to stay ahead of the coronavirus and other ailments. The report also delves into what’s propelling medtail’s upward trajectory, how different stakeholders define the convenience that’s crucial to the sector’s growth, medtail’s potential across age groups and types of care, and medtail trends related to value-based care, preventative care and omnichannel approaches. Key findings include the following: • Pandemic buoys medtail growth: Seventy-six percent of private equity, commercial real estate and retail healthcare respondents believe COVID-19 has positively impacted retail healthcare as an investment target. Commercial real estate was the most bullish at 85%. • Convenience is important – but misunderstood: Convenience is a key driver when it comes to medtail’s growth. However, the different stakeholders surveyed don’t agree on how to define it in this context. Thirty-nine percent of consumers pointed to shorter wait times, a choice that was far less popular among other groups. • Consumers still cloudy on other concepts: Some consumer education about medtail appears to be necessary. While nearly two-thirds could define preventative care, just 27% could define value-based care. However, a strong majority of consumers said both concepts were important. • Demographic breakdown: The 36-50 age group was seen as the age group most effectively served by a plurality of all stakeholder groups surveyed and by 43% overall. Respondents probably figure that medtail’s convenience will be important for busy working parents, or they might be falling back on wishful thinking about an attractive market segment. “The overall bullishness about medtail is encouraging, and it might actually understate the opportunities we’re seeing,” said Katie Killeen, VP of Tether Advisors. “Some obstacles remain – the staffing hurdles most medical retailers face are larger than ever, which is significant as reliable personnel are the backbone of every concept. But the larger trends driving medtail that have been turbocharged by COVID-19 clearly have staying power.”
Paul Bubny serves as Senior Content Director for Connect Commercial Real Estate, a role to which he brings 13-plus years’ experience covering the commercial real estate industry and 30-plus years in business-to-business journalism.
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