CVS Pharmacy - Reinventing the Corner Drugstore
Most Moms have a go-to drug store and pharmacy where we dash in to pick up everything from prescriptions to nail polish to paper towels. For me, I find myself in my neighborhood CVS every week, scanning the aisles for must-have items for my family – most recently, restocking supplies for our home, gathering up travel items for our next trip out of town, and helping my teens find what they need as they head off to college next month.
So when I received an invitation to an event at CVS Headquarters in Woonsocket, RI, last month, I responded immediately with an enthusiastic “yes!” And, since I partnered with CVS earlier this year on a “Spring into Savings” program, I also looked forward to reconnecting with the CVS team. The three-day meeting provided an opportunity to get a behind-the-scenes look at new in-store innovations and to meet with key CVS representatives – including CMO Rob Price, SVP of Merchandising Judy Sansone, General Manager/CVS.com Dustin Humphreys, Divisional Merchandise Manager/Beauty Care Debbie Armstrong, Brand Manager Phil Greil, and VP of Pharmacy Professional Services Papatya Tankut.
Between these executive briefings and sneak-peaks at upcoming in-store developments, we developed a deeper understanding of the CVS brand. Overall, CVS considers itself a pharmacy innovation company and looks to make health care simpler, more affordable, and more convenient. I’ve included some key take-aways below.
CVS ExtraCare Card: It can be easy to overlook the CVS card, as it disappears into the bottom of my purse – but I’ve discovered it offers such incredible deals that I make sure I know where it is at all times. And at this event, I gained an even better understanding of how the ExtraCare program works and how CVS views it as a way to enhance its relationship with its customers and generate a stronger customer connection.
The CVS ExtraCare program represents the largest loyalty program in the world, with 275 million unique cards issued since it began 14 years ago. Today, over 90 million households have used the program over the past 12 months. While the card offers significant deals for customers, it also offers CVS the opportunity to optimize promotions, get a better handle on inventory needs, better target its advertising and marketing, and offer personalized, digital promotions.
The company makes an increasing effort to ensure that customers unlock the money-saving capacity of ExtraCare rewards and offers ExtraCare Coupon Centers in nearly all locations. Customers can scan their cards as they walk into the store and receive personalized coupons and instant savings offers. These machines offer coupons not available any other way and can help introduce non-coupon-clipping Moms to the world of on-the-spot savings.
CVS also takes a two-pronged approach to customer savings – through “rewards” and “savings.” The CVS “rewards” program includes the ExtraCare program, as well as ExtraBucks rewards offered through the CVS circular. In addition, CVS allows customers the ability to send many of its online rewards directly to customers’ ExtraCare cards for easy redemption.
Finally, CVS offers additional “savings” to customers, which includes weekly sales and specials, the in-store coupon center, offers at register, and email deals.
Pharmacy Innovations: The roots of CVS continue to be the pharmacy – it comprises 70% of retail business and features approximately $120 million in sales. The overwhelming message from the CVS pharmacy centered around getting back to the basics of the pharmacist/patient relationship – akin to the role the old corner drugstore played with families in previous generations. Today, CVS brings this experience to life through its Minute Clinics and personalized management of family healthcare through the pharmacy features on CVS.com.
CVS offers Minute Clinics in 600 of its stores nationwide. Nurses and Physician Assistants staff the clinics and can treat an assortment of minor illnesses, as well as handle vaccinations, health and wellness screenings, and administrative physicals – including ones for summer camp. The clinics accept most insurance plans and typically don’t require appointments.
CVS revamped the pharmacy feature on CVS.com to help families better manage their prescriptions and health care. Through the personalized prescription center, families can see prescription histories in one place and print for easy viewing and tracking. The site also allows for easy online refills, a calendar to manage refills and expiration dates, and an option to receive text message alerts when prescriptions are ready – 4 million customers have already opted in for the texting service. Money-savings offers exist at the pharmacy, as well, as pharmacists offer information on the availability of generics.
Throughout all facets of the pharmacy, the CVS pharmacists remain available to families for education, counsel and questions. By housing all prescriptions in one place, families can easily get back to the “corner drugstore” experience and develop relationships with CVS pharmacists to help address such issues as drug-interaction and medication side effects.
CVS Beauty: Another key CVS area that remains focused on innovation includes CVS Beauty, which encompasses cosmetics, nail, hair, and skin care, as well as fragrances and accessories. CVS also offers customers its ExtraCare Beauty Club, allowing customers new ways to save, including 10% off beauty purchases after they join, $3 in ExtraBucks on their birthday, and $5 in ExtraBucks rewards for every $50 spent on eligible purchases in the beauty category. Today, more than 12 million members have joined the ExtraCare Beauty Club, and CVS has issued $94 million in beauty-related ExtraBucks.
In addition to savings, CVS Beauty also offers compelling educational elements for customers, including live chats and video tutorials with well-known experts. In the near future, CVS plans to add a dermatologist to its panel of experts, as well as offer more personalized rewards, including new product giveaways, and rewards for being active community members.
A number of beauty-related lines continue to generate excitement – especially the nail business, which has increased 40% over the last year. CVS will now offer a new in-store nail boutique, as well as ways to allow customers to take advantage of – and save money – on the hottest new nail trend – gel manicures. These long-lasting manicures typically cost $40 at salons for just one application, but CVS offers a do-it-yourself Gel Manicure Starter Kit that cost $59.
In addition, CVS added a number of new exclusive-to-CVS lines, including Katy Perry’s lash line from Eylure, as well as Salma Hayek’s line of Nuance hair care products. Another fast-growing CVS beauty category includes skincare, headlined by the exclusive CVS line, Essence of Beauty. CVS positions the line as an “everyday indulgence,” with low prices compared to Sephora and other name brands.
Finally, fragrances continue to play a key role in the CVS beauty category. The CVS team takes a great deal of time determining the fragrance offerings, working with European fragrance houses and identifying new lines for 2013. The team faces challenges because of the large variety of business it does – fragrances selected have to have wide appeal due to the large CVS audiences.
Key Impressions: Overall, the three days with CVS offered an in-depth look at how seriously the company takes its focus on innovation combined with personalized services. The pharmacy remains one area where they’ve seen great success with this integrated approach – I can easily see how the personalized counsel from skilled pharmacists would have wide appeal for families and could translate to renewed loyalty. It remains to be seen, however, how CVS will morph this strategy toward the front-of-the-store business – with its current focus on efficiency, e.g., no roving floor help and limited staffing at registers. Clearly, CVS continues its trajectory as a company on the move – and I look forward to experiencing its latest innovations the next time I pop into to my corner store.
Disclosure: Stacy DeBroff attended a blogger meeting in Woonsocket, Rhode Island to facilitate this review.