3 ways CVS is positioned to succeed
CVS has a tradition built on convenience, but the company isn’t content to rest on its laurels. At NRF’s Shop.org conference last week, Kevin Hourican, executive vice president of CVS Health and president of CVS pharmacy (above), spoke about how the drug store chain is innovating not just to survive — but to grow.
“If you’re not constantly innovating your own business, someone else will be innovating the business you’re in and taking the consumer you’re attempting to serve from you,” Hourican said. “You must have a constant stream of innovation of services that are customer-focused, solving unmet needs or reducing friction in how the consumer interacts with you.”
The company starts by leading with purpose: CVS’s decision four years ago to eliminate tobacco from its stores is a prime example. While tobacco was a $2 billion business — not including the additional items those customers purchased once they were in stores — Hourican said it was an “easy decision. If we want to be the world’s most preeminent health care company, we can’t sell a product that literally kills people.”
The purpose-driven commitment didn’t stop there. CVS recently announced it will stop altering beauty imagery created for stores, marketing materials, websites, apps or social media, and will work with its suppliers to do the same.
A second focus is an innovation mindset. Noting that 83 percent of Americans are concerned about the rising cost of medications — and that 20 million adults say they don’t take medications because of cost — CVS built the Pharmacy Savings Finder tool. The proprietary software lets pharmacists look for savings options: generic substitutions, a conversion to a 90-day prescription, even therapeutic options, all of which can save customers up to $75 per medication, Hourican said.
Furthering its commitment to innovation as a means to help consumers, CVS is preparing to launch a new, icon-based prescription labeling and scheduling system. Half of Americans are confused about how and when to take their medications, Hourican said; the Script Path tool understands medicine combinations — what can and can’t be taken together, what needs to be taken with or without food, what needs to be taken in the morning and at night.
“This is the value we can bring forward by being local in 10,000 stores,” he said. “It’s not just about a digital app that does the same thing. It’s about the conversation our pharmacist will have at the local store with consumer to educate them about this idea schedule.”
Finally, CVS understands the need to be omnichannel, and connect with customers how, where and when they want. The company was founded on convenience, offering drive-through and 24-hour service, and convenience “is being redefined as delivery,” Hourican said. CVS is the first and only national pharmacy chain that delivers both medications and front-of-house products; a recent partnership with Teledoc gives customers 24/7 access to nurse practitioners who can answer questions, diagnose symptoms, write prescriptions, have them sent to a local store, filled and delivered in less than an hour.
“Unless we’re bringing forward solutions that solve customer problems, we become stale,” he said. “Retail isn’t dead. …. Retailers that don’t understand their consumer, aren’t investing in stores and aren’t investing in omnichannel — those are the retailers making headlines for going out of business.”