At CVS, store brands are ever-expanding into new and often unexpected categories. Brenda Lord, vice president of store brands and quality assurance for CVS Health, spoke with NRF about how and why the chain’s $5 billion store brand product portfolio is now selling everything from a new Michael Graves designer line of durable medical equipment like canes and walkers to a line of sustainable cutlery, plates and cups made from bamboo.
VP of store brands and quality assurance at CVS Health
When did CVS start emphasizing its store brand products — and why?
We increased our focus about eight years ago. It first came from our interest in reviving high-quality products across CVS Health and other private brands sold at a value price. This way we had more options for customers to not pay the same rate they pay for national brands. But the emphasis began in earnest about four years ago. We put considerable focus on continuing high-quality standards but doing more under our store brand as a point of differentiation so that we’re leading, not following.
You were just getting off the ground in a big way with your store brands, then along came the pandemic. What was the impact?
The pandemic made a big difference for us. For the CVS Health line, it was a practical opportunity to amplify the path that we were already headed down. It validated our sense of purpose and how we try to bring that to life with our store brands. Value has been particularly important the past few years.
Where do your store brands stand now, in terms of sales?
The CVS Health line is the top-selling brand in our front store business.
How many SKUs of all kinds does CVS sell in all its store brands?
About 7,000.
What percentage of total sales do all CVS store brands account for?
Just under one-quarter of all sales.
What’s your newest and most innovative store brand line?
The CVS Health Michael Graves line of products to assist our elderly customers. It’s our first major collaboration with an outside design firm.
What kind of products are you talking about?
We started with two canes, a shower chair and stool, a three-in-one commode, a raised toilet seat and a travel walker.
How do you make this medical equipment “innovative?”
When you look at the market customers have had the opportunity to buy from, you realize that, until now, this customer has not been well-served. It’s the basic product that’s lacking. So, we rolled up our sleeves and worked hard to determine customer insight to better serve this consumer group.
How did you decide to make medical equipment products for older consumers?
There were gaps we were seeing in our customer base. We recognized we could merge this need with improved function and design. We spent quite a bit of time with customers and caregivers. They told us about the importance of strength, security and stability with this equipment.
What were the problems that customers and caregivers were telling you about?
Customers told us they were embarrassed and felt quite a bit of shame using this equipment. We recognized the importance of personality and empowerment for this group so they could feel better about using these products. The products are more graceful, elegant and design-focused but still usable and functional.
Why did CVS wait so long to create a store brand for durable medical equipment serving the elderly?
We should all be frustrated. I can’t think of another consumer product category with so little innovation. There’s innovation in the home products and baby products space. But durable medical equipment is a big, bulky product category. We still have to work to get in front of the customers and help them understand what we offer. We’re pretty passionate about getting customer attention for this category.
How has consumer perspective of store brand products changed in recent years?
There’s been momentum in the marketplace of customer acceptance of store brands with both younger and older customers. There’s no longer a stigma attached to buying cheaper store brands.
That’s at least in part because store brands are changing, too, right?
That’s right. Store brands are increasingly embracing things that are important to customers like sustainability, social issues and inclusiveness. With the growing importance of these values, we are responding in kind, so our portfolio is focused on expanding brands of purpose.
Such as?
Like our Live Better line. There’s a heavy focus on ingredients. For example, the Live Better Apple Cider line is made with ginger and turmeric. Some purchase it for digestive support. But with the growing interest in the population in non-alcoholic choices, it also can be used to make great mock-tails.
What about sustainability in store brands?
There’s a line of compostable utensils from our Total Home brand. These are utensils, plates and cups made from bamboo and birch. This is part of our increased focus on selling environmentally friendly products. Our focus is on how to make all 7,000 store brand SKUs more sustainable themselves where it makes sense.
Choose carefully what you want to achieve and obsess over the details. We don’t need more products on the shelves without a solid sense of purpose. Don’t add clutter to the shelves that doesn’t help the customer.
What’s your fastest-growing store brand line?
The largest portion of our store brand business is under CVS Health. There are 14 of 18 categories where we are the No. 1 brand (outselling national brands in the same category at CVS). We also are No. 1 in the beauty and personal care space, which is surprising to many people.
What’s your top-selling store brand item?
Vitamins.
What other new store brand lines are on tap?
Across our line, our purpose is to have small, “a-ha” factors that make a difference in our customers’ lives. Our goal is to keep looking across the lines for places with unmet needs where we can make a difference.
Such as?
Well, the Good Line was our first foray into men’s grooming. We worked with 90 guys to understand from them what they’re actually interested in and what types of materials and ingredients matter. The common belief was that guys don’t care. That’s not true. We are delivering with products that feel good in the hand and on the skin. We’re not outselling Gillette (in our stores), but our customers are telling us we’re heading in the right direction.
What’s your best advice to other retailers that are just considering getting into store brands?
Choose carefully what you want to achieve and obsess over the details. We don’t need more products on the shelves without a solid sense of purpose. Don’t add clutter to the shelves that doesn’t help the customer.
Are there any marketing costs for store brands?
We do not spend as much marketing store brands as national brands. But that’s something we’re continuing to work on. In the Michael Graves line, for example, we want to tell a story so the customer gets it. So, there are places we are exploring how to tell that story that may require some marketing expenses.
Had CVS had any store brand bombs?
There are a number of products that come and go. In 2016, we launched a product that we thought would be brilliant, CVS Health Single Serve Cold & Flu Cups, where the cold medicine went right through the coffee maker. That was an innovation we were excited about. It came in flavors like berry and honey lemon. But it didn’t sell. It’s no longer available. People felt squeamish about over-the-counter cold medicines being delivered through the same machine that makes their coffee or tea. Sure, there was a convenience factor, but customers did not embrace it.
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