NEW YORK — CVS Health on April 19 officially debuted a new store design to enhance the retail customer experience with a new assortment of healthier food, health-focused products and expanded beauty selections, paired with informational signage throughout the store to help customers discover new offerings.
The company’s front of store today will clearly not be its front of store tomorrow. According to CVS, combined with its innovative digital programs, these changes represent the “next evolution of the customer experience at CVS Pharmacy.”
To discuss some of these changes, Drug Store News sat down with Judy Sansone, CVS’ SVP front store business and chief merchant, at a company event that introduced these changes in New York City.
To read DSN’s April 19 story that first introduced the changes, click here.
DSN: In terms of store design, what changes will customers see when walking through CVS Pharmacy doors with the new store model?
Judy Sansone: A big part of how we developed this design is with a customer-first [approach]. We did a lot of customer research, and what we found is the customers’ view of health is changing. She’s much more empowered, and also needs a sense of discovery. Not just in beauty, which we’ve done really well, but in core health. When I think about the core anchors in our store — beauty, health and healthy food — what we see is many more proactive solutions about managing health. So if somebody were to be walking away from our new format, they’d be saying ‘Look at all of the ways I can control my health through all of these great solutions.’
In health care, [there's a shift] from sick care to self care. With a category like sleep, a few years ago it was based on an OTC product. Now, we’ve actually supplemented the mix because customers are looking for things beyond traditional solutions, such as ... non-pill forms, headphones that help you sleep, a quiet mist humidifier or a sound machine. There are several things we are proactively curating to help a customer manage their health. That comes through with skin care for beauty, sun care and, in particular, we’ve taken out low-SPF products and added high SPFs and more natural products in our stores.
DSN: Since CVS exited the tobacco business in 2014, improving and adding to your health and beauty offerings has been a top priority. How well has this worked thus far, and what feedback have you received from customers about the changes you’ve made?
Sansone: The tobacco exit was such a pivotal point for us. At the same time, CVS changed its name to CVS Health. For us, that created a filter change. Because of who we were, it started to make us ask questions about what we should be doing as CVS Health versus where we were previously. We started with the customer. What did they say? The day after our tobacco exit, customers were so happy ..., but they said, ‘What’s next?’ The first thing they asked for was healthy food. As the customer has changed the perception of who CVS is, the bar gets higher. So she has asked us for more healthy food, and 50% of our healthy food mix today is healthy, better-for-you products. That was not true a few years ago.
On the beauty side, we are also eliminating ‘chemicals of concern’ from beauty products — parabens, phthalates and formaldehyde. These are things that customers are talking about that set a higher bar for CVS.
DSN: Other industries, such as convenience stores, still stock a lot of less healthy products. You already touched upon the healthy lifestyle, but what made you certain that adding better-for-you products was the right move?
Sansone: Consumers should certainly want healthier products, but we don’t stop there. We care about the business, too. We’re looking at the results and what we know is, the customer is buying these products. CVS doesn’t carry the breadth of [food] products that a grocery store does, so we definitely look at industry data about what products are selling well. We also do direct research with our customers to understand what trends are important. A great one we have coming up in back-to-school time is a focus on foods that are allergen free. If you’re a parent of someone with an allergen, it’s a big concern for you. Many of our customers talk to us about the needs for products that are allergen free.
In the same way, we found that our customers really wanted gluten-free products. Thirty-eight percent of our ‘products with purpose’ — about 800 SKUs — are gluten-free. It’s a growing trend in the industry. We look at what customers are asking us for, and we look at the data.
DSN: Tell us about some of the specific changes you are making in beauty.
Sansone: We are doing a lot of work on trend areas. Korean beauty is one of the most recent trends we added to the stores. But we’re also adding a number of exclusive products. These products are coming from small, independent brands and are reaching a new customer. Customers are very excited about beauty, so we are creating a trend area in our stores for it.
DSN: As part of the front-store transformation, CVS announced it would add 100 ft. of new merchandise in health, beauty and healthier food, and use a streamlined layout to highlight themes that make shopping easier. What will be eliminated from the store to accommodate this space?
Sansone: It will be at the expense of general merchandise categories. As you can imagine, magazines and books are not the fastest-growing categories in our stores. Also, we will still carry some seasonal items in our stores, but it will be a bit less than what we’ve had in the past. As we add these new businesses, we always look to optimize our store, and we’re looking at how we can use that space most efficiently.
DSN: Something new for CVS is the addition of audio and optical centers. Why did you want to enter that area?
Sansone: We’re a healthcare company, and the pharmacy is the heart of CVS. MinuteClinic is a health service that has been a tremendous success with consumers. The next health services we wanted to look to were optical and audio. We’ve been in a pilot with those, and we expect to have [these services] in 50 stores by the end of the year. They are important to peoples’ health. They are big businesses. Many people need glasses. With hearing, nearly two-thirds of customers with hearing problems don’t treat them. Part of [the problem] is access. We can provide access. We have stores everywhere, and we can create better access and hopefully value.
DSN: Let’s quickly switch to technology. Can you give us any updates regarding the CVS app?
Sansone: Today, our customer at CVS can get digital receipts, and we can send all of our ExtraCare offers to their card. They also can press one button to pay and have all the coupons handled in one easy step. In addition, you can actually pick up your prescription in an express way. So if you have a prescription to pick up, you don’t have to give your date of birth or other similar information. Digital technology is making everything easier.