CVS Pharmacy opens audio and optical centers
NEW YORK — CVS Pharmacy has entered a new arena by adding audio and optical services to its list of in-store offerings. The retailer has opened seven hearing and five optical centers store-within-stores in the Baltimore-Washington, D.C. area, with plans to expand to 50 locations by the end of 2017, Morgan Diaz, senior director, health services division at CVS Health, told Drug Store News.
“This is really exciting,” Diaz (pictured) told DSN. “And this will be [included] with our new store format as well.”
Diaz added audio and optical services will not carry a large store footprint, with square footage akin to its MinuteClinics. These centers are housed adjacent to pharmacies.
“It really allows us to have a nice health quadrant in the back of the store,” she said. “It’s really nice as part of our commitment to care.”
As for the reasoning behind audio centers, Diaz pointed out that 48 million Americans suffer from hearing loss, with 30 million of these people under the age of 65. However, only 20% do something to alleviate the problem. “We really wanted to ask those people how can we help and how can we differentiate in the space,” she said. “We learned that they were looking for two things: access and price.”
CVS has audiologists in-store at its audio centers five days a week that conduct a complete hearing loss assessment to understand the patient’s needs and then help them with their needs to regain sound, such as hearing aids, Diaz explained. She added that hearing loss is not simply a condition, but also affects quality of life.
“We’ve seen people who have [hearing] loss often suffer from a quality-of-life decline, which can be both physical and mental,” she said, adding hearing loss can come from a person’s vocation, in addition to more known problems, such as blasting music for long periods of time.
She added that audiology technology has become advanced, with a variety of solutions now performed via Bluetooth. For example, “as you walk into different rooms, we can program the hearing aid so it automatically adjusts to the noise setting to help amplify the sound for you in the room you’re in. And this technology is available at an affordable price point compared to other options out there,” noted Diaz.
Zeroing in on optical, approximately three-quarters of Americans have some sort of vision correction need, which presents a huge marketplace, Diaz told DSN. She acknowledged there are many places for people to take care of their eye care needs, so CVS made sure to stand out from the competition.
“We looked at how we can help and how we can differentiate ourselves in this industry,” she said. “We spent a lot of time with patients, and they asked us for a few things. One was access. ‘I really want to see my doctor at the time of day and day of the week I really need them,’ was a big thing we heard. Whether they have something in their eye, they have an emergency or just a routine eye check, they were having trouble seeing an eye doctor, with some waiting as much as 30 days to six months. We really wanted to make it convenient and just let people walk in. We have eye doctor coverage five days a week [at our optical centers].”
Diaz continued CVS has a total eye health solution that’s digital, explaining the eyes are a “gateway to your overall health.” “You can look into someone’s eyes and see the onset of diabetes, high blood pressure and high cholesterol. We build a comprehensive health solution through digital equipment that helps create a more precise prescription at the end.”
Of course, eye wear is another service the optical center provides, with 600 different frames available throughout the store.
Audio and optical centers are one element of CVS’ “next evolution of the customer experience,” the company presented on April 19 in New York City. To read more about the other changes CVS is making throughout the front store, click here.
IRI, BCG identify 5 trends for winning in CPG
IRI and the Boston Consulting Group identified five trends exploited by the consumer packaged goods winners in their latest growth leaders report. According to the report, the best CPG companies successfully merged health and wellness with convenience, benefitted from the tailwinds driving growth across the convenience channel, capitalized on mergers and acquisitions to accelerate growth, tapped into ethnic flavor trends and leveraged their social media outreach.
Merging heath and wellness with convenience
The collective consumer focus on health and wellness has become more intense, observed IRI and BCG, driven by baby boomers and their quest to live “long and well.” For example, products making a non-GMO claim generated $4 billion in sales in 2016, representing a 64.3% lift in sales as compared with the year-ago period.
Convenience channel tailwinds
In 2016, the convenience channel accounted for more than 37% of total CPG growth. Convenience store dollars were up by 2.8%, while overall industry sales were up by 1.4%. Indulgent categories, including tobacco, alcohol, candy and sodas, were the winners in this category, as opposed to the health-and-wellness trend drivers.
Realizing growth through M&A
Since 2011, larger CPG players have lost more than $20 billion in sales to their smaller competitors. So if you can’t beat them, buy them. According to the report, both large and midsize companies are actively pursuing mergers and acquisitions in an effort to create sales growth.
Democratization of global flavors
Both Latin and Asian food trends have become pervasive, with higher regional specificity, as consumers’ palates become more adventurous, the report noted. For example, Frito-Lay launched its Passport to Flavor line in the summer of 2016, which includes such potato chip flavors as Brazilian Picanha, Chinese Szechuan Chicken and Greek Tzatziki.
Social media omnipresence
Social media is helping growth leaders expand the appeal of their collective brands beyond product attributes to make an emotional connection with the end consumer. For example, L’Oréal evolved its tagline “because you’re worth it” to #WorthSaying to create an interactive dialogue with their consumers around the topics that matter to them the most.
Gathering, managing competitive intelligence: Q&A with Competitive Promotion Report SVP Scott Hanslip
We have all heard the expression “knowledge is power.” Conversely, it also is true that what you don’t know can hurt you. The good news is that it’s not hard to find out what your rivals are up to and outpace them if you can connect with the right sources and utilize proven solutions. Fact-based competitive intelligence can drive a brand’s strategy and allow marketers to make real-time adjustments that provide a competitive advantage in the marketplace. Before NACDS Annual Meeting, Drug Store News sat down with Scott Hanslip, SVP at Competitive Promotion Report, to get a better understanding of how health, beauty and wellness manufacturers can tap into unique and proprietary competitive intelligence to help drive the business.
Drug Store News: How do companies today track competitive intelligence?
Scott Hanslip: Tracking and gathering competitive intelligence remains in the stone age as companies react to competitive threats, new products, package and ingredient changes, and, of course, published list price increases and decreases. Marketers and sales organizations continue to chase down products already in the market and then — hopefully — respond to them during category reviews if given the opportunity to meet with the customer.
Manufacturers run to retail, gather new products and share [them with] their internal teams before reacting. None of these steps are really needed given the benchmarking and tracking services available to manufacturers today. With [more than] 60 different health, beauty and wellness categories to track and monitor, CPR offers their clients more than 10 years of list price history, and provides actionable strategic pricing insights and trends that can support the need or rationale for item list price changes and/or help establish list pricing for new items. The trends often are predictive both in terms of timing and rate of change.
An analysis of the CPR database shows there were approximately 7,200 list price changes during the past 12 months. This represented 5,800 list price increases and 1,400 list price decreases. List price increases averaged 4.6% while the decreases averaged 15.9%.
DSN: How does CPR gather this set of pricing information?
Hanslip: CPR has been tracking and monitoring published list pricing and list price changes and general trade allowances for the past 28 years. The database is structured to benchmark [more than] 60 different categories and [more than] 60,000 UPCs. The general data feed comes from an extensive network of wholesalers and retailers in food, drug and mass, excluding Walmart, club and dollar stores for obvious reasons. It is a total U.S. database and includes both national brands and private label.
HBW manufacturers should be aware that many of the leading brands already are using CPR’s services to benchmark price and track their competitors’ list price changes. CPR also provides many clients with retail price, retail-price changes and also can use our list price with our retail price to provide them with retail margin information across food, drug, mass and independent channels. Separately, using POS data — Nielsen or IRI — with CPR trade pricing and promotions data allows CPR to provide our clients with customer-level margin and optimization insights, such as trade spending analysis, brand profitability comparison analysis, portfolio optimization and much more. These insights provide our clients with a unique financial perspective of the business, and allow them to engage with the retailer on a different level.
DSN: With the healthcare industry moving closer to a margin/productivity metric in terms of performance, what role could CPR play in this transition? What’s the bottom line?
Hanslip: The greatest challenge for manufacturers today is seeing beyond their own portfolio. Today you can no longer afford to just know what margin dollars you are producing for the customer. Manufacturers had better quickly understand the entire competitive landscape before making a recommendation on assortment decisions just based on unit turns or top-line dollars. It’s about making ‘real profit dollars’ for your customer. Balancing the role of private label and core national brands also is critical to ensure pricing is not eroding margins and/or price gaps are too wide or too narrow, negatively impacting customer ROI.