With Grant Pill assuming new responsibilities at CVS, 2011 shapes up to be big year for company
WHAT IT MEANS AND WHY IT’S IMPORTANT — The year 2011 has shaped up to be quite the year for CVS Caremark, with Larry Merlo taking the helm following the retirement of Tom Ryan, longtime CVS/pharmacy executive Mike Bloom resigning and Judy Sansone assuming responsibility for the merchandising organization at CVS/pharmacy. Well, the year isn’t over yet, and Grant Pill — who is regarded as a bright, young merchant — now has responsibility for one of the most critical areas of CVS’ business.
(THE NEWS: CVS Caremark’s Jim Trappani steps down. For the full story, click here)
Pill has taken on the role of VP merchandising for OTC healthcare and store brands. In light of Pill’s new responsibilities, industry members can expect to see some innovation out of this group.
Meanwhile, Jim Trappani, VP merchandising for health care and multicultural, has decided to step down, and there’s been no official announcement as of yet as to where Trappani will land next. Could he land at a major dollar store chain like many other drug executives?
In recent years, there’s been an influx of drug executives flocking to the dollar store channel. It’s only been about a month since Bloom — Trappani’s former boss at CVS — left CVS to take the president and COO position at Family Dollar Stores. Meanwhile, several industry veterans have landed at Dollar General, such as Rick Dreiling, who serves as chairman and CEO, and former Longs Drug Store executives Todd Vasos and John Flanigan. Given the trend, it wouldn¹t be unimaginable for Trappani to follow suit, but for now, the industry will have to wait and see.
Paper cards retain value in digital age
Texting and social media have not killed the traditional greeting card business. “Facebook has caused most people to acknowledge more birthdays than ever before, but they aren’t sending fewer cards as a result,” said Susan January, president of the Greeting Card Association and VP of Leanin’ Tree Cards.
“The actual paper card still holds significant emotional value — especially for highly personal, emotional card-sending occasions, such as condolences/sympathy, weddings, new babies and milestone birthdays and anniversaries,” January said. In fact, industry statistics show that 90% of U.S. households purchase at least one card a year.
Enhancements, such as chips that allow cards to play a song or record a message, continue to provide freshness to the category. Yet while sales of greeting cards in drug stores are projected to be steady for the next few years, rising postal costs and manufacturing costs are forcing suppliers to find ways to keep a lid on retail pricing.
Suzanne Haines, VP marketing for Designer Greetings, said the company’s 50%-off program “can transform under-performing full-price greeting card departments into high-traffic departments.” “Stores that need a major point of differentiation have used the program to drive traffic and create a card department destination,” she said. “The strategy increases traffic and category sales while reducing on-hand inventory dollars.” Designer Greetings also offers a double-value program, which allows retailers to price higher-end cards between 99 cents and $1.99.
Manufacturers are quick to point out that the category can’t exist solely on value-priced merchandise. “Lowest price is not necessarily the only thing people value when shopping for products that help nurture their relationships,” said Sabrina Wiewel, Hallmark’s general manager for the drug channel.
Dave Phipps, a spokesman for Avanti Press, said the company has been driving higher profits with premium collections priced at $3.99. The average price point of Avanti cards is $2.99.
The company’s Motion line, which features lenticular 3-D effects, and its Standouts line, featuring dimensional photographic interiors, have been very successful.
The article above is part of the DSN Category Review Series. For the complete Greeting Cards Buy-In Report, click here.
Study: Mobile technology offers in-store opportunity
NEW YORK — While advances in smartphones and social media use have lead many consumers to shop online, those same technologies are being utilized by retailers to get customers back into the stores. New shopping apps, mobile technologies and social media rewards are moving buying decisions back into the stores, according to WSL/Strategic Retail’s second annual "Buzz to Buy 2.0" trend report.
According to the report, approximately half of all smartphone owners use their devicse while shopping in-store. More than half of those who use mobile for shopping are comparing prices (56%), taking pictures of products (53%), and finding coupons and discounts (46%).
Shopping apps are growing in popularity, and according to WSL/Strategic Retail, 35% of those surveyed are using them to receive in-store alerts to deals and sales (35%), reading QR codes or bar codes for product information (33%) and helping to navigate the store (28%).
"For the first time in many years, retailers are getting ahead of the trend — and the shopper, by introducing new mobile apps that create fun, entertaining and promotion-driven experiences at the malls and in the stores," WSL/Strategic Retail CEO Wendy Liebmann said. "By using mobile technology to access flash offers, search best deals and earn rewards, shoppers are, once again, able to make purchase decisions in-store, rather than online at home."
WSL/Strategic Retail conducted an Internet survey from Sept. 8 to 12. The survey included 1,702 respondents recruited from an online panel of shoppers who were at least 15 years old. All participants are active Internet users — they have done at least one online shopping or social networking activity within the past month.