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Immunization offerings expand past flu, shingles

BY Alaric DeArment

While much of the focus on pharmacist-administered vaccinations has been on influenza and shingles, there also have been efforts to significantly expand the number of diseases against which customers at the local pharmacy can get protection.


Last month, warehouse retailer Sam’s Club announced that it would offer 10 immunizations at its 552 pharmacies for cold and flu season. In partnership with Mollen Immunization Clinics, it’s also offering an expanded menu of immunizations by registered nurses through Nov. 15. The immunizations include flu, pneumonia, chickenpox, shingles, Tdap, human papillomavirus, MMR, meningitis and hepatitis A and B. Around the same time, Miami-based regional retail pharmacy chain Navarro Discount Pharmacy announced it would expand its selection of available vaccines to include shingles and pneumonia at all of its stores.


Another opportunity that exists for pharmacy retailers is specialization in areas like travel vaccinations, such as those for hepatitis A and B. Seattle-based regional chain Bartell Drugs has offered comprehensive travel clinics at several of its stores for a while now, and other retailers are doing the same. 


In August, an education session at the National Association of Chain Drug Stores’ Pharmacy and Technology Conference in Denver presented some of the opportunities and challenges involved in travel medicine. Travel medicine requires expertise on a number of subjects, such as patient education, immunization and pharmacology. “These are things pharmacists are already very skilled at or can easily become skilled at,” the session’s presenter, University of Southern California pharmacy professor Jeff Goad, said. Vaccines, he added, are only part of it.


Pharmacy retailers looking to get involved with travel medicine also should consider carrying products travelers would need, particularly if they’re going to developing countries. These include water purification tablets, mosquito nets and insect repellents. In addition, pharmacists consulting prospective travelers should know ways to deal with such noninfectious conditions as jet lag and altitude sickness.


Travel medicine requires some investment on the retailer’s part, such as setting aside an area to provide services, necessary education for the pharmacist and stocking up on travel-related products, Goad said, as well as collaborative practice agreements with physicians that may be needed for certain vaccinations and medications, travel medicine software, and in many states, a special stamp that certifies a pharmacy for delivering yellow fever vaccinations.

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In-store, online benefits target cardholders

BY Antoinette Alexander

While CVS/pharmacy’s store clustering initiatives and store brands are fueling front-store profitability, there’s no doubt that its successful, long-standing ExtraCare loyalty program remains a key driver of front-store sales, and it arms the company with a powerful competitive advantage, especially as CVS looks to take the program to new heights. 


“Our ExtraCare loyalty program continues to be a key differentiator; and now with more than 15 years of history, today we have roughly 70 million active cardholders. And our vast wealth of experience enables us to continue to develop both new and better ways to enhance the offering for our customers,” Larry Merlo, CVS Caremark president and CEO, said during its second-quarter conference call. 


In a major nod to the program’s success, 67% of CVS’ transactions and 82% of its front-store sales go through the ExtraCare program. Plus, research has shown that card members buy 85% more items per trip compared with other customers. 


The ExtraCare loyalty program also is enabling CVS to address the newspaper challenge, which has negatively impacted the circulation of its circulars. While the retailer plans to still promote via its circulars, it will reduce pages over time to fund its digital promotions and is piloting in 2012 a personalized circular. As previously reported by Drug Store News, the personalized circular will enable CVS to target its ExtraCare users, via email or via its website, with offers specific to their needs based on their front-store purchasing history.


The retailer also is working to capture a greater share of the shopper’s wallet — especially within health and beauty. This has given rise to the January 2011 launch of the first-ever beauty club program for the retail pharmacy channel. 


The Beauty Club provides ExtraCare cardholders who register their cards with additional rewards on beauty purchases and other beauty-specific benefits. The Beauty Club currently has 13 million members.


As reported, the company also is piloting a healthy rewards program to provide added incentives and encourage even greater pharmacy loyalty. If successful, the pilot will roll out nationally in 2013. 


It’s a digital world


Leveraging the deep understanding of its customer base via insights gained through its ExtraCare loyalty program, CVS/pharmacy officially unveiled in June a new personalized digital experience on CVS.com, which features extensive health information and resources in addition to customized deals and savings information. The site also features a hub for 
ExtraCare members to help them manage their savings and deals.


“The beauty of digital is that the technology is now catching up with what it is that we want to create for our customers. The technology can support giving them the level of service, even when they are not at the store, to make them healthier, to enhance their ability to save money; and for us, what is so exciting is that now the technology is becoming so adaptable that we can really unleash our imagination to solve customers’ problems in ways that previously we’ve only dreamed about,” Rob Price, SVP and chief marketing officer for CVS/pharmacy, told DSN in an interview to announce the launch.


The company also is putting considerable energy into developing mobile offerings. For example, pharmacy patients can enroll for text message notifications for prescription pickup, and smartphone users can now use the expanded CVS Mobile App to print photos directly from their smartphone camera or their CVSphoto.com account for same-day pickup.


In addition to printing photos from smartphones, shoppers using the CVS mobile app also can digitally store ExtraCare card information in their smartphones, manage and refill prescriptions and view prescription history, and access full mCommerce shopping.

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Store clusters, brands help front-store business

BY Antoinette Alexander

CVS Caremark’s front-store business continues to experience solid performance despite a weak economy — success that can be credited to such factors as a skilled merchandising team, a focus on store brands and a clustering initiative that tailors stores’ merchandise mix based on how the stores are shopped in certain locations.


“The latest data shows that CVS has gained front-store share versus last year when compared to drug store and multi-outlet competitors. Our market share growth in the second quarter was 123 basis points and 18 basis points, respectively,” Larry Merlo, CVS Caremark president and CEO, told analysts during the company’s recent second-
quarter conference call. 


As mentioned, one way in which the company is striving to better meet shoppers’ needs is through its store clustering initiative. 


“The reality is that one size does not fit all in retail these days. Every store has its own customer profile, and we can drive sales by better meeting customer needs,” Mark Cosby, EVP of CVS Caremark and president of CVS/pharmacy, told analysts during Analyst Day in 
late December. 


CVS’ initial foray into My CVS began in 2009 as it varied assortments based on trip-based segmentation and rolled out two different clusters: the food convenience cluster and Urban Cluster.


Starting in 2009, its food convenience cluster — which doubles the amount of space dedicated to consumables — rolled out to 4,000 stores over the course of nine months. The result: a 12% increase in trips.


Meanwhile, the Urban Cluster has been “a big win” for the retailer and has demonstrated the power of My CVS in store clustering.


“The Urban Cluster can viewed as the general store where we implemented this cluster in stores with limited food competition. The cluster focuses on expanded grocery, the addition of fresh on-the-go foods, and we have implemented self-serve checkout units,” Cosby said. The results: an 8% boost in sales and 9% increase in profits.


By year-end 2011, 420 Urban Cluster stores were completed, and the retailer remains on track to complete 50 new urban cluster locations this year.


Now, the retailer is looking beyond trip-based segmentation and is testing several 
demographic-based and volume-
based approaches.


“The company is looking at developing a unique selection for stores in low-income markets, as well as those with a large Hispanic customer base; other clusters are likely, but no specifics were provided,” stated Barclays Capital analyst Meredith Adler in a research note.


Company spokesperson Mike DeAngelis acknowledged that CVS/pharmacy has several other cluster concepts in development, but said the company is not yet prepared to comment, as it plans to begin introducing the concepts beginning in 2013.


Private brands, which provide higher margins, also are a major focus and a driver of front-store business for CVS/pharmacy. They currently account for about 17% of front-store sales, and it is estimated that they can reach 20% of sales over the next few years as the company makes efforts to bring the penetration in food and cosmetics closer to where it is in OTC and other healthcare items.

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