Sally Hansen partners with Avril Lavigne for new Salon Effects collection

BY Antoinette Alexander

NEW YORK — Coty’s Sally Hansen brand has teamed up with pop star Avril Lavigne to launch a limited-edition collection of edgy Salon Effects real nail polish strips designs.

The new Avril Lavigne Salon Effects real nail polish strips are inspired by the pop star’s signature energetic, no-frills attitude and straight-talking lyrics.

“I was so excited to collaborate with Sally Hansen on Salon Effects real nail polish strips,” Lavigne said. “I always say that you need to be able to express yourself and these nail polish strips deliver the ultimate form of self-expression. Their unique, bold designs offer long lasting results and are unlike anything else on the market. They totally rock!”

The collection is comprised of 12 limited-edition patterns from skull-and-bones to funky leopard print. One of Lavigne’s favorite designs: You’re A Star (pictured).

The collection is slated to hit retail shelves in April and will be priced at $9.99 each.


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10 Keys: CVS Caremark looks to unlock full potential, reinvent Rx

BY Antoinette Alexander

CVS Caremark is reinventing pharmacy and unlocking the full potential of its distinctive model. The company is doing this by capitalizing on what Larry Merlo, president and CEO, has referred to as “integration sweet spots,” which are capabilities unique to CVS Caremark’s integrated model. In this issue of DSN, we explore what we believe are 10 keys to driving growth across CVS’ network and transforming the retail health landscape.

1. ExtraCare unlocks promotion profitability
Despite its 14-year history and 69 million active households, the ExtraCare loyalty program has yet to reach its full potential. CVS’ top customers spend 43% of their health and beauty spending with CVS, meaning that they spend 57% elsewhere. In beauty, they spend 27% of their wallet with CVS and 73% of their wallet elsewhere. This upside represents a $1.5 billion — yes, billion — opportunity in beauty alone. Enter CVS’ Beauty Club, which currently boasts about 10 million members. CVS also is piloting a healthy rewards program in 2012 to provide added incentives and encourage even greater pharmacy loyalty. If successful, the pilot will roll out nationally in 2013.

2. Store clustering reveals power of ‘My CVS’
One size does not fit all in retail. Every store has its own customer profile, so CVS is opening the door to greater sales and a more personalized shopping experience via a store clustering approach. Starting in 2009, the 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% lift in trips. The urban cluster has expanded grocery, fresh on-the-go foods and self-service checkouts. This overhaul has resulted in an 8% increase in sales and 9% increase in profits. By the first half of 2012, CVS expects to have 450 urban clusters. In 2012, additional store clusters will be tested, including segmenting the stores to income, a Hispanic prototype and locations with strong pharmacy and beauty businesses.

3. Store brands key to driving sales
Store brands have been — and continue to be — a big deal for CVS. Over the past four years, store brands have represented 17.5% of sales and 32% of front-store growth. While impressive, CVS remains committed to having store brands represent 20% of sales. This will mean that CVS will need to create new brands that further differentiate it from rivals.

The good news is that CVS is well on its way, as evidenced by the recent Nuance Salma Hayek launch in beauty. Mark Cosby, EVP of CVS Caremark and president of CVS/pharmacy, said “50% of the Nuance customers are new to CVS beauty.”

4. Digital capabilities personalize experience
Taking a multipronged approach, the company will enhance its digital capabilities. Based on past front-store spending habits, CVS will personalize the messaging to its ExtraCare members with email offers and an online dashboard that members can log onto to see their reward status, pharmacy status and personalized offers. CVS also will develop the Endless Aisle, where shoppers can buy products online that CVS does not offer in its stores. CVS’ mobile plan includes a mobile wallet pilot, real-time inventory checking capability for stores, a drug interaction checker and a personalized circular.

5. Improved access, care to grow pharmacy
CVS has set its sights on growing its pharmacy business through improved customer service, greater access and patient care improvements. CVS is taking its service to new heights with its My Customer Service program. The program, which encourages associates to proactively reach out to its customers, is being piloted in 2012, in advance of a national rollout in 2013. Meanwhile, greater access will help fuel sales. CVS has an eye on consistently adding 2% to 3% square footage growth, and a focus on filling in existing top markets and entering new markets.

To battle nonadherence, CVS has several patient care programs in place that are a true differentiator.

6. MinuteClinic seizes ‘integration sweet spots’
Looking ahead, MinuteClinic, which has more than 650 locations, is working to further expand its scope of services and collaborate with Caremark to leverage “integration sweet spots.” The importance of nonacute services will continue to rise as patients battle chronic diseases and struggle with a shortage of primary care physicians.

In fact, the company expects nonacute visits and nonflu vaccinations to reach 25% of its services over the next five years.
It also is collaborating with Caremark to provide access to both acute and chronic care for Caremark members, offering clients an opportunity to change their benefit structure to reduce and, in some cases, completely eliminate co-pays at MinuteClinic.

7. Opportunities abound for specialty
Specialty pharmacy, a segment made up of complex medications to treat such serious diseases as cancer, rapidly is becoming a major contributor to top- and bottom-line growth, and CVS Caremark has set its sights on further advancing this business.

Specialty pharmacy is expected to be a $15 billion business for CVS Caremark, growing at 17.3% annually over the past two years as it has added PBM lives and the category itself has grown. What sets CVS Caremark apart in the specialty pharmacy space is that it can leverage its integrated assets — retail pharmacies and MinuteClinic — to improve its value proposition. And that’s exactly what the retailer is doing.

8. Medicare, Medicaid open door to Rx
One of the most profound changes in the industry is the growing importance of Medicare and Medicaid as payers for prescription drugs. By 2020, Medicare and Medicaid potentially could account for two-thirds of all prescriptions, and CVS Caremark is focused on building a leadership position in the segment.

“The [Universal American] acquisition, which made Caremark the second-largest PBM for Part D plans, positions it well in a market growing at an estimated CAGR of 8.5% (from 2010-2020),” stated Barclays Capital analyst Meredith Adler in a research note.

Medicaid, which is growing at a 16% CAGR through 2015, also represents a major growth opportunity for the company.

9. Maintenance Choice 2.0 sets sights on integrated capability
Maintenance Choice is the company’s integrated product that was broadly introduced in 2010. It extends the mail-order benefit for Caremark members that participate in qualifying plans, enabling them to pick up their maintenance medications at any CVS retail pharmacy with no increase in co-pay or payer pricing. Enter the product’s next generation: Maintenance Choice 2.0.

“As we introduce these enhancements, the runway for program adoption among our current clients represents [more than] 30 million members in total, and we expect to dramatically accelerate adoption among these clients as we head into 2013 and beyond,” Per Lofberg, EVP of CVS Caremark and president of Caremark Pharmacy Services, told analysts during the company’s 2011 analyst day in late December 2011.

10. Pharmacy Advisor 3.0 looks to make an impact
The Pharmacy Advisor program, intermixing retail and PBM, is a powerful approach to pharmacy care. This condition-based program currently is focused on diabetes, but expansion plans are well under way.

In 2012, CVS Caremark plans to roll out the program to several cardiovascular conditions. With Pharmacy Advisor 3.0, the company is building a clinical program for multiple chronic conditions. It will expand Pharmacy Advisor to include face-to-face consultations for patients with hyperlipidemia, hypertension, coronary artery disease and congestive heart failure by the end of second quarter 2012; for patients with asthma/COPD, depression, cancer and osteoporosis by the end of 2012; and for patients with GI disorders, rheumatoid arthritis, multiple sclerosis and chronic kidney disease by the end of 2013.


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Lawrence Benjamin named SymphonyIRI chairman

BY Michael Johnsen

CHICAGO — SymphonyIRI Group on Thursday identified the executives sitting on its new board of directors, including the naming of Lawrence Benjamin as chairman.

A 25-year veteran, Benjamin most recently held several executive positions at Royal Ahold, including CEO of U.S. foodservice, COO of Ahold’s U.S. retail businesses, EVP and a seat on the company’s global board. Previously, he was CEO for NutraSweet and president of the frozen meals division of Kraft. Benjamin currently is a senior adviser at New Mountain Capital.

“This new board brings unparalleled experience and expertise in the consumer packaged goods, retail and technology industries,” prefaced John Freeland, SymphonyIRI president and CEO. “They offer a depth of understanding and rich knowledge about our industry, our clients and our technology that will significantly accelerate our innovation and growth initiatives.”

Joining Benjamin and Freeland on the board of directors are:

  • Jeffrey Ansell, president and CEO of Sun Products;

  • Raj Gupta, senior adviser for New Mountain Capital;

  • Lawrence Jackson, senior adviser for New Mountain Capital;

  • Don McGeorge, retired president and COO of Kroger;

  • Romesh Wadhwani, founder, chairman and CEO of Symphony Technology Group.;

  • Steven Klinsky, managing director, founder and CEO of New Mountain Capital;

  • Mathew Lori, managing director of New Mountain Capital; and

  • Matt Ebbel, director of New Mountain Capital. 

New Mountain Capital, a New York-based private equity firm that currently manages private and public equity investments totaling approximately $9 billion, became the majority shareholder of SymphonyIRI Group on June 1, 2011. The firm seeks out what it believes to be the highest-quality “defensive growth” leaders in carefully selected industry sectors and then works intensively with management to build the value of these companies, the company stated.

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