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CVS and Walgreens Compete for Mobile Shoppers

December 9, 2011

CVS is the latest chain to offer consumers the option of ordering products via mobile devices. The chain took the move, as a company press release points out, because of the rapidly increasing number of consumers going online via mobile browsers.

The drugstore chain has made the entire catalog on CVS.com available through the mobile optimized site at m.cvs.com. In addition to placing orders for products, consumers may also place photo print orders.

"Our new mobile shopping site offers digitally-minded CVS/pharmacy shoppers with a superior on-the-go retail shopping experience," said Rob Price, senior vice president, chief marketing officer for CVS/pharmacy, in a press release. "The launch of mobile shopping is another exciting step in our ongoing effort to expand our digital suite in order to better serve all of our customers — whether they are refilling prescriptions via camera phone or shopping for holiday gifts from their smartphone."

The chain said its new "mobile enhancements" build on previous steps it has taken that enable consumers to check the weekly circular, manage their ExtraCare Reward accounts and scan/send refill prescriptions.

CVS' move follows Walgreens' announcement last month that it had added scanable coupons to its mobile offering. With it, consumers can redeem coupons in stores through their smartphones.

"We're enhancing the shopping experience by giving our mobile customers greater convenience and exclusive savings during the holiday season," said Sona Chawla, Walgreens president of E-commerce, in a press release. "Through our mobile application, no matter where people are, they can find an easy way to save next time they come to Walgreens — just download the app and you're ready to shop."

Walgreens also enables consumers to shop directly via their smartphones, check in-store stock, view weekly ads and receive special deals.

FINANCIALS:     [NYSE:CVS] [NYSE:WAG]

Discussion Questions:

Discussion Questions: What do you see as the biggest mobile shopping and marketing opportunities for drugstore chains? What is your assessment of the steps that CVS and Walgreens have taken?

While we value unfettered opinion, we urge you to show respect and courtesy for people or companies about whom you comment. Keep in mind that this is a public, professional business discussion. RetailWire reserves the right to edit or refuse the publication of remarks that we deem unsuitable. We may also correct for unintended spelling and grammatical errors.

Instant Poll:

How significant a business opportunity is the mobile channel for drugstore chains?

Comments:

Integrating prescriptions into mobile commerce provides consumers with additional reasons to go to the pharmacy website. As the sites improve their cross-sell marketing capabilities, the attachment rate will increase and overall m-commerce sales will grow.

In addition, pharmacies wish for more consumers to read, and be motivated, by their circulars. When consumers are coming to the m-site regularly, they have more opportunities to engage with the digital version of the circular, which is designed to drive incremental impulse and stock-up purchases.

Net, net, the biggest opportunities are all driven by frequency. Consumers who are engaged with the pharmacy brand at more touch points are more likely to be loyal, and capturing share of wallet is the end result.

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Mark Price, Managing Partner, LiftPoint Consulting, Inc.

The anchor features for these apps seems to be prescription management. Much like the physical stores, prescriptions bring in the customers and the retailer tries to capitalize on the customer connection with shopping for everyday items, photo services, and increasingly health care services.

One thing that both CVS and Walgreens seem to be doing right is making a mobile-optimized website a priority, rather than only publishing a native smartphone app. This brings down the barrier to engagement. There are some things the apps are best at (scanning, photo management), but a lot of the basics can be done in the mobile website format.

It will be telling to see how much traction they get with the scannable coupons. The big opportunity there is generating awareness for these deals. If they can reach out to shoppers pre-store and in-store with messaging and a strong value proposition, I expect the uptake will be significant.

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Matt Schmitt, President, Chief Strategy & Innovation Officer, Reflect

I think chain drug is finding itself in the same position supermarkets were in earlier this century...so many others encroaching into its space. The solution is many-faceted (adding food, more private label, etc). Mobile shopping and mobile coupons (please CVS, get rid of those absurd receipts) are also facets in that strategy.

Smart move.

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Paula Rosenblum, Managing Partner, RSR Research

From the reports I've seen, the actual number of people using mobile sites/apps to do their shopping is mixed. A lot of the time, from what I've read, it appears that people are using mobile web/app to view products, maybe compare prices, but they're not actually making purchases on their phone. At least not yet. But, no matter what you read, people are visiting retailers web site their mobile device or using their app. So, as I see it, the strategy should be exactly like what CVS is doing; getting coupons, viewing weekly ads and, most importantly, managing their ExtraCare Rewards card. So not necessarily using the mobile site/app to get people to do their shopping (although certainly allowing that option) but using it to drive traffic to the stores. At this early stage I think that's a good use for mobile technology; as another means to drive traffic to stores.

In terms of drugstores, I think the option to refill prescriptions via the mobile app is the obvious first step. Making processes such as that even easier for your customer goes a long way. People use their phones for everything now a day so by creating something such as a mobile app that allows them to take care of their shopping or refill their prescription in a convenient manner goes a long way in gaining their loyalty. I can't wait to see what else CVS does with this and how mobile shopping evolves as more and more retailers get involved.

'ChrisCatMan'

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