CVS customizes data in a big way
Earlier this week at the IRI Summit in Florida, Judy Sansone, senior vice president merchandising at CVS, provided some excellent insights as to the priorities of using customer data. She emphasized that 30 percent of the company’s marketing spend is now being allocated to targeted marketing efforts and increasing each year, leveraging the world’s largest loyalty program that boasts 70 million active card holders. CVS’s formula for success seems rather simplistic in its approach:
- Understand the needs of the customer;
- Create solutions that support those needs;
- Ensure that the offers and messages work in concert (which she noted was the most difficult step of the four);
- Measure and refine, continuously.
In addition to mining customer data, CVS does extensive additional market research using traditional surveys, but also eye-tracking, shop-alongs, focus groups and virtual shopping sessions.
The combination of this comprehensive approach to the customer has enabled CVS to become very customized in its approach to stores, assortment and layout. The chain currently has over 80 store clusters and 8,500 different plan-o-grams all based upon its passionate use of customer data. While it still prints 45 million mass circulars each week, CVS knows its average shopper buys only eight of the over 300 items advertised. This knowledge has led the drugstore chain to launch "My Weekly Ad," a customized version, which can be accessed at CVS.com and through the CVS mobile app.
What is the most impressive aspect of CVS’s approach to crunching customer data? What lessons are there for other retailers?