As many retailers struggle with unwieldy loyalty programs and the resulting mountains of data they create, CVS Caremark is working hard to create a best-in-class loyalty program that merges the latest technology with consumer insights.
Headquartered in Woonsocket, R.I., CVS Caremark operates 68,000 retail pharmacies and employs 200,000 "colleagues" across 45 states. CVS/pharmacy loyalty program, ExtraCare, enjoys the participation of more than 70 million active member households, according to the company.
This fall, the retailer launched My Weekly Ad, a personalized digital circular that taps into insights gleaned from existing ExtraCare loyalty data. The My Weekly Ad program creates a unique weekly digital circular tailored according to past activity for each individual customer.
"Our ExtraCare loyalty card continues to enable us to personalize our offers, creating more value for customers and gaining a bigger share of their wallet," CVS Caremark President and CEO Larry Menlo said during the retailer's third quarter earnings call in November.
A smart move, considering that 75 percent of U.S. consumers prefer that retailers use personal information to enhance their shopping experience, according to research conducted by Instant.ly on behalf of technology firm Synqera.
The data-driven loyalty program, including the new digital circular, has been particularly useful in driving front-of-store sales, which many experts consider critical to the future success of retail pharmacies.
"I'd say we continue to use our loyalty card program to drive performance for us and to make sure that there's a good balance between what's happening from a front-store sales perspective, but also quite frankly what's happening from a margin perspective," explains David Denton, CVS Caremark executive vice president and chief financial officer. "And we've been consistently growing our front- store margin rate."