Veteran exec plays leading role in drug chain's front-end transition

WOONSOCKET, R.I. — Over the course of the past decade, CVS Health has undergone profound changes, transforming itself from a traditional drug store operator into a health care innovation company. One constant throughout the process has been the rock-solid performance of the front-end retail business to which the company traces its origins. Health and beauty aids and other consumer products remain an essential pillar of CVS/pharmacy’s success, even as the handling of those categories has been reshaped to reflect the company’s broader mission.

“It’s important that we evolve our front store to represent CVS Health, since we are now really a health care company. Our retail stores are the face of the enterprise and really reflect the CVS Health brand for our customers,” says Judy Sansone, senior vice president of front-store business and loyalty and chief merchant at CVS/pharmacy.

Judy Sansone

For playing a leading role in guiding the ongoing front-end transition and empowering one of the most talented groups of merchants in retailing to meet the needs of CVS/pharmacy’s customers, Sansone has been named Chain Drug Review’s Merchant of the Year for 2015.

Sansone knows the business from the ground up. She started her career as a part-time cashier at a CVS drug store and worked up through the ranks, serving as a store manager, operations executive and vice president of merchandising, where at various times she oversaw over-the-counter health care; general merchandise, consumables and retail pricing; and retail innovation and store design. Sansone became a senior vice president and chief merchant in September 2011, and this year took on additional responsibility for the retailer’s loyalty program, customer personalization efforts and retail innovation.

“I’ve been lucky to work with great people throughout my career,” she recalls. “One of my first mentors was Cheryl Mahoney [who recently retired from CVS]. She taught me merchandising as a new buyer. As our very first female vice president at CVS, she was an ­inspiration.

“I also worked with a number of leaders in the field that helped my learning and development along the way. Jon Roberts [who at the time ran the drug chain’s Atlanta market and is now president of CVS/caremark] was one of them. Other major influences throughout my career have obviously been [CVS/pharmacy president] Helena [Foulkes] and Larry [Merlo, president and chief executive officer of CVS Health].”

Sansone now provides the same mentorship to the people who report to her, including George Coleman, Alex Perez-Tenessa, Mike McEnany and Cia Tucci, vice president of, respectively, consumer health care, beauty and personal care, consumables, and general merchandise and store brands.

“I’m surrounded by the best merchant team anywhere,” she says. “They are innovative, dedicated and passionate about delighting our customers. A big part of my job is to enable them to adjust to shifts in the market and do what’s right for the customers who shop our stores.”

The ability of Sansone and her colleagues to adapt is perhaps most dramatically illustrated in the wake of the company’s decision in February 2014 to exit the tobacco category. Implemented in September of that year, the bold move, which was coupled with the adoption of the CVS Health name, led to the loss of some $2 billion a year in front-end sales and the attendant customer traffic.

“The changes were certainly a turning point for us,” notes Sansone. “They helped to speed up the transformation of our part of the business to reflect the brand.

“One of the big changes in 2015 was to start to represent healthy food in a bigger way. We’re now highlighting healthy food, as well as beauty care, in places where they are immediately apparent as customers walk into the store. We’ve always done a great job in featuring O-T-C health care as shoppers walked toward the pharmacy. Now we’re giving healthy food and beauty the same type of treatment.”

The new orientation is embodied in a series of subtle but significant merchandizing innovations launched in the middle of last year. New offerings include more healthy food items, including such brands as Kashi, Cascadian Farms, Amy’s Kitchen, Annie’s Homegrown and CVS’ Gold Emblem Abound private label line; a broadened selection of O-T-C products; and an elevated beauty experience with more premium products and displays that give the department the look and feel of a specialty store.

“We’re thrilled with the results of the stores that we have reset with healthy food,” Sansone says. “The response there has been tremendous. The customers are embracing that product mix and, in fact, demanding more. So, you’ll see more change come from us as we continue to go along the path with healthy food.

“Beauty care is also growing in the stores that we’ve reset. Both healthy beauty — the products that have a direct connection to health — and fashion beauty, in particular eye and face products, are doing really well. In health care you see us focusing on self-care and proactive wellness.”

The ongoing project will bring about additional changes this year, among them efforts to make it easier for consumers to shop the O-T-C section and understand the wealth of options available to them. Sansone and her colleagues are striving to break down barriers between the front end and pharmacy.

“Everyone at CVS/pharmacy works as a team to meet the needs of the customer,” she explains. “We don’t make a distinction between front-end needs and pharmacy needs; there are only customer needs. So, we cooperate very closely with the folks in pharmacy.”

That approach extends to store level, where pharmacists frequently advise shoppers in the O-T-C section and other parts of the store that impact health. “Our pharmacists are out in front of the customer, and they take patient care very seriously,” Sansone says. “They do help customers all the time, every day in our stores. They help with O-T-C as well as prescription needs.”

Private label merchandise is another area where Sansone has made continuous improvement a high priority. Not only do store brands account for 21% of CVS/pharmacy’s sales, they are one important way the retailer forges its brand identity. The drug chain is in the midst of reinforcing that link with the product-by-product relaunch of its flagship private label line, which, like the company, is now known as CVS Health.

“Store brands are important to us and to our customers,” notes Sansone. “They are a way that we can deliver great convenience and value. And people recognize that. The brand is successful today, and customer loyalty is very strong.”

She adds that CVS’ brands are increasingly marked by true innovation. For example, the retailer was the first to offer bandages that contain Manuka honey, a natural healing agent; its wound care line consists of hospital-quality products; and the Gold Emblem Abound line of “better-for-you” snacks is free of artificial flavors, preservatives and trans fats.

Another way that Sansone and her team aim to enhance CVS/pharmacy’s front-end business is by staying on top of hot new products and emerging trends.

“There’s a constant stream of categories that are building,” she notes. “That’s especially true in health care. We’re really excited by categories like probiotics and the external pain relief categories. Women’s wellness is an exciting new area. A lot of the self-care and proactive wellness categories are really exciting. As customers become more engaged in their health care, there will be even more categories that are relevant to our merchandise mix.”

Sansone believes that, in an age when e-commerce presents consumers with an overwhelming number of product choices, retailers should help customers cut through the clutter. Armed with such powerful tools as the ExtraCare loyalty program, which has 70 million active card holders, and an increasingly sophisticated array of digital capabilities, CVS/pharmacy’s merchants are intent on knowing the customer and tailoring the assortment — both in-store and online — to meet his or her needs.

“We have a responsibility to edit the product mix and help guide consumers, whoever they are and whatever they might be looking for,” says Sansone. “There are a lot of products on the market, particularly in health care. As a health care company, we have to be certain that we’re carrying a credible mix of products that do what they’re supposed to do.”

CVS/pharmacy is delivering on that promise in an ever more individualized way. Sansone is leading the effort to tailor its ­offerings.
“ExtraCare has allowed us to know our customers better than most,” she says. “The information that we have about our customers has allowed us to provide relevance for them, and that relevance is creating loyalty.

“Today our customers are being provided information and offers in a way that is highly relevant to them in the channel that is most relevant to them. We’re able to provide an experience that is helping make their life easier.

“Over the 16 years of ExtraCare, we’ve done a lot of learning. We continue to learn, and we continue to improve. I expect to be driving continued work in this area, using the data to spur innovation in the stores and digital channels, to drive more growth through increased relevance.
“CVS’ purpose of helping customers on their path to better health gives me a charter … to find new ways to inspire the customer as a merchant. Our teams work on this each and every day, and I am thrilled to be working with them toward this mission at CVS Health.”