He has been integral to CVS' reputation for optimizing health.
WOONSOCKET, R.I. — For CVS Pharmacy, being a convenient health and wellness destination has meant resilience during the pandemic, says George Coleman, senior vice president of merchandising at CVS Health.
For being integral to cementing CVS Health’s reputation for optimizing health and wellness and for helping keep the business strong in 2020, Coleman has been named Chain Drug Review’s 2020 Merchant of the Year.
“That reputation has actually been enhanced by COVID — despite the disruption,” he says.
Store traffic has come back since the initial lockdown period, he notes, as people return to more normal behaviors. There is a “consolidation of shopping trips,” because consumers don’t want to have to visit too many places. But CVS has remained an important resource for everyday health needs. Staying open during the spring lockdown was “a real achievement, which took a lot of work from a lot of people up and down our entire enterprise,” he notes. CVS encourages customers to follow social distancing guidelines and adhere to safety measures while shopping in stores to ensure colleague and customer safety, and continues to offer a variety of products in stores and online that meet customers’ unique needs during the pandemic, including vitamins, immunity support supplements, hand sanitizer, face masks and more.
CVS has also opened more than 4,100 COVID-19 test sites. “For several years we’ve been undertaking this transformation into a health care company,” Coleman comments. “And to be honest with you, I don’t know if everyone understood what that meant. Now people are starting to get it and see what it means to be an accessible, affordable local retail health center. They see that we can do these sorts of things that are frankly addressing critical needs and helping to keep society functioning. We have conducted more than 6 million COVID tests, which accounts for 70% of the testing being done in a retail setting nationwide. And you’re going to see that roll right into a vaccination capability. We’re planning to administer more than 20 million vaccinations this season and are ready to hit the ground running with COVID-19 vaccine administration, once a vaccine is authorized and available. That shows you the power of our scale.”
While maintaining brick-and-mortar sales, the company has seen huge growth in e-commerce and concomitant home delivery. With the combined offering of front-store products and prescriptions, “we’re bringing the complete CVS Pharmacy to your home,” Coleman says.
Since the pandemic’s start in March, CVS’ online sales have grown fivefold. To support its delivery service, the company added DoorDash to its existing Instacart and Shipt services in June. To meet consumer demand, CVS also recently doubled the amount of snack and grocery products available through DoorDash. Moreover, online shopping remained integrated with the ExtraCare Rewards loyalty program. “That makes it even easier for people to redeem their coupon offers and get rewards,” Coleman remarks. “And we’ve seen healthy increases in downloads of and engagement with the CVS app.”
As more consumers are thinking about immunity and proactive wellness this season, the company’s Tested to Be Trusted initiative has garnered attention for ensuring the accuracy of the dietary ingredients in all vitamins and supplements CVS carries. “We’re really proud of that program,” says Coleman. “Core customers value that transparency. And it’s not only our CVS brand products that we’ve put through the ringer. As we like to say, we want to make sure that what’s in the bottle is on the label and what’s on the label is in the bottle. We’re making sure that people can trust the products they buy at CVS. Because that’s not always the case. There are certain parts of our retail world that are sort of the Wild West, and we think customers appreciate our intent to root that out.”
Tested to Be Trusted launched in May 2019, with 1,400 vitamins and supplements from 152 brands across 11 categories, including diet and nutrition, pain and digestives. At the time, about 7% of eligible products failed the third-party testing, leading CVS to encourage the manufacturers to either relabel or reformulate them, or pull them from shelves and CVS.com. Today, 100 new national and up-and-coming brands and 450 new products are covered by the standards, and Tested to Be Trusted is still the first and only program by a national retailer that requires this caliber of standards for vitamins and supplements.
“The feedback from the public has been overwhelmingly positive,” Coleman says. “Surveys show that the program has increased confidence in CVS Pharmacy as a trusted health and wellness destination.”
Also drawing brick-and-mortar customers is the ongoing rollout of the HealthHUB format with broadened health care services and additional wellness categories. With increased sales and profits, HealthHUBs “have been a winner,” declares Coleman, explaining why 1,500 stores are planned to be up and running by the end of 2021. “It just reaffirms our commitment to health and wellness. And with COVID, it’s more important than ever.”
In the beauty arena, CVS’ 120 Beauty in Real Life stores elevate the category’s presentation, with enhanced lighting and flooring providing an upscale feel, along with added services and new brands. Many HealthHUBs have Beauty in Real Life departments, reflecting the company’s focus on both health and beauty, says Coleman. “We’re not slowing down on our beauty emphasis. We’re trying to bring the best of both worlds together where it makes sense.”
Also elevating CVS’ beauty presentation is its Beauty Mark initiative, which has led to product and in-store marketing imagery bearing a watermark signifying a lack of embellishment, or being clearly labeled as digitally altered. “It’s been a really great initiative,” says Coleman. “It’s driven the conversation around how unrealistic looks based on altered images have a negative impact — particularly on young girls and adolescents.”
CVS believes it has had a positive impact, not just on customers, but also on the industry, he says, citing Procter & Gamble Co.’s Olay brand’s commitment to no retouching of skin in all advertising by 2021. “That’s a huge deal, because we can only control what we do within our stores. We’re thankful to our supplier partners for getting on board and supporting Beauty Mark. And now some of them are extending that across the board into to their brand marketing.”
Looking good, he adds, is also connected to eating right, and CVS has fostered nutritious diets with an expanded mix of healthful foods and beverages. A recent survey that CVS conducted in partnership with The Harris Poll found that two-thirds of American adults are choosing better-for-you snacks and meal solutions more often than they would have prior to the pandemic. CVS has continued to increase the variety and quantity of better-for-you snacks and groceries in stores over the years.
“We’ve seen this wellness movement building over the past few years towards more proactive management of health,” Coleman comments. “CVS has been in front of that, and now with the pandemic, people are more and more interested in prevention. They want to build their immune systems, and eating right is obviously one of the first things you can do.”
While CVS has provided shoppers with increased access to better-for-you products, including a variety of organic, vegan, gluten-free and keto-friendly options, it also ensures availability of shoppers’ favorite indulgences and treats. The upshot has been strong sales in the consumables category as consumers continue to spend more time at home, and Coleman anticipates that continuing for the foreseeable future.
One category in which healthfulness has been a subject of some debate is CBD. CVS has the products in a limited number of stores as permitted by state laws and policy regulations. “We recognize that CBD products are still very popular,” Coleman says. “The ones we have from national brands are well received by our customers.” But he emphasizes that the chain has only topicals and creams, avoiding ingestibles, including tinctures and supplements, out of an abundance of caution and respect for federal regulations. “We’re not going to push it. We’re trying to provide health and wellness solutions that are permitted and are safe.”
Noting that its CBD products are third-party tested, he says that with the market having attracted some relatively new suppliers, the retailer wants to ensure that manufacturing standards are not being bypassed. “So we do quite a bit of checking to assure the makeup and quality of what goes on our shelves.”
Turning to the private label arena, Coleman says exclusive store brand lines continue to be very important to CVS and its customer base. At the same time, he credits national brands with providing extensive innovation and marketing muscle that helps drive traffic. But while the chain is keen on growing national brand sales, it recognizes that customers are also interested in value, as well as how CVS differentiates itself from the competition.
“Our store brands,” he adds, “have taken on greater prominence during the pandemic as people whose jobs and finances have been upended seek more affordable products. We’re proud that for over 50 years we’ve continued to innovate and offer value for our customers in private label. We’ve made it easy to access high-quality products at great prices. We like to lead with our store brands, not to follow. And we’ve got a nice innovation pipeline for upcoming products that we’re really proud of.”
The company has also established an accelerator program called CVS Launch to help promote innovative and emerging brands. Such brands could come out under their own name or under the CVS umbrella, notes Coleman: “There are multiple paths to get on the shelf.”
One strategy that suits all products on CVS’ shelves is personalization, and the company has made the most of the tactic through its ExtraCare Rewards loyalty program. “People want offers relevant to them, and our customers are engaging with ExtraCare across multiple platforms,” Coleman says. In response, CVS sends out personalized emails to ExtraCare members, while other offers are presented via the app and even in-store signage.
Shoppers can get offers in a text if they so choose, including messages that provide reminders when their ExtraBucks are expiring. Tremendously positive feedback has led to the launch of a dashboard that lets members track all of their rewards in one place.
Coleman joined CVS in late 2012, less than two years after Larry Merlo had been named chief executive officer. As Merlo gets ready to retire, Coleman says a significant part of his legacy will be the chain’s elimination of tobacco products. He says the ban, “which still resonates today,” was part of Merlo’s movement of the company to become a premier health and wellness destination. Ending tobacco sales was a big step because it involved a major financial sacrifice, Coleman says. “To Larry’s credit, we did it, and we changed our name to CVS Health because we were really trying to signal to people that we are a health care company.”
Coleman is also enthused about Karen Lynch’s succession to the top job. He has gotten to know her through her leadership of the company’s COVID-19 task force, of which Coleman is a member. During daily task force meetings in the spring and summer, when Coleman reported on store operations, Lynch took “a great interest in the entire enterprise and how the pieces come together,” he said. “So I’m excited for Karen and what she’s going to do to carry the torch.”