KISSIMMEE, Fla. — CVS Caremark Corp. is helping drive the shift from mass to personalized retailing, senior vice president of merchandising and retail pricing Judy Sansone said at the IRI Summit here last month.

With its individualized circulars and store clusters, the chain has recognized that customers vary widely even within the same demographic group, she said.

“One size does not fit all,” she commented. “Personalization is here to stay.”
Tailored marketing drives front-end growth by letting customers know that CVS understands and appreciates them and gives them consistent value, she said. It’s the same principle that is applied by banks, Netflix and Pandora.

Once a consumer has been engaged by a retailer, “she’s telling everyone in the entire world on every social site available about what great deals she got,” Sansone said. “It’s an exciting time, and it’s full of lots of ­opportunities.”

On the other hand, she noted, shoppers are as busy and budget conscious as ever, making it hard for retailers to maintain customers’ loyalty over the long term.

In light of that, CVS gives them personal attention, and nothing is as personal as health care. A woman may well be the “chief executive health officer” of her family, Sansone noted, citing a representative persona called Beth.

Beth helps manage her husband’s diabetes and tracks the specialty medications for her child’s cystic fibrosis as well as drugs for her father’s high blood pressure and cholesterol, all the while watching her own weight.

“Her life is mighty complicated,” Sansone said, and “personalized solutions are the key to gaining her loyalty.”

The essence of personalization is understanding a customer’s needs, creating programs to support those needs over time, ensuring offerings work together, and measuring and refining, she said.

“We have a relentless passion for understanding the customer,” she commented, citing CVS’ work with IRI to combine internal point-of-sale and ExtraCare frequent shopper data to discern insights about customers.

“We’ve always known who our most valuable customers were,” she remarked. “But now we know which of our customers have the most potential.”

Data doesn’t tell the full story, she added. Understanding what’s beneath the numbers is “where the magic happens,” she said. The drive to understand the customer is “really part of our DNA,” she added.

At pharmacies and MinuteClinics “personalization comes to life,” she noted. Counseling, other services and specialty pharmacy provide “incredible, life-changing personal experiences for our customers. And that is an especially powerful formula inside a CVS.”

At the front end, store clustering takes into account sharp variations in the shopping preferences of different neighborhoods. Sansone cited 5-Hour Energy drink sales in stores in two nearby states over the same time span. One sold thousands of the products, while the other outlet sold one SKU. Inventory was in short supply at the former, while being wasted at the latter. So the chance to get the mix right store-by-store is “a tremendous opportunity,” she said.

“Personalization, while complex, is here to stay,” she added. “And the good news is we have the tools that are more productive than mass marketing tools.”

A key benefit of the trend, she said, is that it applies to small and large suppliers, leveling the playing field. A personal offer lets a small manufacturer target a customer in the same way as a large one.