CVS Moves to Personalization

CAROL ANGRISANI

WOONSOCKET, R.I. — Supermarkets aren't the only retailers getting more involved in personalized coupons. CVS/pharmacy here is leveraging the promotional tool to build loyalty.

CVS' new ExtraCare Coupon Centers will be placed in more than 50% of the chain's 6,200 retail locations by the end of the year, said Rob Price, chief marketing officer at CVS/pharmacy.

“Our stores and customers are very excited about this” initiative, Price noted.

Shoppers who scan their ExtraCare loyalty cards at the interactive coupon kiosks receive targeted offers based on past purchases.

“This takes advantage of detailed transaction information that customers have demonstrated on their most recent trips,” Price said at Information Resources Inc.'s Reinventing Retail & CPG Summit, held earlier this month in Kissimmee, Fla.

Shoppers can also use the Coupon Centers to check product prices and get Extra Bucks rewards. Extra Bucks is the name CVS uses for the 2% it gives back to loyalty card holders for every dollar spent, along with $1 back for every two prescriptions filled at its stores. Extra Bucks are paid out in January, April, July and October.

The Coupon Centers were first piloted in 30 stores in 2005. They expanded to 680 units in 2006 and 1,379 stores last year.

The CVS effort comes at a time when a growing number of retailers are shifting focus to coupon and promotional offers that are relevant to individual shoppers. Price Chopper and Ukrop's shoppers can scan their loyalty card at the start of each shopping trip at in-store kiosks to receive personalized coupons. As with CVS, the Price Chopper and Ukrop's offers are customized for each shopper based on past purchasing behavior.

Green Hills, of Syracuse, N.Y., is having success with SmartShop, a technology that provides customized savings based on individual buying habits. Members can access a personalized shopping list via email, a dedicated Green Hills Web page or a SmartShop kiosk.

The Coupon Centers are the latest way CVS is building its 13-year-old ExtraCare loyalty program, which boasts 50 million members.

“We're going to continue to feed, invest and innovate this program,” said Price.

The Coupon Centers join other ExtraCare consumer touch points like the CVS circular, along with offers distributed via personalized email, direct mail and register receipts. “The [ExtraCare] value proposition is pervasive, frequent and multi-layered,” Price said. “We are building capabilities to innovate and captivate with every touch point.”

The objective of ExtraCare is to spur high-value behavior, and increase shopping frequency and basket size. The average market basket for ExtraCare cardholders is 4.5 items totaling $15, compared with 3.6 items totaling $12 for shoppers without the card, Price said.

“Sales are bigger because ExtraCare members tend to buy higher-value and higher-profit items,” Price said. “Being a member of ExtraCare dramatically changes frequency, profitability and customer satisfaction.”