Company holds first annual Retail Supplier Summit

BOSTON — CVS Health is in the midst of reimagining its drug stores to reinforce its position as the front door of health care in America. At the company’s first annual Retail Supplier Summit yesterday, Musab Balbale, senior vice president and chief merchandising officer, talked about the process and how it will better align retail offerings with the overall mission of CVS Health.

“The new store will feel very, very familiar,” said Balbale, who hosted the two-day summit where suppliers heard from members of the management team. “The first thing we’re trying to do is increase the relevance of our health and wellness offering, less from an assortment perspective and more from the storytelling and the editorial nature of the format. This is a continuous effort and evolution to serve the health and wellness needs of our local communities.

“The second is we’re trying to make it really easy for consumers to find products. Consumers come to CVS because we’re a task-driven retailer, so the more quickly we can get them to the product they’ve come in for, the more we think they’ll engage other offerings in the store, whether it be on the product side or the services side.

“The third is we’re trying to simplify the store for our colleagues, make it easier to stock, make sure everything has a home and remove a lot of the clutter. So the combination of that results in a store that works better for everybody — from brands to our colleagues and merchant teams.”

The latest iteration of the CVS Pharmacy prototype, in Millis, Mass., about 30 miles outside Boston, proves the validity of architect Mies van der Rohe’s dictum less is more. Eighteen percent of the SKUs typically found in a CVS store have been eliminated, according to Balbale. The paring of the merchandise mix, which was executed through the lens of the company’s focus on health and wellness, was accompanied by the elimination of unnecessary shelf tags and other signage. The clean, contemporary look provides a setting in which CVS can build and strengthen connections with consumers and patients.

“A few things are different when you walk in the Millis store,” said Balbale. “The first is the colleague faces the consumer. By doing that, there’s an immediate connection. The second is the store is built in a circuit, which creates a natural movement around the store. That way consumers see more of the store.

“The third is that our end-caps are all very intentionally done. They’re editorialized; there’s an end-cap story. We also have feature tables that talk about more complicated stories like sleep. That allows us to actually take the consumer through a racetrack of multiple stories.”

Taken together, the changes will help facilitate the development of a unified, authoritative voice for CVS Pharmacy, within which there is still room for brand partners to deliver their own messages.

“We’re simplifying our messages to make it more clear for consumers,” Balbale explains. “We continue to keep pushing ourselves to say, ‘Why does this matter? Why is it important for either the consumer or for the brand to tell that story? How do we do that in the most simple and easy-to-understand way possible?’

“As we think about editorial storytelling, it needs to be from a single voice or a single author. The voice and tone of the stories across the stores are starting to come together a little bit. Within that, there are frames where brands can express their individuality, and that’s obviously really important as well.”

Another significant experiment now under way at CVS Pharmacy is a reduction in promotional activity. Less reliance on deals reduces clutter in the stores, makes them simpler to manage and allows more emphasis on consistently low prices.

“Value matters to consumers,” Balbale said. “Our locations afford a premium, just given how convenient they are to most consumers. Promotions matter; they drive traffic, they drive engagement. Within those guardrails, what we need to do a better job of is addressing our regular price so that customers who aren’t highly engaged in our promotional programming still feel like they can capture value at CVS.”