The message: marketing change to bring back customers

Drug Store News, Dec 13, 2004 by Michelle L. Kirsche

CVS executives are working to right the wrongs Eckerd made with its customers, like high prices, slow pharmacy service and limited hours of operation. But the challenge in putting its brand name on Eckerd stores is not necessarily in making those changes, but in getting Eckerd customers to walk through its doors to witness them--and most important, to like what they see.

The retailer is inviting shoppers through an aggressive marketing campaign that focuses on one key element: something "extra" CVS offers that its competitors can't and that Eckerd certainly didn't.

Once shoppers are in the door, the first thing they should notice is that the store is easier to navigate, the merchandise is easier to locate and the store has a slightly more upscale design. But it's the total shopping experience that CVS has created--time savings, shopping ease, everyday low prices and the ExtraCare loyalty card program--that the retailer is banking on to keep those customers coming back.

"There are thousands of changes that we're making at the store level," said Helena Foulkes, senior vice president of advertising and marketing. "So how do we make sure that we're talking about the few big ones that really matter to customers? When you walk into the Eckerd stores, you see right away the news that we want you to see around lower prices. There's a lot of overhead signage and shelf-level signage highlighting the items on sale. I think that's going to work for us in terms of changing price perception at Eckerd."

While changing customers' price perception is key to bringing them around to the new CVS mindset, it will take more than that to persuade a shopper who was turned off from Eckerd, for whatever reason, to walk back through its doors.

To do that, the test really becomes whether CVS can communicate all that's different about the Eckerd stores in a meaningful way. In addition to creating a loud and clear message wrapped around price, CVS has developed a communications plan tied to the name change in those locations reset to the CVS model. Analysts agree that selling the CVS name will be especially important in Texas and Florida, where residents are very familiar with Wal-greens and Eckerd, but CVS is the new kid on the block. Certainly, CVS has a leg up in Florida, where--by virtue of the number of snowbirds and retirees that have flocked there from points north, including many from CVS' core markets in the Northeast and Midwest--it benefits from a bit better name recognition than it does in Texas.

In the weeks prior to the ad campaign hitting in each market as CVS converts the stores there, CVS will look to communicate the changes in its circulars. Its circular for Florida's Clearwater/Tampa/St. Petersburg market during the week of Nov. 28 to Dec. 4 featured the CVS/pharmacy logo directly below the Eckerd logo, with the tag, "All offers good at CVS and Eckerd stores."

A banner running along the bottom of the front page highlights new longer hours and 24-hour locations. It promotes "great buys" and '"great prices" and advertises beauty aids with the tag, "Beauty brands you use at prices you'll love." It also devotes a full page to pharmacy with the headline, "Expect world-class pharmacy care."

The following week, the circular read, "Eckerd is now CVS/pharmacy," as conversions were completed in that area.

"We're making big, important changes and making sure that we're communicating them well," Foulkes said.

CVS, however, is confident it will drive more customers into the Eckerd stores and that they will like what they find when they get there. A Nov. 30 story appearing in the St. Petersburg Times offered a first-person account of how one retired shopper felt walking into the new and unfamiliar CVS format after previously shopping at Eckerd. The story notes that after being greeted by a CVS employee at the door and asked if he needed help, the customer said: "Let me just take a moment to drink this all in. This looks like a whole new store."

Outside of the physical changes, like the change from Eckerd blue to CVS red, CVS is charged with telling customers what's new and different that they may not notice immediately upon entering. The retailer is centering its TV ads, weekly circulars, direct mail and grass-roots marketing efforts on the message, "CVS/pharmacy. Expect something extra," which clearly dovetails neatly with the chain's ExtraCare loyalty card program, now up to more than 50 million cardholders--a mighty tool CVS will leverage to drive frequency as it enters its new markets.

"Everything we're doing is centered around communicating to consumers about all the extras they get at CVS," Foulkes said. The "extra" campaign is built on the investment in relationship marketing that CVS began years ago, which initially culminated with ExtraCare's debut about four years ago.

"We expect the company to sign customers up aggressively for the CVS ExtraCare card once the name change is complete," said Lehman Brothers analyst Meredith Adler. "CVS has found the card to be effective in driving volume at reasonable margins, especially for loyal customers."