Retailing Lessons from Loyalty Programs Around the Globe
Discuss the CVS Extra Care loyalty program and whether the program is a source of shopper insights that can be leveraged in multiple ways to be successful.
The CVS Extra Care loyalty program was created in 2001 and is known in the United States as the largest loyalty-card program today. By developing the loyalty program CVS is able to identify buying behavior of their customers which enables them to create unique marketing techniques. CVS has created three target marketing audiences from the information they retrieved from their retail information system (RIS), they are: Caroline, Vanessa and Sophie. Each of these audiences identifies the typical CVS customer. This is a great resource to identify shopper insights. Caroline is females between 18-34 that are either newly married or single and their primary interest is beauty products. Now that CVS has identified this customer profile, all customers that join the loyalty program, CVS will market beauty products too and offer coupons to attract them back to their store. Access to the data retrieved from the loyalty program allows CVS to make more specific marketing decisions and improve on their services. They created a Project Life design store which caters to their female audience since they are their target market. These stores have upscale designed beauty departments, shelves designed by the height of the average female, color coded aisles for better accessibility and self-checkouts for convenience. CVS was able to partner with HSBC bank to allow customers to earn discount savings, but what CVS gained from this partnership was even more valuable. CVS now has insights to pre and post levels of spending. Another way they have leveraged this program is to offer customers a way to track prescription purchases so they can submit for reimbursement from their insurance companies. All of these tactics are means to help CVS margins and gain loyal customers who will frequently shop at their stores.
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The CVS Extra Care loyalty program was created in 2001 and is known in the United States as the largest loyalty-card program today. By developing the loyalty program CVS is able to identify buying behavior of their customers which enables them to create unique marketing techniques. CVS has created three target marketing audiences from the information they retrieved from their retail information system (RIS), they are: Caroline, Vanessa and Sophie. Each of these audiences identifies the typical CVS customer. This is a great resource to identify shopper insights. Caroline is females between 18-34 that are either newly married or single and their primary interest is beauty products. Now that CVS has identified this customer profile, all customers that join the loyalty program, CVS will market beauty products too and offer coupons to attract them back to their store. Access to the data retrieved from the loyalty program allows CVS to make more specific marketing decisions and improve on their services. They created a Project Life design store which caters to their female audience since they are their target market. These stores have upscale designed beauty departments, shelves designed by the height of the average female, color coded aisles for better accessibility and self-checkouts for convenience. CVS was able to partner with HSBC bank to allow customers to earn discount savings, but what CVS gained from this partnership was even more valuable. CVS now has insights to pre and post levels of spending. Another way they have leveraged this program is to offer customers a way to track prescription purchases so they can submit for reimbursement from their insurance companies. All of these tactics are means to help CVS margins and gain loyal customers who will frequently shop at their stores.
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References: Berman, B., & Evans, J. R. (2010). Retail Management. New Jersey: Pearson Education Inc.