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CVS puts its brand on innovation


This isn’t your parents’ private-label business any more. To be sure, the rules of the store brand game have changed over the years — price matters, but it certainly isn’t the only factor driving the growing consumer interest in private label that exists today.

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“Our customer’s expectations of our store brand products have changed,” Cia Tucci, VP store brands and quality assurance at CVS Pharmacy, told Drug Store News. “It’s no longer just about value, it’s about creating an offering that resonates on quality and trust — products that work, delight and fill an unmet need,” she said.

By that measure, CVS has upped its game in private label over the last several years, with store brand penetration up from about 17% in 2010 to more than 22% today. According to Tucci, the goal is to continue to push the boundaries on brand growth. More than 45 million households have at least one CVS Health private-label product in their medicine cabinet. And the company’s 6,000 private-label SKUs are growing more than two times faster than the overall industry private-label average, according to research from Kantar Retail.

Cia Tucci of CVS Health“Our ability to increase penetration in the [short time] starts with an internal focus. There’s a commitment at CVS to driving store brands,” Tucci said.

CVS Pharmacy’s commitment to store brands goes beyond a simple discount to brand equivalents, though the CVS Health brand does offer prices ranging 20% to 40% lower than comparable national brands. Quality and innovation are two other key factors associated with today’s CVS Health brand.

“Our mission overall is to deliver products that not only meet needs of affordability and efficacy, but also delight her with innovation,” she added. “This is where exclusive brands really play a part in our portfolio — products that deliver a unique promise to our customer and may not fall within our CVS Health umbrella brand.”

Over the years, CVS Health has introduced several successful exclusive brands, from the premium Radiance Platinum line of preservative-free dietary supplements to such beauty brands as Makeup Academy and Skin+Pharmacy. “These types of products would normally be sought after in specialty or prestige [channels], and we’re able to offer them to our customers at a more affordable price,” Tucci said. In some cases, these exclusive products also are helping CVS to deliver on its Elevate Beauty strategy, positioning CVS stores as a destination for higher-end beauty products typically only found in specialty or prestige stores.

CVS’s commitment to store brands also dovetails with another of the company’s key strategic pillars for re-energizing sales growth in the front-end of its stores — something it calls “Better Health Made Easy.” Consumer health has been a key focus for CVS store brand development. In May, the company launched more than 2,500 health-and-wellness SKUs across 19 categories with the CVS Health brand. “The company is committed to transforming our stores into premier health and beauty destinations by bringing more high-quality and innovative products to our shelves,” Tucci said.

That commitment has enabled CVS Pharmacy in some cases to identify white space opportunities, where no brands have staked any claims, and deliver real product innovation under its own store brand.

CVS Health's  Advanced Acne TherapyA strong example, in time for this year’s cough-cold season, the company introduced a liquid cold remedy packaged in a single-serve cup, combining the convenience of a single-brew coffee maker with the benefits of a soothing warm beverage to ease cold-and-flu symptoms.

“The innovation we bring to the portfolio is a big source of pride across my team,” Tucci said. “We spend a lot of time talking to, listening to and gaining feedback from our customers,” she added. Those insights in many cases are helping Tucci and her team deliver first-to-market innovation.

Another example of the changing nature of today’s store brand business is the role CVS’s suppliers are playing to help cocreate innovation.

“Our brand growth starts with this internal focus, but without our supplier partners, we wouldn’t be able to achieve the growth that we have,” Tucci explained. “In some cases we have the insights, and we look for suppliers who can help deliver the product. In other cases, we have suppliers who come to us with insights and an opportunity for points of differentiation, whether it’s a form difference or or a new line of products.”

Looking forward, expect more innovation from Tucci’s store brands team. This fall the company will launch Health on the Go — a new line of product exclusives that will be merchandised at the pharmacy counter and will feature many common OTC ingredients that typically are either the most common pharmacist-recommended products or products that most often are sold in conjunction with some common prescription therapy.

“The packaging is really what’s great about this,” Tucci said. “‘On the Go’ means it’s in a smaller pack size” containing anywhere from a one-week to a two-week regimen, Tucci said. “And there’s a great locking device on the package that makes it child-proof.”

It is just another example of how CVS Health is leading with innovation in store-brand development — and another example of how it continues to ratchet up growth for its own brands.

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