CVS: Forging a New Path

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Some drugstore chains are pursuing market share by going on construction binges. Others are adding more groceries, a la Wal-Mart. But CVS is betting its mortar and pestle on an innovative store design that promises to change the shopping experience for its customers.

The layout caters to female customers with lower shelving, showcases favorite product categories of baby boomers and creates an easy new path from the front door directly to the pharmacy, among other things. CVS decided that overhauling the design was the best way it could provide -- and market -- what its customers most valued in its stores and the things that most set apart drugstores from other retail formats, including supermarkets and big discount marts.

"We've gotten comments like, 'Did you make the store bigger?' and the scores that customers are giving us around the shopping experience have really skyrocketed," says Helena Foulkes, 41, a former investment banker who now is senior VP-advertising and marketing for the Woonsocket, R.I.-based chain.

CVS made two structural changes that enabled it to put design out front. It acquired about 1,300 stores in Florida and Texas from Eckerd in mid-2004 and rolled out the new design there first, before deciding whether to retrofit its other 4,200 stores in 35 other states. Second, over the last three years, CVS has upgraded its design personnel and switched ad agencies as part of the strategic elevation of design.

The company culled a team from marketing and design staffs to work in a warehouse remote from headquarters and develop, test and refine a prototype. Their formula not only harnesses design functionally and visually but also reflects CVS's growing emphasis on in-store merchandising as a powerful form of marketing.

So CVS overhauled its skin-care department, for example, because it's a magnet for women 40 and older, installing lighted shelving and other touches. "It's functionally easier for customers and emotionally uplifting," says Ms. Foulkes. "If you're spending $15 or $20 in this category, you want to feel like you're doing something special for yourself."

As a result of its design research, CVS also decided to stop hiding its pharmacies in the back of the store behind a labyrinth of aisles. "Our heavy pharmacy customers see the pharmacy as the thing that helps keep them in the game and active and healthy with their families," Ms. Foulkes says. "So we decided to open up and celebrate our pharmacies."

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