June 4, 2015
CVS is muy serio about engaging Hispanics
When CVS announced last July that it had entered into an agreement to acquire Navarro Discount Pharmacy, the largest Hispanic-owned drugstore chain in the U.S., the reason behind the deal was no secret: CVS wanted to develop a better understanding of the fastest growing demographic in the U.S. Now, it appears as though the drugstore chain is ready to put what it has learned to the test with the opening of its new CVS/pharmacy y mas concept.
CVS has remodeled 11 existing stores in the Miami area and built one new location under the banner. Stores will feature fully bilingual staff and include more than 1,500 "trusted Hispanic" products, including the Agustin Reyes, Cafe la Llave, Creolina, Fabuloso, Formula 88, and Suavitel brands.
"With more than 7,800 stores across the U.S., we understand that our retail pharmacies should not be one size fits all for the diverse communities we serve," said Helena Foulkes, president of CVS/pharmacy, in a statement. "CVS/pharmacy y mas stores are designed to be a place where our Hispanic customers feel at home to receive our best-in-class pharmacy service, along with personalized products and services to better meet their diverse needs."
Source: cvs.com
The new stores will offer competitive pricing and include more value and family sized products. Stores will include fully staffed Navarro fragrance counters and Cuban coffee known as "Cafecito" will be served between 10 a.m. and 3 p.m. daily.
"We are committed to applying learnings from both Navarro and CVS/pharmacy y mas to other markets with dense Hispanic populations," said Ms. Foulkes.
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Discussion Questions
Is CVS wise to create its own Hispanic banner or should the retailer have concentrated on expanding the Navarro brand? How successful will CVS be in using what it learns from CVS/pharmacy y mas in largely Hispanic markets that include customers who are not predominantly of Cuban descent as in Miami?
Poll
It’s hard to say what the reaction will be from the Hispanic community in markets like Miami. I suspect that offering familiar items such as “Cafecito” will help to welcome the Hispanic market.
Creating a new brand under the umbrella of CVS will be a very good thing in the long run and will allow corporate to adopt valuable lessons learned and best practices for these type of initiatives in other markets with a significant Hispanic population, like NYC. Are they smart to do this in the Hispanic community? As the CEO of Telemundo recently stated at the recent IRI conference, any brand, marketer or retailer that is not jumping on the huge growth of the Hispanic market demographic with both feet is nuts. “You cannot take your English language commercial and dub it into Spanish and think it will be effective.”
It’s a good move on the part of CVS. However, I find it interesting that CVS was in the news yesterday here in NYC for some local managers asking employees to keep a closer eye on non-white shoppers.
If these new initiatives by CVS are going to work, this attitude needs to change.
I’m glad to see CVS in this kind of “test and learn” pattern. Rather than try to fit a truly shopper-centric model into an existing format, they are meeting the Hispanic shoppers on their ground, providing not only products but cultural experiences that matter. They’ll need to adjust/tweak in other markets but it sounds like they are on the right track to deliver results.
The Hispanic population in the U.S. is destined, appropriately, to continue to integrate throughout the U.S. economy, be it in health care-related or other forms of retail. CVS is the name and brand of this company. They should proudly defend that banner in all neighborhoods around the country.
Equally importantly, CVS has recognized the disruptive nature of the Affordable Care Act. Consumers of all stripes are re-positioning their purchase behaviors because consumers, unlike their political counterparts, will respond rationally and financially for themselves and their families.
CVS comes from a second place position to Walgreens in attracting the multi-cultural population. Based on the Prosper Monthly Consumer Survey, which asks respondents “Where you shop MOST often for Prescription Drugs?” the Hispanic population has made a slow, but incremental move forward in choosing CVS. The January figures reflect these percentage of Hispanics choosing CVS over the six years: 1/09 – 16.8 percent, 1/10 – 15.8 percent, 1/11 – 16.3 percent, 1/12 – 17.0 percent, 1/13 – 17.0 percent, 1/14 – 19.2 percent, 1/15 – 18.4 percent.
During that time, Walgreens has drifted down among Hispanics. It had been 25.2 percent of the Hispanic population choosing Walgreens in January, 2009. It is now 20.1 percent in January, 2015.
Walgreens needs to wake up to this issue as well. Charles Walgreen lead the way in servicing the African-American population some 75 years ago. His son and grandson followed that path as well. Walgreens continues to hold a dominant share among this important segment.
Both drug chain leaders will find the battle for share to be fought on multiple fronts. Listen to and watch the consumer.
The key to this move is keeping the CVS banner. That connection will carry a lot of weight over time. This is a relative short-term and powerful strategy. Short-term in that Hispanics, like every other immigrant group that has ever come to America, will eventually integrate into the culture of the country. But those connections will last over a generation. Brilliant.
As far as the non-Hispanic shopper goes, some will go someplace else. Most most will not care. We are watching non-Hispanics being integrated into the Hispanic culture as well.
As an aside: Things change. It is estimated that by 2020, Asians will be the largest minority in NYC, surpassing those of Hispanic origin.
Roger Saunders touches on an important issue. CVS y mas: is that serving a community or ghetto-izing it? Navarro served the Hispanic community in South Florida well, but every time I was in one there were plenty of English speakers in there, some (many?) of whom were, like me, not of Latin background. CVS y mas may be a great marketing gimmick, but how the merchandising and service are executed will determine whether CVS becomes an important destination for Hispanic consumers.
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It’s hard to say what the reaction will be from the Hispanic community in markets like Miami. I suspect that offering familiar items such as “Cafecito” will help to welcome the Hispanic market.
Creating a new brand under the umbrella of CVS will be a very good thing in the long run and will allow corporate to adopt valuable lessons learned and best practices for these type of initiatives in other markets with a significant Hispanic population, like NYC. Are they smart to do this in the Hispanic community? As the CEO of Telemundo recently stated at the recent IRI conference, any brand, marketer or retailer that is not jumping on the huge growth of the Hispanic market demographic with both feet is nuts. “You cannot take your English language commercial and dub it into Spanish and think it will be effective.”
It’s a good move on the part of CVS. However, I find it interesting that CVS was in the news yesterday here in NYC for some local managers asking employees to keep a closer eye on non-white shoppers.
If these new initiatives by CVS are going to work, this attitude needs to change.
I’m glad to see CVS in this kind of “test and learn” pattern. Rather than try to fit a truly shopper-centric model into an existing format, they are meeting the Hispanic shoppers on their ground, providing not only products but cultural experiences that matter. They’ll need to adjust/tweak in other markets but it sounds like they are on the right track to deliver results.
The Hispanic population in the U.S. is destined, appropriately, to continue to integrate throughout the U.S. economy, be it in health care-related or other forms of retail. CVS is the name and brand of this company. They should proudly defend that banner in all neighborhoods around the country.
Equally importantly, CVS has recognized the disruptive nature of the Affordable Care Act. Consumers of all stripes are re-positioning their purchase behaviors because consumers, unlike their political counterparts, will respond rationally and financially for themselves and their families.
CVS comes from a second place position to Walgreens in attracting the multi-cultural population. Based on the Prosper Monthly Consumer Survey, which asks respondents “Where you shop MOST often for Prescription Drugs?” the Hispanic population has made a slow, but incremental move forward in choosing CVS. The January figures reflect these percentage of Hispanics choosing CVS over the six years: 1/09 – 16.8 percent, 1/10 – 15.8 percent, 1/11 – 16.3 percent, 1/12 – 17.0 percent, 1/13 – 17.0 percent, 1/14 – 19.2 percent, 1/15 – 18.4 percent.
During that time, Walgreens has drifted down among Hispanics. It had been 25.2 percent of the Hispanic population choosing Walgreens in January, 2009. It is now 20.1 percent in January, 2015.
Walgreens needs to wake up to this issue as well. Charles Walgreen lead the way in servicing the African-American population some 75 years ago. His son and grandson followed that path as well. Walgreens continues to hold a dominant share among this important segment.
Both drug chain leaders will find the battle for share to be fought on multiple fronts. Listen to and watch the consumer.
The key to this move is keeping the CVS banner. That connection will carry a lot of weight over time. This is a relative short-term and powerful strategy. Short-term in that Hispanics, like every other immigrant group that has ever come to America, will eventually integrate into the culture of the country. But those connections will last over a generation. Brilliant.
As far as the non-Hispanic shopper goes, some will go someplace else. Most most will not care. We are watching non-Hispanics being integrated into the Hispanic culture as well.
As an aside: Things change. It is estimated that by 2020, Asians will be the largest minority in NYC, surpassing those of Hispanic origin.
Roger Saunders touches on an important issue. CVS y mas: is that serving a community or ghetto-izing it? Navarro served the Hispanic community in South Florida well, but every time I was in one there were plenty of English speakers in there, some (many?) of whom were, like me, not of Latin background. CVS y mas may be a great marketing gimmick, but how the merchandising and service are executed will determine whether CVS becomes an important destination for Hispanic consumers.