June 23, 2015
CVS launches innovation lab to spur cutting edge invention
Last week, CVS Health announced the official opening of the company’s new Digital Innovation Lab in Boston. With the move, the pharmacy giant joined other brick and click retailers opening similar operations, including Home Depot, Staples, Target and Walmart.
The goals of the lab include pursuing innovation in mobile, multi-channel e-commerce and personalization. The company, which claims its services reach 100 million customers annually, said it intends to seek partnerships with both startups and established companies.
"Part of what we’re doing here is access to talent," Brian Tilzer, senior vice president and chief digital officer for CVS Health, told BetaBoston, "but the bigger idea is having a way we can engage with the startup community in digital health care to solve things that we can’t solve alone, and become a partner of choice to emerging companies."
CVS plans to roll out a wide range of digital services over the next year, including the use of beacons to send customers pharmacy reminders while they shop in stores. It also intends to develop apps that will turn mobile devices into "remote diagnostic tools."
"We’re going to invent things here that don’t exist anywhere on the planet, things that can be focused on what truly matters: our health," Mr. Tilzer told Fast Company. "We’re using digital to change health outcomes of millions of Americans."
Photo: CVS
The lab, located in Boston’s Back Bay, will ultimately employ up to 100 team members. The idea is for the lab team to complement the 100 digital pros currently working at CVS’s Digital Experience Center in the company’s home of Woonsocket, RI.
The debut of the Digital Innovation Lab was somewhat overshadowed by last week’s announcement that CVS had reached a $1.9 billion deal with Target to operate pharmacies inside the mass merchandiser’s stores along with rebranding existing health clinics in the chain’s stores to its own MinuteClinic banner.
- CVS Health Opens Digital Innovation Lab in Boston – CVS Health
- CVS’s new digital innovation lab aims to engage local startups – BetaBost/The Boston Globe (tiered sub.)
- Not Just a Pharmacy: CVS Unveils Its Digital Innovation Lab – Fast Company
- Will the Target/CVS pharmacy deal lead to a future merger? – RetailWire
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Carol Spieckerman
President, Spieckerman Retail
Recent Discussions
Discussion Questions
What effect do you expect the CVS Digital Innovation Lab will have on the company’s brand positioning and, ultimately, its performance over the next several years? Do you see the steps taken by CVS — including eliminating tobacco sales, the Target deal and the opening of the lab — as signals the company is on a roll?
Poll
CVS may be late to retail’s lab launch party but it’s a smart decision nonetheless and particularly on the heels of its hookup with Target. Digital will be THE differentiator as health and wellness players take on the daunting challenge of tying products, services, physical, digital, owned assets and third-party relationships together into a compelling and unified proposition. Will CVS share its learnings with Target or play it close to the vest?
CVS has rigorously followed its strategic aim of creating a multi-faceted healthcare company to provide its customer base with a wide range of healthcare services and products. Over the last year, they have dropped tobacco, purchased Omnicare (long-term care pharmacy), and acquired Target’s pharmacy and clinical businesses as part of this strategic vision. The innovation lab is a new area of providing healthcare services that opens up yet another front. The company (which has recently changed its name to CVS Health from CVS Caremark) is well on its way to becoming one of the most comprehensive healthcare providers to businesses and patients in the U.S., and its strategic vision and the way in which it is pursuing it should be a model for other companies. It is interesting to note that the original drug store business (which ironically began without Rx) contributes less than half of corporate volume.
CVS is doing a lot of things right and this is an extension of their leadership and decision-making. At the same time, when companies set up separate innovation labs doesn’t it validate the bureaucratic nature of their legacy organizations?
Yes, it signals the company is on a roll and, to mix metaphors, smart enough to get on the innovation bandwagon.
I also recognize a good answer when I see it: Carol Spieckerman already wrote: “Digital will be THE differentiator as health and wellness players take on the daunting challenge of tying products, services, physical, digital, owned assets and third-party relationships together into a compelling and unified proposition.”
This is a key strategic move on the part of CVS as have been several of their recent moves. Are they on a roll? Absolutely!
The innovation that comes out of this lab, assuming it is on track, will define the direction the brand is moving. I wish them all the best.
For my two cents.
This shows that CVS is making a top-level investment in digital innovation and could only mean positive things for the company as a whole. I look forward to what will come out of the lab!
The Innovation Lab concept that has been popping up quite a bit lately is a great idea by these big corporations. It gives the opportunities for startups to showcase their innovations and accelerate the time to market. For the CVS brand, it contributes to their image of being committed to innovation and keeping up with technology. I think it is a great move, but they should have really announced it at a different time to avoid the shadow of the Target deal.
CVS’s focus over the past year has been truly exciting. If their Innovation Lab can focus on the practical and not the faddish, it might be truly impactful. The health market is still immature, and smart players can create wholly new products and services.
If the retail lab is run by some techie whiz with tools up the wazoo, or a merchant-warehouseman retailer with supply chain skills, it won’t amount to much. On the other hand if it is run by a salesman with Jeff Bezos’s instincts, then it’s Katie bar the door! (BTW, given their consistent performance for a very long time, it is just possible that CVS knows the difference among the three types I mentioned.)
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CVS may be late to retail’s lab launch party but it’s a smart decision nonetheless and particularly on the heels of its hookup with Target. Digital will be THE differentiator as health and wellness players take on the daunting challenge of tying products, services, physical, digital, owned assets and third-party relationships together into a compelling and unified proposition. Will CVS share its learnings with Target or play it close to the vest?
CVS has rigorously followed its strategic aim of creating a multi-faceted healthcare company to provide its customer base with a wide range of healthcare services and products. Over the last year, they have dropped tobacco, purchased Omnicare (long-term care pharmacy), and acquired Target’s pharmacy and clinical businesses as part of this strategic vision. The innovation lab is a new area of providing healthcare services that opens up yet another front. The company (which has recently changed its name to CVS Health from CVS Caremark) is well on its way to becoming one of the most comprehensive healthcare providers to businesses and patients in the U.S., and its strategic vision and the way in which it is pursuing it should be a model for other companies. It is interesting to note that the original drug store business (which ironically began without Rx) contributes less than half of corporate volume.
CVS is doing a lot of things right and this is an extension of their leadership and decision-making. At the same time, when companies set up separate innovation labs doesn’t it validate the bureaucratic nature of their legacy organizations?
Yes, it signals the company is on a roll and, to mix metaphors, smart enough to get on the innovation bandwagon.
I also recognize a good answer when I see it: Carol Spieckerman already wrote: “Digital will be THE differentiator as health and wellness players take on the daunting challenge of tying products, services, physical, digital, owned assets and third-party relationships together into a compelling and unified proposition.”
This is a key strategic move on the part of CVS as have been several of their recent moves. Are they on a roll? Absolutely!
The innovation that comes out of this lab, assuming it is on track, will define the direction the brand is moving. I wish them all the best.
For my two cents.
This shows that CVS is making a top-level investment in digital innovation and could only mean positive things for the company as a whole. I look forward to what will come out of the lab!
The Innovation Lab concept that has been popping up quite a bit lately is a great idea by these big corporations. It gives the opportunities for startups to showcase their innovations and accelerate the time to market. For the CVS brand, it contributes to their image of being committed to innovation and keeping up with technology. I think it is a great move, but they should have really announced it at a different time to avoid the shadow of the Target deal.
CVS’s focus over the past year has been truly exciting. If their Innovation Lab can focus on the practical and not the faddish, it might be truly impactful. The health market is still immature, and smart players can create wholly new products and services.
If the retail lab is run by some techie whiz with tools up the wazoo, or a merchant-warehouseman retailer with supply chain skills, it won’t amount to much. On the other hand if it is run by a salesman with Jeff Bezos’s instincts, then it’s Katie bar the door! (BTW, given their consistent performance for a very long time, it is just possible that CVS knows the difference among the three types I mentioned.)