CVS follows Target, offering curbside service

Discussion
Apr 20, 2016

CVS and Target have something else in common. Back in June, the two companies announced that Target would sell its pharmacies to CVS and make room for the drugstore chain’s clinic business (MinuteClinic) inside some of its stores, a deal worth $1.9 billion. Now, CVS is following Target in making an investment in Curbside, a third-party service, which as its name suggests delivers online orders to customers at the curb at no additional charge.

The new service known as CVS Express will be available to the chain’s customers using CVS’s mobile app or Curbside’s. The service is currently available through CVS locations in Atlanta, Charlotte and San Francisco. Approximately three-fourths of the SKUs sold in CVS stores are available using Curbside. CVS plans to include more stores in the service later this year.

“We founded Curbside to help make shopping at neighborhood stores faster and easier than ever before,” said Jaron Waldman, co-founder and CEO of Curbside, in a statement. “Our proprietary location technology ensures seamless, reliable order handoff at the moment a customer arrives and our console app powers an efficient pick and pack operation for CVS Pharmacy colleagues to prepare orders in the store.”

“CVS Express is a perfect embodiment of our digital mission,” added Brian Tilzer, senior vice president and chief digital officer, CVS Health. “By working closely with our retail team and partnering with Curbside, who brought industry-leading technology to our platform, we rapidly developed a seamless and simple solution that creates a significant time savings for customers.”

DISCUSSION QUESTIONS:
How important is it that CVS help its pharmacy customers save time shopping? Will the addition of curbside service help CVS differentiate from a wide range of rivals including c-stores, dollar stores, e-tailers, pharmacies and others focused on delivering convenient shopping experiences?

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"Smart. Smart. Smart. All you have to do to decide that this is a good partnership is to count the number of Boomers and seniors and think about declining mobility."
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16 Comments on "CVS follows Target, offering curbside service"


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Anne Howe
Guest
6 years 1 month ago

Smart. Smart. Smart. All you have to do to decide that this is a good partnership is to count the number of Boomers and seniors and think about declining mobility.

The only downside is the inevitable move that insurance plans will make to decline coverage of easier access to this valuable customer service.

Max Goldberg
Guest
6 years 1 month ago

From a customer service standpoint, curbside service is a plus for CVS. I wonder how significant an impact it will have on sales, since it negates impulse purchases. And will customers who use the new service still receive yard-long cash register receipts? The savings on paper alone could justify any increase in expense by CVS.

Richard J. George, Ph.D.
Guest
6 years 1 month ago

For some customers this option will be very important and should provide a point of difference at least temporarily, resulting in some store switching. In particular, some key customers for this service would include women, mothers with small children, the elderly and others to whom curbside service would be a real benefit. To date, CVS has not been able to make real inroads into online shopping. This enhancement could make a difference.

However, the downside is that this service takes customers out of the store. While busy professionals, as an example, might prefer such convenience, it comes at a cost of a lost store visit and an opportunity to sell something (unplanned, impulse, etc.) from the front of the store.

Peter J. Charness
Guest
6 years 1 month ago

Frankly I get it, but on the other hand don’t get it. It doesn’t make shopping convenient, it eliminates any (extra) shopping. I do get the issues with mobility for some customers, but for most, how hard is it to park, get into the store, pick up the pickup and maybe impulse buy some more?

For the retailers this is probably the most expensive fulfillment they can do, for the shopper (most of the shoppers) it’s not like going into the store and if the store is set up properly getting out five minutes later is not all that hard. (besides the walk in and out of the store justifies that candy bar, doesn’t it?)

For prescription pick up, many stores have drive-thru windows already. Turning a brick-and-mortar location into strictly a fulfillment/pick up center misses using that physical location to its best advantage. Retailers need to rethink the role of the store completely, bottom up.

Mohamed Amer
Guest
Mohamed Amer
6 years 1 month ago

Do not underestimate the power of ease and convenience! This is a good move to differentiate and as long as execution follows, CVS will do just fine.

Zel Bianco
Guest
6 years 1 month ago

This is a smart decision overall. While they may lose revenue on impulse purchases there’s a chance they could gain more customers with this convenience. A possible downside to this is that if the CVS mobile app is the only way customers can take advantage of the curbside service, that could hinder some seniors from taking advantage of the service.

Jeff Hall
Guest
6 years 1 month ago

This is a fantastic move on behalf of CVS and underscores a clear commitment to convenience as a brand differentiator. From a service design perspective, it illustrates the power of “outside-in” thinking … creating a customer experience from the needs and perspective of customers first, then creating a seamless solution.

Ross Ely
Guest
6 years 1 month ago

Seems like a stretch for CVS as the advantages of Curbside seem much more aligned with a big-box retailer like Target as opposed to a convenience operator like CVS. Problems like parking and checkout lines are common at Target stores, but almost never at CVS locations.

One challenge will be the product assortment. With only three-fourths of the CVS SKUs available, shoppers are likely to be frustrated by the unavailability of products they want. Also, their prescriptions will not be included in this service.

Finally, CVS is also taking a risk by entrusting a big part of their customer service to a third party. Will Curbside deliver orders promptly and accurately? If there are hiccups, CVS is risking the loyalty of its best shoppers.

Joel Rubinson
Guest
6 years 1 month ago

This is the future. Simplicity will always win. It will become a cost of entry before too long. BTW, if you go to the TechCrunch piece you see the CVS ads. The dog one is annoying but will be very effective. The baby one is too esoteric for my taste and even disturbing to see a baby whizzing by.

Michael Day
Guest
Michael Day
6 years 1 month ago

It means differentiation for CVS now/today, and retail (retail pharmacy) table stakes tomorrow.

Yesterday we discussed the continued consumer lead transformations in retail, and the not so positive impact on retailers like Nordstrom, Target, Walmart, etc., cutting what they deem as no longer needed jobs at their corporate headquarters.

This CVS example is the other side of the coin, the technology-driven dynamic side of things, of operational transformation to meet the needs and demands of the technology-empowered consumer, etc., (and represents another avenue for CVS to enable one-to-one relevant, personalized conversations with its 70-million-plus active loyalty program members).

Ken Morris
Guest
Ken Morris
6 years 1 month ago
I believe ideas like curbside service are another way to begin to engage the customer in a more intimate way. It is respectful of their time and plays into the whole digital experience that consumers have come to expect. Consumers expect the convenience of ordering online and picking up at the store (BOPIS) which is beginning to sweep other segments like supermarkets and this play moves it to the drug store. Most retailers are struggling to make BOPIS an efficient process so this needs to be flawless. Retailers need to focus on making this process more efficient and curbside service would be an added convenience, if it works! I recently purchased some office supplies online for pickup in the store and it was far from efficient. It took four days for the product to arrive at the store and when I went to pick up the product it took about 10 minutes as it took five minutes for someone to wait on me at the pickup online orders area and then the associate went to… Read more »
Ed Rosenbaum
Guest
6 years 1 month ago

Good plan, just a little on the late side. Walgreens already has drive up pick up and drop off lanes at many of their locations. So this is like playing catch up in a game where everyone is far ahead. But better late than never. The Pharmacy is always near or at the back of the stores for obvious reasons. The pick up will end the time lost walking through the store and impulse buying.

Herb Sorensen, Ph.D.
Guest
6 years 1 month ago
I heartily applaud this move, but there are baked-in features of traditional self-service retail (the lion’s share of bricks-and-mortar) that are given short shrift in a lot of the thinking about these problems. To understand, you must deal with the accurate scientific description of self-service stores. The self-service store is operated by a merchant-warehouseman, who operates it for the benefit of their suppliers (at the back door.) The whole enterprise is economically driven by the unpaid stock pickers, aka shoppers, who not only come through the store picking their own stock from the “warehouse” shelves, but then manage the delivery of that merchandise to wherever they intend to use it. This stone cold economic reality explains a lot of the failure of bricks stores to effectively compete with Amazon. Amazon begins the sale of each item by serving as an algorithmic personal salesman – a process that is TOTALLY STRANGE to the merchant-warehouseman. See “Selling Like Amazon … in Bricks & Mortar Stores!” to understand the process. And that’s only the vital beginning of selling… Read more »
Matt Talbot
Guest
6 years 1 month ago

The percentage of CVS shoppers that will use this service in the immediate future is probably rather small. That being said, this could prove to be a huge convenience for certain consumers, such as parents with young children, and provides CVS with an opportunity to differentiate themselves from the competition. Moreover, it allows CVS to get ahead of a trend that is sure to gain momentum in years to come.

William Hogben
Guest
6 years 1 month ago

It’s absolutely critical to save customers’ time when doing regular shopping trips, like grocery shopping, pharmacy, and convenience. Time is the most precious and finite resource in the world, and customers will reward you for saving it. Curbside is essentially turning CVS stores into a drive-through, and it’s a great step — with the caveat that it now requires shoppers to use a mobile ecommerce interface (something few people enjoy). The complement to this is to help customers save time in the store, using mobile checkout systems — full disclosure: like those developed by my company.

Kenneth Leung
Guest
6 years 1 month ago

This is a strange one for me. On the one hand I understand it for the segment for the elderly and mobility restricted, but does the cost factor work with the size of the market? I have seen the curbside pickup at Target here in Silicon Valley and I have never seen them busy or stacked with a lot of products for pickup. I can see it useful in retirement communities where mobility is more restricted.

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Braintrust
"Smart. Smart. Smart. All you have to do to decide that this is a good partnership is to count the number of Boomers and seniors and think about declining mobility."
"Will customers who use the new service still receive yard-long cash register receipts?"

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