Will CVS build on its COVID-19 test momentum?
While the novel coronavirus pandemic has been rough on retail as a whole, retailers in specific segments have found opportunities. One of those retailers is CVS, whose COVID-19 testing has brought an influx of new, first-time customers to the pharmacy chain.
CVS reported having administered two million COVID-19 tests by the end of July, with 40 percent being performed on first-time customers, according to Fortune. Many of the tests were scheduled through CVS’s COVID-19 website or app. The chain also launched a B2B COVID-19 testing service for which it has 40 clients with hopes to expand that client base to 1,000.
Success in becoming a go-to testing spot comes against the backdrop of otherwise slow retail sales; while CVS stayed open for the duration of last quarter’s lockdown, the chain still experienced a 4.6 percent decline in sales of non-prescription products.
This month CVS has taken further steps to make itself a COVID-19 testing hub. The pharmacy chain announced a partnership with Salesforce to utilize its Return Ready COVID-19 program on its Work.com safe workplace management platform, according to ZDNet.
CVS’s boost in traffic comes at a time when competition is serious in the retail pharmacy space.
Amazon.com’s 2018 move into prescription drug delivery with the acquisition of PillPack set off a flurry of improvements from leaders in the space hoping to stay ahead of the new competition. Walgreens launched a partnership with FedEx to offer next-day delivery nationwide by December of that year. CVS, which was already offering next-day and two-day prescription delivery at the time of Amazon’s PillPack acquisition, shrunk the window even further, announcing the availability of same-day delivery from 6,000 locations via the Target-owned Shipt in April of last year.
The circumstances of the pandemic have not been entirely kind to the retail pharmacy space. Walgreens reported a $1.7 billion loss over the most recent quarter as customers opted to shop at traditional grocery stores rather than its drug stores for essential supplies.
- COVID-19 testing is helping CVS Health win new customers. But can it keep them? – Fortune
- Will Amazon, CVS or Walgreens win the speedy RX delivery race? – RetailWire
- Salesforce, CVS Health combine return-to-work solutions – ZDNet
- Walgreens lost $1.7B in 3Q as global pandemic tightened grip – ABC News
DISCUSSION QUESTIONS: How can CVS hang on to first-time customers that came in for a COVID-19 test? Do you expect the chain to come out of the pandemic in a stronger or weaker competitive position?