CVS Uses Your Data to Sell You More
As a merged company, CVS Caremark has access to more of Americans’ most private prescription information than just about anybody: One in two people in the United States now receives prescription or health services from CVS Caremark, and the company’s computers contain data on 30 percent of all prescriptions in the United States, over 1.2 billion prescriptions per year.
The company has even more information on its over 50 million ExtraCare card holders, who scan their cards when they shop at CVS in order to get discounts and “extra bucks” redeemable for merchandise at CVS. Nearly two-thirds of CVS’s non-pharmacy sales are made with the card. CVS says ExtraCare is the biggest retail loyalty program in the world. And it is growing, partly thanks to the CVS-Caremark merger. The company has recently issued 4 million ExtraCare cards to people whose pharmacy benefits CVS Caremark administers. The company expects to issue another 6 million next year.
CVS uses this intimate knowledge of customers’ purchases to “migrate customers from low-value behaviors to higher-value behaviors” – meaning buying more at CVS. As CVS’s CEO Thomas Ryan said, "We know the customers who are coming into our store to buy beauty, but aren't buying OTCs [over the counter medicines]. … We know who's coming in for photo, but not using the pharmacy, and we can target [those customers] with special mailings and customized offers.”
That could include promoting CVS brand over-the-counter versions of drugs to patients or making “disease-specific” discount offers to patients. For example, a patient with a diabetes drug prescription could start receiving coupons for products that may help diabetics – or even get a pitch for those items on the phone when calling to refill a prescription: “They may get the prescription for diabetes, but there may be eye care or foot care products that they should consider,” said CVS CFO David Rickard. “And what if we were in the position when the order came in to call up and say, you know what, often people with your disease states need these OTC (products). We have them available at these reasonable prices, would you like us to throw them in the bag?"
