CVS/Pharmacy
CVS Leverages STI: PopStats™ for Optimum Location Oppotunities
CVS/Pharmacy
CVS Leverages STI: PopStats™ for Optimum Location Oppotunities
CVS is not content simply to know that 10,000 people live in a one-mile geographic area. The company also wants to know exactly how best to position a new store relative to that population and to its competitors.
The national drug store chain gains this clear-cut insight with the help of demographic reports, trade area maps, spatial interaction models, supply-demand analysis, sales forecasting studies, and regression models fueled with STI: PopStats data, its demographic data of choice.
“We’re often looking at two or three sites within a one-mile radius, and we want to zero in on the exact right spot for maximum sales opportunities,” explains Hartwell Hooper, Director of Market Research of the CVS Realty Company. “By applying variables from PopStats, like income, age, and ethnicity, to our analysis, we can do that, even at lower geographic levels — and with extreme confidence.”
In fact, confidence in PopStats data was the deciding factor in CVS’s switch from another data product in 2004. “We conducted side-by-side comparisons of PopStats block-group data with aerial views of our markets and saw that PopStats was doing a much better job of capturing population growth,” says Todd Galusha, Senior Market Research Analyst. “The data from our previous vendor frequently did not match field reports or aerial views, particularly in high-growth areas.”
Expanding Business Possibilities
CVS currently operates almost 7,000 CVS/pharmacy and Longs Drugs stores in 45 states. Despite national economic conditions in 2008 and 2009, CVS has continued to expand their square footage at an annual rate of two to three percent. This equates to 250 to 300 projects per annum, with about a 50-50 split between new locations and relocations.
“We see the slowing economy as a growth opportunity, because real estate prices are lower,” notes Hartwell. “With our bi-annual delivery of PopStats data, we can literally see which areas are growing and declining as the economy fluctuates.”
CVS is also able to see seasonal changes in specific trade areas using PopStats data, such as Cape Cod and parts of Arizona. “Some trade areas have huge spikes of seasonal population,” notes Hartwell. “With the seasonality data in PopStats, we can identify those changes and make strategic business decisions that support sales growth.”
Along with gaining confidence in its data, CVS also gained greater customer service. “Never before could we go to the source of our data with questions; normally, we were three to four layers removed from the source,” explains Hartwell. “Now we can speak directly with Robert (Welch) to discuss any issues we might have such as how he came to certain population numbers and how to use some of PopStats’ specialty data. Synergos Technologies’ unique level of customer service raises our confidence in the data even more.”
Taking PopStats Beyond Real Estate
In late 2008, CVS’s real estate division launched an interactive online mapping program powered with PopStats data. Today, the real estate division can access demographic maps and reports on demand. Several other departments are actively using the web-based tool to make strategic decisions related to individual stores, such as:
- Merchandising. Uses the demographic tool to make decisions on stocking different products in different stores.
- Pricing. Uses the population data to examine the customer mix around individual stores and make strategic pricing decisions.
- Advertising. Uses the online analytic program in a variety of ways, including determining in-store signage needs and deciding when and where to make targeted promotional offers to specific customer groups.
“We want to bring value to every part of the company, especially in this economy,” says David Hansen, Market Research Manager. “With access to the best data, other departments can also make better decisions.”
“We have been getting excellent feedback on our analytic services,” notes Hartwell. “Other departments appreciate having easy access to accurate and timely demographic information to help boost their strategic business decisions – just as much as we do.”