Need to Know
- CVS expansion plans will focus on customers by expanding its HealthHub concept, consolidating tech and data operations, and improving customer service with robotics and AI centers of excellence.
- Full-year revenue for the pharmacy increased by 32% to $256.8 billion.
- CVS recently completed the acquisition of health insurance company Aetna in November 2018 for $69 billion.
- CVS has more than 9,000 pharmacies across the US and fills more than one billion prescriptions each year.
As a concerted move towards being a digitally forward, customer-centric business, CVS announced several tech advancements in a recent investors call that will lower operational costs, improve customer experience, and consolidate their data and technology efforts.
After its recent acquisition of insurance company Aetna in 2018, CVS saw a 32% boost in yearly revenue to $256.8 billion. This acquisition was the biggest in 2018 (coming in at $69 billion), but also the biggest health insurance acquisition of all time: opening the door for Aetna’s 32 million health insurance customers to CVS’ in-store pharmacy and health treatment facilities.
CVS also doubled down on supporting customer health goals through its HealthHub concept, which turns 20% of the stores into a health treatment, seminar, or insurance navigation area. CVS plans to expand this concept, which blends pharmacy, insurance, and store, to 1,500 stores by 2021 as the pharmacy is seeing great sales on the higher margins of health services. Not only that but after abandoning cigarette sales in 2014 (and strengthening its value proposition as being the only pharmacy to do so), CVS has seen its revenues grow steadily.
Two of CVS’ goals going forward include creating a consumer-centric technology infrastructure and modernizing their enterprise functions and capabilities.
Larry Merlo, CEO of CVS, said “As we continue to innovate and execute, we will stay close to the markets we serve and respond to the needs of our clients … And with our convenient and local touch points in place and with our advanced data and analytics, we have the ability to creatively and efficiently deliver local personal high-touch care with new products and service offerings coming to market.”
As a continuation of its consumer-centric mission, CVS is also looking to develop centers of excellence for data and robotics, move its technology to a hybrid cloud environment, streamline the number of enterprise applications, optimize call centers with AI and robotics, and use advanced data and analytics to enhance workforce-management tools.
The company also announced a series of leadership changes, including a previous Aetna leader moving to lead the transformation efforts, that might boost their transformation into a digitally forward, customer-centric health and wellness behemoth.