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We had a story on Friday about how CVS Health is rolling out what it calls a "suite of new digital tools aimed at helping customers manage their health with more ease and efficiency." But, I wrote...

I think all these things make sense ... that technology obviously can be a powerful tool in creating loyalty among shoppers who can use it in their own best interests. But ... I also think that CVS could help itself out a lot if it actually maintained a better in-stock position in some of its stores. I've had occasion recently to spend some time in my local CVS, and I've been amazed the degree to which, in some departments, there are a lot of gaps on the shelves. (I tried to point this out to one of the managers, who decided to argue with me about it. This sent me across the street to the much smaller independent drugstore, where they had what I needed.)

I have no idea if this is true, but purely from a consumer perspective, it certainly feels like CVS has reached a tipping point ... and that it is so big that it is not taking care of the basics. I've done some anecdotal research on this, and I'm not the only customer who feels this way.

It is great to have all sorts of fancy tools in your toolbox. But it sees to me that you've also got to have a hammer, screwdriver and a wrench. And this is a lesson worth learning by every retailer.


One MNB user responded:

Great comment on CVS today.  I just don’t understand the logic behind all of their out of stocks.  I have emailed their district manager a few times and received no response.  It is like that in every CVS I have visited.  Inventory control?  Poor auto replenishment?  Very frustrating from a consumer standpoint.

And another:

I totally agree with your assessment of CVS in not taking care of the ”basics” before launching into more sophisticated consumer tools to generate loyalty.
 
In doing business with CVS, as a supplier, over the past few years, they have demonstrated a very inconsistent focus on in stock. At points it is their highest priority and they KPI the heck out of it with their store associates to insure compliance and at other times they simply lose focus and this manifests itself into significant OOS at store. I was in this week to purchase a specific skin care item and they were out of stock so I went across the street to Walgreens who had it in stock. Store Managers really only have two levers to pull, one being store labor hours and the other being store inventory. More than often they pull back on the inventory level to manage costs.
 
I will also say that the CVS store culture is different than their competitive set. Walgreens works very hard to hold onto good to great store associates and the impact of this is a significantly better customer service experience than you will see at CVS who have a lot of part-time talent who care less about the company than folks you will meet in a CVS store (such as your experience with the store Manager). We spend a lot of time with CVS speaking to them about poor store compliance and the cost to us and to the consumer who more than half the time will go elsewhere if they can’t find the product.
 
It seems basic merchandising but they struggle to grasp this simple premise.


This explains a lot.

And from still another MNB reader:

I did some research in 2003-2004 that confirmed what you said in your post about CVS. They had too many stock-outs. Walgreens at that time had a slightly better method of tackling stock-outs that involved physical counting of the "holes" on the shelf to keep an updated stock out position, in addition to an inventory management system.

It seems that not much has changed in CVS over the years! They have some attractive promotions, but there is an even greater chance that items on promotion will be out of stock and it is a very frustrating experience.

A clean, well-stocked store, with fast and friendly service, is the first requisite, everything else just adds to that experience.

KC's View: