CVS Turns First-Party Data Into Retail Media Power Play

Watch more: Retail Media as the New Growth Engine: How CVS Is Merging Data, Loyalty and the In-Store Experience

When most people think of CVS, they think of prescriptions, cough drops, or perhaps those famously long receipts.

But those receipts, and every other customer touchpoint from the pharmacy counter to the mobile app, each represent something collectively much larger: the future of retail media.

“If you think about what retailers have in terms of a relationship with the customer, they have information through transactional data or loyalty data or otherwise. They also have actual purchase behavior data,” Parbinder Dhariwal, VP and General Manager at CVS Media Exchange, said during a discussion hosted by PYMNTS CEO Karen Webster.

“That relationship plus the loyalty plus the transaction data really sets retail media apart from any other medium. Not even social media is able to piece all of those constituents together,” Dhariwal added.

It’s a convergence, Webster noted, “that bridges digital engagement and the in-store experience.”

And while retail media isn’t new, its modern incarnation has become one of the most potent forces in marketing. The premise is simple: retailers with first-party customer data sell targeted ad opportunities to brands eager to reach shoppers at the point of decision.

Turning First-Party Data Into First-Mover Advantage

With 90 million addressable consumers in its dataset spanning beauty, health, wellness and personal care, CVS sits atop a trove of information that captures not only what people buy, but how often, and in what combinations. That “connective tissue,” allows CVS to offer advertisers a uniquely holistic view of their customers’ journeys.

“We know that there is a consumer who comes into our store environment and buys a certain type of lip gloss monthly. We know they’ll never change from that brand,” he said. “But we might also know they switch facial cleansers regularly — maybe due to price, maybe due to influencers. That consumer is primed for brands in the facial cleanser space.”

For marketers accustomed to the open web or social media, where identity resolution is increasingly opaque, CVS’s data clarity can represent a new frontier in precision marketing — one that can deliver both personalization and performance.

“When we’re messaging to a consumer, we’ve got to make sure that message is joined up across all the different touchpoints,” Dhariwal said. That means balancing personalization with restraint: “Personalization not being over-frequency and message is really key.”

The goal? Create a blend of online discovery and offline fulfillment that leads to a self-reinforcing loop of engagement, one that can be measured and optimized end to end.

Building for the Enterprise, Not the Silo

One of the most nuanced parts of the retail media equation is managing friction. Not just in the customer experience, but across internal teams and touchpoints. Consumers may not distinguish between a loyalty email, a retail media ad, or a promotional text, but the organization behind them must.

“Retail media needs to fit into the hand that fits into the glove of the retailer,” Dhariwal said. “You’ve got to truly understand the retailer and the consumer journey within it, then see how retail media supports that journey.”

Earlier this year, CVS launched a “tempo strategy” under the internal mantra Approach One CVS, Approach One Heart. The initiative, Dhariwal explained, triangulates three internal pillars (the merchant organization, the marketing organization, and the retail media network) to ensure harmony. For major events like CVS’s Epic Beauty Event, merchandising defines the offer, marketing crafts awareness, and retail media amplifies the message across digital and physical channels.

After all, while CVS’s digital reach is vast, the physical store remains the company’s beating heart. Every day, nearly five million customers pass through CVS locations.

One example: at roughly 2,000 CVS locations, waiting-area screens near the pharmacy serve as miniature media networks.

“Average dwell time at the pharmacy is about three minutes,” Dhariwal said. “That’s a prime opportunity for brands to build messages for consumers and push them back into the store and into the aisles.” Because the pharmacy counter is often at the back of the store, the path to exit doubles as a corridor of potential purchase. Dhariwal has seen “really strong success in sales uplift and incremental sales through those screens.”

“We’re not totally married to the idea that consumers will buy only at CVS, even if they’re ExtraCare members,” he added. “We’re seeing tremendous success using our data to help brands drive total market growth.”