Wendy 00:09

Hello, everyone. I'm Wendy Liebmann, CEO and chief shopper at WSL Strategic Retail and this is Future Shop. This is where I talk to innovators disruptors and iconoclast about the future of retail. My guest today is definitely an innovator, pretty much a disrupter. Not sure if he's an iconoclast yet, I don't know him well enough, but he could be a heretic when it comes to all things retail and digital. And that's what we're going to talk about today. My guest is let me introduce him Parbinder Dhariwal, Parbs, VP and general manager of CMX, at CVS Health, where he's been since last year 2022. He is an expert in all things, digital advertising, and this fast emerging transforming ecosystem that everybody's running around talking about these days. He has an extraordinary experience in this space across media, at CBS interactive, Music, Spotify, wonderful background there that I'm eager to learn more about, to the retail world of Walmart Connect, and now CVS where he and his team are aggressively building their retail media network called CMX. About which he will explain more in a minute. Welcome, Parbs.

Parbinder 01:32

Hey, Wendy, thank you for having me. It's wonderful to see you. And great to be on the show. Thank you.

Wendy 01:38

Yeah, well, you and I think have the best hair and all of North American retail. So I'm always pleased to have a partner in fabulous here with me.

Parbinder 01:46

I'm trying to move away from the hair label. Her label is coming in thick and strong. But yes, I will agree. You do have the best hair.

Wendy 01:54

Well, thank you for that. I take that on. And please don't get away from it. You know, it's it's a good thing. I'm the red lipstick, red hair, red nail lady. So it's all right. It's not such a bad thing.

Parbinder 02:07

And I'm the gray haired black T shirt wearing retail guy.

Wendy 02:11

Yeah. Now you just also look like you've had your finger in a light bulb, which has bought all that brilliance out of your brain, which is so impressive. So anyway, another conversation about after this love fest that's going on here around hair. You have been a real gadfly lately. I must say, since I saw you in Boston I feel like you're on Ad Age’s conference and Path to Purchase’s stage and so much more. Is that right? I feel like you've been everywhere. We've been

Parbinder 02:39

busy. That definitely wheeling me out right now. But we've got a lot to talk about. And we've got a lot of noise to make. And I know that you're seeing my mug shot, you know, leading the charge around that. But the team are doing a phenomenal job in for us to deliver what it is that we need, in order to make a real imprint on this very, very fast moving growing space. That's an exciting ride.

Wendy 03:04

Well, and I had the privilege just sort of behind the scenes to meet a lot of that team, our team working with your team a little bit ago. That's an impressive bunch of brains. And from diverse backgrounds. So anyway, it's really exciting. So yeah, I was just being jealous that other people got your first but that's alright. So everybody's talking about obsessively about retail media networks. And you know me, as you've already come to know me, I'm like, wait a minute, that's so much a commercial term. I want to think about it through the lens of the shopper. And you know how shopper obsessed I am. So can we step back a little bit from that and think about the shopper, who I know is the focus of all of this. What strikes me about all this discussion about retail media is that if we take that commercial term away, it feels like we're starting to talk about more appropriately is personalization. And it just took me back years when we started to talk about one to one marketing. I mean, is that this moment now, I truly believe

Parbinder 04:06

that it is and you know, my background stems from really having the consumer, the customer at the center of everything we do. And we're bringing that ethos here as well, right. And then the way in which we build our business, the way in which we build our product is consumer first drive the business through the lens of the consumer in order for us to build much more effective products. So I think it's been closer than it's ever been in regards to sort of being this moment. As retail media networks evolve. The piece that we cannot lose sight of as as we see this evolution of retail media networks is how do we add value to the consumer through their journey within retail. And what I mean by that is if you think about the depth and the breadth that we have CVS Health and CVS Pharmacy through just even the loyalty program in which is Extra Care. So Extra Care has 74 million plus consumers, we're able to talk to them and communicate with them, be it through a digital environment or be it through the physical environment as well. We understand that consumer, we understand how they shop, we understand when they show up, we understand how they basket build, we understand the categories, they're much more focused around within our ecosystem. And the personalization concept comes into effect in order to help that consumer discover more products or see products that are much more contextually relevant. And that's the piece that retail media networks really need to double down on is providing discoverability and contextually level relevant products when a consumer is looking for products within those categories. Let me just give you one example real quickly, which is, you know, if you think about the consumer, I'm looking for a new shampoo with this hair, I consistently looking for a new shampoo. If you're looking for a new shampoo, and I come to cvs.com, and I search for shampoo, I'd want results that are shampoos, I want you to show me new products within the category that I may not have thought about previously or that much more suited to my hair type. And that's the level of work from a contextual environment that we need to build. The personalization aspect comes as a layer over the top of that it's understanding how consumers are purchasing that shampoo that propensity to buy that shampoo. And also what are the products that they purchasing when they look to buy that shampoo? And then how do we then serve that customer messaging in order for them to really understand other products within the categories that they could also basket build specifically or think about or brand build for their next purchase for their next visit to CVS or other retail?

Wendy 07:06

I've been a very loyal Extra Care member for a very long time probably since the beginning. And so you know, I understand the power of that to curate for me or let me know when there's a deal before I walk into the store. I'm always now I'm on my phone. I'm on the app, I see what the deals are. I see what promotions are going on around what I buy. What I do want more and more as a shopper of one is you also not only to sort of tell me about what's new, but to remind me about things that maybe I forgotten, or what goes with what is that part of this big reveal now with the level of data and the right media at the right time? Is that what we're also talking about here? Yeah,

Parbinder 07:49

I think there's additional responsibility for retail media networks to be utilizing the data and the assets that they have and the understanding of the consumer in order to really enable areas of their life. So if you think about CVS, and CVS Health specifically, we're a health and wellness company first and foremost. We really understand the consumers health and wellness journey as well as their beauty journey, it is very much focused and our responsibility is very much focused around, not just delivering you discoverability of products, not just helping you build basket, not just building brand awareness for for products, both from a digital and in store. But we have an enormous opportunity to help you understand ways in which you should be thinking about taking medication, reminders around medication. If we understand who you are, through your health and wellness journey, how do we deliver that level of message? How do we deliver disease state awareness messaging as well specifically to consumers that we've identified as being a high risk in certain categories. So there is an additional responsibility that does provide personalization. Personalization for personalization sake can also be a little scary, it can be a little intrusive, we've got to have as an organization and an element of responsibility around this and how we deliver the right message to the right person at the right time.

Wendy 09:24

That's so powerful because I do think about the value in the context. Now I you know, if I choose to put my hand up and say yohoo, you know a lot about now, one prescription, you remind me when it's due to be refilled, you know, my husband buys OTC X, Y and Z kind of things because he's got digestive issues. I mean, if I put my hand up and say yes, please, anything you want to let me know that will inform and help me manage our health or everyday health, whatever it is. That's okay. I would like that. But is that all about in that caring, the shopper, the consumer putting their hand happened saying yes, CVS, please do more for me is that how that has to work so you can take care of the way you're talking about?

Parbinder 10:07

It does. And the Extra Care platform allows us to do that. We're talking about certain sort of ailments as individuals and consumers. Let's take allergy as a really good example of this. I'm an allergy sufferer, I will, you know, suffer through fall, I will suffer through spring, how do we bring a level of personalization of allergy meds that are actually most relevant to you within that region, because we see that there's differentiation around pollen suffering within one region versus another. So it comes down to who we are as a brand, which is CVS Health, we're a trusted brand. Morning Consult puts us as one of the most trusted brands in the whole of America, we are very much ingrained within communities around America, if you look at our reach, we're within 10 miles of 85% of America, we are part of the community, right with the pharmacies, as well as the front store of that business, we're trusted by our consumers to provide the right level of service to the communities that we serve. And with that, we want to make sure that we continue with that trust, we empower our consumers to find and discover new products. But we also make them aware of messaging that is going to help them continue to build and lead a better health and wellness life for themselves.

Wendy 11:35

Yeah, the other thing I think about a lot is, and we've talked about this is this notion of context. So some days, I'm a busy mom, I'm taking care of elderly parents, you know, I'm CEO, I'm doing all those things. And I'm shopping a certain way. Other times, I've gotten stuff off my list. And now I want to hang around and wander, how will we know either today or in the future? What journey I'm on who I am at that moment, is that something when you think about the future of the right message to the right person at the right time, that you will also get to know that too, because of the level of data, you're able to collect?

Parbinder 12:20

How I think about consumer journey as it relates to retail, it's changed dramatically. We've seen a significant shift and change that happened during COVID. There's some behaviors that consumers have continued to adopt, for example, buy online, pick up curbside, buy online, pick up in store, or just even to have products shipped directly to their homes. It changed we saw a lot of that behavioral changes happen during COVID. But as I said that the journey the consumer journey is is fragmented. today. It's not a straight funnel anymore, it's not linear in the way that it appears, consumers need, and we provide it a level of convenience, they want the product when they want to within their own time. We're living in a Netflix generation now. And that also applies to the retail category too. And if we as a retail outlet, don't provide the consumers with the different levels of service that they require and the ways in which we can deliver product to them, then we lose that touch with the consumer. But we do provide that we have all of those services.

Wendy 13:31

You know, one of the things that I've always found interesting about this changing journey, it was some work we did five or six years ago with your former employer at Walmart when the first days of order online, pick up a store or pick up at the curb. And we would see people do that, and then park the car and go into the store and you go like why and it was because either they forgot something, or they now got those things off the list. And they now had time to go and browse and spend time on categories, they wanted hair color, lipstick, all of those sorts of things. And so to me, it felt like that uncoupling or the nuance around understanding the trip and the opportunity to say, first of all, Oh, you might have forgotten the mascara because you know, it's a while since you bought mascara. So don't forget that. Or hey, good job. Now come in and have a look at the new fill in the blank. So those sorts of things feel to me like they're becoming very rich with this data we have and this understanding of all the ways we can embrace shoppers on this journey and communicate with them which obviously is part of what CMX is all about. Right? Yeah,

Parbinder 14:38

Extra Care has been around for 25 years. So I don't want to say you were one of the first users when the but it's been around for a while. Either the depths of data and understanding that we have around consumers again around their health and wellness journey is second to none within the industry. And if we're able to use past purchase behavior and the attributes that that brings to us around understanding propensity to buy or propensity to engage with adjacent categories, it doesn't even have to be the category that you're actually coming to shop. And that becomes a really powerful tool for brands. It becomes a really powerful tool as retailers. But it also gives consumers the opportunity to see more product as well that are within that purview. And that cohorts of audiences similar to them are also looking to purchase as well. So, again, we've got to be responsible with the way in which we build our business, we've got to be responsible in the way in which we think about the consumer first and foremost. Let's not create friction points for the consumers for what they want to buy. So I'm a consumer and I drive past, you know, a CVS and I remember I need to purchase a particular product How do we get consumers to the product that they need as quickly as possible within that particular moment is the most important thing, especially given our convenience factor and the reach that we have across the US.

Wendy 16:08

The other thing that I find interesting, you brought up allergy. And because we did some work a little bit ago about, you know, when you looked at the basket for people who are buying allergy medication, generally, if you understood them, they had a pet, because they were buying some pet stuff as well. And one of the things that was always interesting was to remind people, you get allergies, you might need waterproof mascara, things that you know, do unique tissues, things that actually save you because you go oh, thank heavens for that. I never thought about that. So that contextual aspect of understanding how you can also provide relevant, whether it's discovery or need based products and solutions is the other piece that feels to me if you can keep pushing that learning and insight from all the data you have, that to me also feels like it's really powerful if you can dig into all of that. So I certainly see the opportunity and all of that,

Parbinder 17:03

yeah. And CMX then becomes not just a tool that is enabling us to target a consumer for brands, it becomes a discoverability product, first and foremost, for consumers to discover be it products within category or adjacent. But it also becomes a recommendation engine. And the recommendation engine is something that we are very much attuned to in our daily lives. It doesn't matter whether or not we are browsing a CVS store, or whether or not we're browsing a streaming TV channel. Recommendations is part and parcel of what we do every single day and what tech has been enabling for quite some time.

Wendy 17:45

I mean, your Spotify background to me is so fascinating, because I think about what a marvelous job Spotify has done and continues to do in that space. Right? On the one hand, obviously, it helps curate, you know, my listening selection. But when I also run around and ask the 20 year olds around what I should be listening to what's new, how do I stay in that? Well, Spotify becomes in some ways the 20 year old. So that discovery kind of thing as part of that. So how does that combination of Spotify and CBS Interactive, Walmart Connect and now at CVS how has that experience that you've had different or similar? What do you see about the connecting points of your expertise in this?

Parbinder 18:31

The Spotify piece is incredibly interesting, right? Because we've coming Spotify is into back when originally formed in the 2000s. It was trying to digitize an analog industry. And there was a lot of resistance back then to that opportunity. And we're not too dissimilar in what we're trying to do with retail media networks. We're trying to digitize an analog industry retail. It's been traditionally analog, especially brick and mortar, heavy retailers, such as CVS, and we're driving that forward. And we're driving that forward with the consumer in mind through their health and wellness journey. And the way in which we can actually continue to have that consumer engage with us, not just from a product purchasing perspective, but also as we talked about earlier on the podcast is how do we give them more information to understand how they can improve their health and wellness journey as a whole. And you've got to be able to be incredibly purpose driven around that. The strategy that we drive at CMX is driven predominantly by our leadership team, we are maniacally focused on the way in which the strategy is being driven through the organization. We are one small pillar of that as we enable America to get more access to health and wellness, within underserved communities as well. So let's bring it into the digital age. Let's make show that we are serving the customer at the forefront of everything that we do, which really feeds into the overall CVS Health.

Wendy 20:08

And in some ways, because of the scale of the CVS retail piece, the broader enterprise, and the breadth around the country of communities and the local communities, you serve of all types, it feels like it's even more important than ever to be able to bring that personal understanding, you talked about, you know, allergies and pollen in certain areas. But in addition to that the needs of consumers, shoppers, patients in different communities, that CVS serves the ability rather than sort of a one size fits all message, but to be able to be sensitive to those communities feels like that's also a really powerful opportunity. And again, right media, right place, right time kind of thing.

Parbinder 20:53

Yeah, you know, let's see ourselves as that connective tissue there, because of the way in which we are maniacally focused on understanding the consumer that behaviors with their health and wellness journey, and then the way in which we can connect that to the broader be it through the shopping experience, but to the broader enterprise, and more importantly, meet the mission that CVS Health is working aggressively towards. So it's exciting times.

Wendy 21:21

Yeah. And when you think about I mean, everybody's talking about their media networks, right, which always makes me a little, you know, like, okay, whatever yours is bigger than mine kind of thing, or better than mine, or whatever. It was, like loyalty programs in the beginning, how many members do you know all of that sort of thing? So if I'm a brand, if I'm a potential brand partner, how do I come to how do we need to think about things? How do I need to sit down? This is sort of the pitch opportunity. But I'm curious, how does it work for me as a brand to come to CVS and say, Okay, here's what I'm trying to achieve? How do we do this? How do I bring my data, your data, my customers, my shopper segments? I mean, how do we do this?

Parbinder 22:03

Look It's a great question. I'd look, recently there was a Walton Business School report that stated that there's over 600, retail media networks. So as a brand, I'm already my head spinning, right? Where do I double down on working with one retail Media Network versus another? Look, there's been a clip proliferation around retail media networks across retail entities, there's a big move, because of the way in which retail media can be that connective tissue and drive that engagement with the consumer, and help and enable brands to really build a level of discoverability around their product sets at that particular retailer. The defining moment for retail media networks is around ultimately, how do we perform and perform can come in many, many different aspects. That performance for me is around how do you drive incremental value to the brand at the said retailer, in an ideal world, now, there is an opportunity to be thinking about and there are some sophisticated brands out there in how do we drive incremental sales, but be it across all retail, because we're not immune to the fact that we may deliver a message to a particular consumer being in an off site environment. And that may trigger a purchase decision at another retailer. Let's call that out. But we want to make sure that as best we possibly can, is that we get credit for that. But the relationship that we consistently have with our consumer, the personalized approach than which we will take in order to communicate with that consumer shows a very clear understanding that we know that that consumer is in market, they have a high propensity to buy a certain product, and they are purchasing that product. And mostly they are purchasing at CVS, there are going to be times when they may not. And I think that's going to stand out the retailers with a retail media network that are going to survive, and those that are not will also help make choices for brands that little bit easier as well.

Wendy 24:08

I think a lot about return on engagement, and building that relationship, and then ultimately return on investment. But when I think about it, you're the example you just gave. So I build a case, I connect with a shopper, patient, whomever in the store for a brand, they may go somewhere else but to your point, if I get credit for providing the right information and the right context, then is the ideal that I do get credit for that? And they come back to me again next time and hopefully for whatever reason they didn't buy from me now they do buy from me. I mean, do you think about it that way as part of building engagement, loyalty, I'm, you know, I worry about the term loyalty but building that level of engagement.

Parbinder 25:06

Yeah, I think engagement is incredibly important because engagement clearly states, it's not just we are delivering a message to the consumer, the consumer is actually delivering feedback to us too, right, but positive sentiment or even potentially negative sentiment as well. And we need that level of engagement back from the consumer. And that's got to be at the core of what we do. And that's going to stand us out above anybody else. And to take the engagement to the next level as well. We also need to ensure that we're engaged in helping the enterprise and the business really understand what CMX can add as a value to the overall organization. And we work really closely with our partners from across our business in merchant organization, as well as other parts of the organization to truly drive more engagement for the consumer, that's going to be important to stand out, again, retail media networks from like the really good media, retail media networks, they're going to get traction versus those that are not. The last thing that I was saying, I will continue with the engagement theme that we've established here is, we want to make sure that we're as we're building CMX out, and whilst CMX has been around for three years, we're really accelerating a lot of the growth now and the investment within the business, we also want to make sure that we have engagement from our supplier community, because we can't build something that we think is just right for us. With building something that is right. In order to grow the business, collectively, we are asked, and sometimes it's difficult to hear it right the feedback that we want from our suppliers. But it's really important, it's important, it makes us better, it makes the industry better, it makes our service to the consumers better. It helps us deliver much more personalized messaging, and I have a phenomenal team behind me, I'm incredibly proud of all of the stuff that we have done. And just in the last seven or eight months that I've been here, you know, we are open to listening to all of our suppliers, we're listening to our consumers and what they want as well. And, and that will just, you know, all boats rise together. So that's how we feel the industry should be moving forward. And I think that's what sets us apart from a lot of the other retail media networks in this space.

Wendy 27:32

I mean, it certainly feels like we're in fresh waters, new waters. Some other analogy, I guess, whatever it is lots of learning to be done here. And you have the luxury, but it's a huge investment that CVS has made over the years in this primary data that you've got first party data that gives you the leg up and so much of that I would expect but as we wrap this up, can we just talk for a minute dream a little bit about what do you think this all means? You've seen this over the arc of your last whatever it is 10 years in different organizations… How do you envision the future of the retail experience based on all this work you're doing? You know, through the lens of the consumer as shopper? How do you see it? How do you want to see it over the next 2, 3, 4 years?

Parbinder 28:18

I think the most important thing for us is to as a retail medium network is to continue to build experiences that engage the consumer that add value to their shopping behavior and the way in which they engage with CVS. So let's not create friction, if we want to create conscious friction in that journey, let's really signpost that. Most importantly, it's about delivering engaging mediums by which we can talk to our consumers in order to enable them to understand different products at CVS. As an industry, we've got to make sure that we also are not losing sight of some of the standardization conversations that need to happen. There is a need for standardization across measurement as retail media networks we're all measuring our results in many different ways, ROAS is one metric that the industry adheres to. It's not necessarily the one that supplier partners are leaned in on so let's come together as really bring a level of measurement standardization across the entire industry. The biggest area that I would like us to dreaming a little bit bring to the forefront is how do we expand beyond the front store and OTC products? How do we think about really bringing together that connectivity of our front of the store and the back of the store? How do we help consumers build awareness for be it through it's through vaccine adherence or disease state awareness? There's a huge opportunity for us to be not only a thought leader in this base, but more importantly, really help the consumers get what they need and understand what is what is out there within the marketplace and drive that level of education. So this is something that's really key to our business as CVS. And you know, hopefully, we'll look to deliver against that over the course of the coming months.

Wendy 30:19

That feels like a perfect way to wrap this up. Because I really do even though I tease you a lot on others about retail media networks, which just sounds like a money thing. The ability to support and engage the consumer, as they buy, spend money on goods and services, take care of themselves, their families, by creating an easier way to do it with so much else on their plates these days, and so much stress, and the ability to think about that and give them the tools and engage them at the right moments that Walmart used to talk about the right product, the right price, right now. Yeah, that's one thing on the list, but it's also in the right moment. For me, I do feel it's my cynicism, aside from a shopper perspective that this is a moment when the one-to-one thing starts to feel quite real quite in our vision. So it's very exciting. So I'm excited to follow on the journey, as the shopper advocate make sure that shoppers are feeling truly engaged in all this. So thank you so much for joining me today. I know you've probably got your media tour that continues. So I'm honored to have you in my little home.

Parbinder 31:29

Wendy, thank you, I truly appreciate the opportunity for us to not just talk about, you know what we're doing at CMX and this incredibly exciting stuff. But, you know, for us to just level set as well around what is happening within this industry. So fast moving industry. I'm incredibly proud and honored to be part of CVS and part of this industry as we move it forward. But thank you again, it's been an honor.

Wendy 31:53

Oh, it's a pleasure. Anytime. Thank you Parbs. So Parbs really set it. So clearly, this notion of care for the customer care for in our world, the shopper in all of this. Yes, of course, it's about selling more. I mean, why are we all in business, but to make money here to support our families and our people and all of those things. But the only way to do that is to work with both brands, partners. And to take great care of how this information, this data and this messaging can really engage the consumer as he called them in delivering the right product, the right service, with the right level of information at the right time. And I think in this day and age, particularly for all of us who are so incredibly busy, we know all our data is out there or much of it. But if it's going to be out there, we want it to be used in ways that is meaningful, and purposeful, and makes our lives easier. And then gives us either a moment of, as he talked a lot about discovery, or a moment to take better care of ourselves. Because there's somebody there helping us think about the things we're not thinking about that we should, or we would if we had time and the knowledge and engagement. So all this discussion about retail media networks and creating a framework which he so clearly said this is an industry emerging and needs guidelines and consistency. But it also is fundamentally in place to serve the needs and level of relationship building and engagement with the consumer and in our world as we would call them as with the shopper. So I'm encouraged. I'm excited to see where all this goes. This is new territory. I am encouraged as a shopper to make sure that somebody else helps me think about things I'm forgetting about and gets things off my list and shows me things that are new and interesting and different at the right moment and the right time. That's encouraging to me and I think this is you know, new territory and territory that as brands and retailers we all have to tread carefully on. So a lot of money out there. But there are a lot of consumers and shoppers who really appreciate the help if it's done in the right way, as he said with care. So that's a vision for the future of retail, and I'm looking forward to following it. So see you in the future. Cheers for now.