In this episode:

Wendy Liebmann WSL’s CEO and Chief Shopper talks to Mara Sipzener, General Manager of Loyalty at CVS Pharmacy about what’s driving all the recent activity and upgrades to retail loyalty programs.

They discuss:

  • What shoppers expect to be loyal today
  • Why CVS, Walmart, Target Bath & Body Works, and others have upgraded their programs recently
  • How loyalty programs need to focus on not only delivering affordability (discounts) but also convenience and personalization
  • How the new shopper journey (and all the many touchpoints) needs to be part of a meaningful program
  • Best-in-class loyalty programs (a hint: REI is one)

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Watch the video episode:

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 iconoclasts, about the future of retail. Today, the topic that's on my mind is retail loyalty and retail loyalty programs, and thinking a lot about is this notion of loyalty and dream. Is it a reality? I don't know. There's a lot of conversation going on at the moment. And a lot of retailers who are in the midst of or have announced that they have three launched their loyalty programs from Walmart or Target to Bath and Bodyworks to CVS. And I'm trying to figure out what all this means. Why is it happening now? What do shoppers want? Is this a sign that retail engagement, dare I say loyalty will be more important than ever, in this very fragmented digital age. So my guest today is an expert in all things, loyalty, who will make sense of all of this, she is Mara Sipzener, she is the General Manager of Loyalty at CVS Health, she has been a leader at on the Extra Care team at CVS for a number of years, six-ish years. But even before that, she's worked in businesses as diverse as food and beverage at Dunkin in jewelry at Alex and Ani. And she has this sort of broad view of building customer and brand relationships, engagement. And I think that wealth of knowledge gives us a very interesting perspective. I know it will be on what's going on here. What are consumers and shoppers really want in this world to build engagement and loyalty. So thrilled to have you here today. Mara, welcome to Future Shop.

Mara S. 02:03

Thank you. I'm very excited to be here. Thank you for having me.

Wendy 02:06

So you know, you've worked in this loyalty space for some time, why do you think we're seeing all this activity now?

Mara S. 02:15

It's been incredible to see the customer shifts and expectations change over the past six years and an Extra Care we've been focused on evolving with them Wendy, we're seeing shifts in what customers expect and what they want. And I think that's why you're seeing loyalty programs transition with them. So we're seeing customers relentlessly focused on affordability and convenience, convenience, through saving time and simplicity, easy in and out, easy, quick service personalization. And we've made changes with Extra Care to meet them where they need to be and to meet these needs. And I think we're seeing it across the market. simplicity and ease is super important for the customer. You mentioned, loyalty programs changing. Customers want their programs to be easy, and they want their retail experience to be easy. We made a change recently with Extra Care. We went from four loyalty programs to one loyalty program with two tiers following on that important trend. And so I think what we're seeing is really going back to the needs and customer shifts, and how programs are migrating with it. Yeah.

Wendy 03:23

And it does feel to me, and you know, this sort of people shopping in so many places, right? Every every street corner, every digital corner, there are so many places that people can buy goods and services, whether it's health and wellness, beauty, food, beverage, fill in the blanks, jewelry, any of those areas that you've you've worked in coffee, I was thinking about Dunkin and Starbucks and all of these, these, you know, this lens that you have, which is really interesting. And so that's the other piece to me when I think about a program like Extra Care, which actually was one of the I don't know, first I was aware of when we all had little tags on our key rings and things. It feels to me like in this fragmented world, that ability to engage the consumer as shopper becomes more and more important. And is that your your sense of that now?

Mara S. 04:19

Yeah, absolutely. So you mentioned you know, Extra Care has been rewarding members for over 20 years. And so I'd like to think that we've shaped actually a lot of what you see and loyalty programs across the market today. And so we've had our own evolution and how we've engaged our shoppers, as our member needs have changed. And so I would say that we've listened relentlessly to our customer, how they want to interact with our program. And so we've evolved along the way too. So for example, a couple of years ago, our customers had told us our base benefit of 2% back which we reward quarterly they wanted it immediately. They didn't want to wait so So we made it instant, we made it instant for those who want it immediately. And then we pay it out quarterly for those who don't. And so we're evolving and reacting to a customer's. Yeah.

Wendy 05:10

And it does feel to me when I look at the range of loyalty programs, because the discounting side of loyalty programs to your point where you can save, but there are other benefits, it seems that that loyalty programs are adding in now including CVS, how do you see those beyond the kind of discounted structure of you know, sign up and save money kind of thing? Yeah,

Mara S. 05:35

I would focus us on customers need for convenience. And we're seeing a huge push for it. Convenience in I want to be in and out, I want a simple experience, I want it to be easy. And so some of the important announcements that we've made recently with Extra Care Plus, same day delivery being free. And so free shipping purchases, over $10. And so those are those are important changes that our customers are talking to us about and but just to build on it for a minute, affordability and value will always be critical. And so yes, we are all building on top of it. But that concept of making life more affordable. And bringing more value to customers is not going away, making it more personalized and making sure that it's the value for Wendy. And that it makes sense. That's where, you know, that's where critical focus is.

Wendy 06:36

So when at CVS and CVS Extra Care, I think about for me, it's like gaming, because I'm always trying to see how much I can save and trying to get down to be zero, right? I get it all for nothing. I haven't quite done that yet. But I do think about the other thing, somebody's sick now I want something delivered, I'm sick, I want the prescription delivered, like now. So those levels of other value, which isn't just about price or savings. Have you seen that that added value proposition become more and more important in addition to price? Yeah,

Mara S. 07:14

absolutely. And you see it within Extra Care Plus our membership program. So you get free RX delivery, there's 24 hour pharmacist helpline, which is absolutely what our customers and our members are looking to CVS for, and so on top of value that is turbocharged and very in the convenience that I mentioned with same day delivery, and shipping from That pharmacist helpline and that RX delivery is really critical.

Wendy 07:43

When I think about really good loyalty programs. I always think about it really is about engagement and building that relationship is the role of the people in the store the physical store in this and I think about retailers like REI, where the people are the brand and you become a member of their cooperative, if you will. That kind of relationship of the people on the ground in a CVS store, what role do they have to play? Or what role could they play moving forward? Yeah,

Mara S. 08:18

our colleagues are critically important. And I would say they're critically important to building the relationship with CVS as a whole. But as it pertains to loyalty. They are absolute frontline. And so our colleagues enrolled members into Extra Care and Extra Care Plus, they enroll our patients into reward Extra Cares rewards at the pharmacy so they can earn on filling scripts and getting immunizations. They help our customers navigate the best way to get value at CVS, they walk their customers through the app experience. Because if you're in the CVS app, it is the absolute easiest and best way to navigate the loyalty experience. And you can track your earned rewards and you can find your personalized deals. And if you receive an offer and email, you will see it in your app. And so our colleagues are the ones that are helping customers understand exactly what you mentioned before, how do I get the most affordability it is our colleagues that are helping my favorite stories that I hear are the stories of how our colleagues have helped our customers and our members save money at CVS and their incredible stories, a colleague that will say “Are you sure you don't want to join Extra Care? Do you know that if you're an Extra Care Plus you will save this amount?” And we hear that feedback from our customers and it makes our customers happy. It makes them trust our store trust the experience and so I absolutely agree.

Wendy 09:52

I was having a passport photo done. And the fellow who was at the front was taking my picture. He’s very nice. He said that picture is actually not great. Let's try it again. Thank you, because I'm gonna live with this for 10 years. And he said to me, actually in Care Pass in the day now it's Extra Care Plus, I think, and I said I don't know, I thought so he said, I don't know, I think your credit card, something happened maybe. And he said, you know, there's a benefit to that. And it didn't feel like a pitch. And I thought, well, there you go. The other thing you've mentioned a number of times is this issue of personalization. And one of the things that strikes me about all of these programs, CVS and others, is that the really good ones get to understand who I am. And that level you were talking about convenience before convenience is giving me what I need, not what you want to sell me. So how does that come now, that ability to personalize what I want what I've been buying the services all of that? Yeah,

Mara S. 10:53

I couldn't agree more, what we want is for you to open your email and see an offer from CVS and say, wow, they understand me that the shopping experience that the offers that you're seeing, and the experience that you're seeing is tailored to what makes sense for you. And it's totally ingrained in the Extra Care program. You know, through Extra Care, hopefully, Wendy you've signed up. And one day I'm sure you have to receive to receive our email offers to receive opted in for SMS. When you open the CVS app, the deals that you're seeing there are absolutely curated and personalized for you. And the goal again, is that that when you see that you say CVS understands me as a shopper, and we are making your life therefore more convenient, simpler and more valuable.

Wendy 11:44

So when you look at the retail landscape beyond the direct competitors, you have who's doing a good job at this?

Mara S. 11:53

You know, it's an interesting question, I would, I would broaden it beyond personalization and talk about loyalty in general. And my favorite example that I always give is souls, I'm an avid SoulCycle. Use it. And what I love about SoulCycle is the environment and the community they foster. But it's personalization and how they know me and how they celebrate me as a customer and my direct experience with them. And so the example that I often think about is when I hit a milestone, they are shouting it from the rooftop, and they are making me feel like a rock star. And so that in turn, pulls me back in. It pulls me back in. So I don't have that experience when I exercise someplace else or it go someplace else. But when I walk in, they know me they know how often I've come they acknowledge it, they talk about it, they celebrate my birthday. And so it's that personalized experience that really pulls me back in. It

Wendy 12:56

does talk to this sense of community, right. And that level. That's why I'm always talking about retail engagement, as opposed to retail loyalty. But that sense of my store my place, as you just said that. That is the part that I think is the secret sauce to all of that. That's a great example, the SoulCycle one of you want to be part of that. Right? Yeah.

Mara S. 13:22

And it's that excitement, you know, that I mentioned before the colleague that is in genuinely interested in helping you save money and find the best value and affordability at CVS, or the colleague that is genuinely interested in you not having a bad passport photo. You know, so that's what really differentiates. Right?

Wendy 13:42

Yeah, I think the other thing I you know, I'm asking myself this, the other thing that I find intriguing about what I would call good programs, are the surprises. So for me, American Express Platinum, sorry, that's a bit fancy. So I don't mean to be too precious here. But, I mean, obviously, you pay a premium for that. But they keep adding these little surprises, like you get, you know, free ClearPass at the airport, because they know I obviously travel a lot on business and life and stuff. You know that Uber $15 A month free to go like, Oh, look at that free. You know, whatever. If I did the math, it's probably not free. But over and all it's the sort of a little surprises that you get along the way. Do you do you think about that, when you think about? Is it the people who create the surprise is that the offers that are surprises? How do you build that into a good loyalty program? Yeah,

Mara S. 14:38

and I actually second year, your feelings on Amex Platinum. And one of the things I would actually add to your list of examples is the feeling of they have your back if something goes wrong, and it's an intangible, but they have your back in that and that's the trust With that's the trust built with Amex Platinum, and hopefully the trust that our members feel coming into CVS as well, which is an across our total store, obviously, which I do think is so, so connected to that experience with our colleague, we talk a lot about surprise and delight. And I think it actually can be connected to value and it can be connected to value in personalization, which is wow, they got it right. This feels great. And it's our personalized, it's our personalized rewards that come at you which are, which are intended for you. And so I think it's just that little extra, something that helps us build engagement.

Wendy 15:38

And I do think about that, in the, in the sort of connection of understanding that I'm almost out of something. You know, that sort of figuring out “Oh, she probably is almost out of her mascara or her, whatever, L'Oreal skincare” or whatever it is. And here's kind of the incentive for that, which does make me feel like it's personalized, which is intent, no doubt. One of the things that I know over the years with Extra Care, and I see this with other really good programs is that amount of knowledge you have about the customer, the shopper, and how you partner with brands, and companies to support that. Is it different now, when you think about building those relationships with a shopper? And the brands that you partner with to do that, as well as all the services that you offer? Is that different now than it used to be six years ago, when you started all this? Yeah,

Mara S. 16:41

we have over 74 million members enrolled in Extra Care. And we know our members really well, you're right. We appreciate our brand partners, we create promotions, in partnership with our partners that are meaningful and a true win for all of us. And so our brand partners get exposure to those the 74 million members that they wouldn't normally reach, our customers get to access savings and opportunities that are tailored for them and bring them immense value. Our customers win, and our partners win and in turn, our customers returned to our store. And so that's the powerful engagement model of loyalty, I would say that as our personalization has evolved in our, our the way we've been able to bring it to life with brand partners as evolved as well to

Wendy 17:27

talk about the app, and the technology that makes people's lives easier. those touch points of order online, pick it up in the store, you know, see the deal on the app set up an appointment at the clinic, all of those things. There's a lot more going on now. So how do you look at that journey in terms of shoppers and their life, and how they come now to approach a loyalty program?

Mara S. 17:59

Yeah, we need to be everywhere where our shoppers and I'm thankful that we have an incredible digital team that is always building out an incredibly engaging digital experience for our members. But we need to be everywhere where our customers are. And so our our shoppers are doing a lot of the legwork outside of the store and the digital experience and often coming in the store to complete their purchase. And so from a loyalty standpoint, we need to make sure that we are integrated everywhere our customers are so for that complete Omni experience that you're discussing, Extra Care is in it with them. And so you can enroll, earn, redeem it across those channels with Extra Care, which is critically important to us. So again, as we build out that that omni channel experience, you're gonna see Extra Care and Extra Care Plus there along the way. And I mentioned earlier, same day delivery. And so that's a great example, you know, same day delivery as our customers are looking for the added convenience through a program like that, that is a core benefit of Extra Care. Plus,

Wendy 19:05

what's so interesting about that is because the notion of my local drugstore in every corner, right, so the accessibility, I was just actually having a coffee with somebody. And we were talking about convenience today and the sort of redefining it. So that location up the street from me here is sometimes convenient if I'm having coffee with somebody, but sometimes it's not. And so, you've obviously been thinking about how to define convenience in that offer differently. Right? And isn't

Mara S. 19:37

that the beauty though? So from from a extracare standpoint, you can engage with our program if you don't want to leave your house and you would like your product brought to you if you're shopping online late at night and you'd like to place an ecommerce order or in the morning on your way to work if you want to pop into the store. And so, and I think it's that consistency of experience the ease and simplicity have the experience, no matter where you're choosing to have it, we have to meet you where you are.

Wendy 20:04

That's, that's the thing that to me is sort of flipped some of this notion of what convenience is. And the value proposition is now, just because I'm, you know, three blocks away, or near the subway stop doesn't necessarily mean it's convenient for me all the time. I love the idea of 11 o'clock at night, because that's so often what I'm doing my shopping is most busy working people are. Exactly. A kid, a dog, a family, somebody, somebody out there who needs something, oh, gee, I forgot that 11 o'clock at night. You've had this five or six years, six years you've been in this role, and the other experiences you've had and now, okay, this new program has launched, although refined program is launched. Where does this all go? I mean, what's the what's your vision for CVS loyalty in the future? What are you going to do tomorrow,

Mara S. 20:59

we are going to continue to listen to our consumer one day, and we're going to continue to follow these trends. We will have a relentless focus on simplicity and removing any complexity from our program, we will have a relentless focus on that affordability and bringing value and convenience to our consumer. We will continue to evolve and develop personalization so that we continue to deliver you that experience of wow, they understood me and they drove me into store. And we'll make it fun and interactive. And so I think that as these two way conversations with our members continue to evolve. I'm excited where that takes us.

Wendy 21:43

I think the fun. Will you just you know when you said fun there for a minute. I mean, fun for me is right. There are other programs. I'm part of that that's not of interest at all. So fun. Boy, do we need that right? I mean, in life. Yeah. All of these things now and the ability, it is that brand engagement. Yes. Who do I trust? What is my place? Who gets me? And occasionally, how can I have a laugh about all of this, you told us about SoulCycle and your best loyalty experience any of those out there that sort of tantalize you, that you so

Mara S. 22:30

it's funny you and I share, we share a favorite in Rei. And I also love Rei, I love that when I go to checkout, they always acknowledge the fact that I'm a co op member and you know, make me feel like a million dollars. I also love the benefit of the extended return policy. And I love it because I'm an incredibly aspirational shopper. And I will go to REI with the intention of hiking every mountain and you know, skiing every major resort, right? And it may or may not happen. And so that extended return policy actually has saved me on many times where my ambitions get the best of me. But I love it. So that's a value that I that I really appreciate. But mostly, I would anchor it on the fact that they thanked me for being a co op member every time I go to pay. And it just feels good.

Wendy 23:25

Yeah, you know, you do you again, raise something that I think is so important than that. And it's back to really knowing who my shopper is, right? And if they really understand that you are this aspirational person, right, who's climbing mountains or adding streams and whatever, when he doesn't know I grew up in the bush, I should know about climbing mountains. But anyway, fishing something. That notion of that if they know that, then they know that that return policy is so important because they don't actually need those cleats. So that's really powerful. Yeah.

Mara S. 24:01

And I would, I would imagine that they also have a shopper who follows through. And that return policy is helpful because it drives trial. And you know, I want to try these hiking boots, I want to try this new gear, I want to try this new thing. And if it doesn't work out, they can take it back. And so I do think it connects ultimately to that. Like you said to that shopper insight of who is my shopper. What is the problem? I'm solving for them? What do they need and what's going to inspire them to come back. And so in this case, they get the they get the enthusiast and then they get the aspirational enthusiast.

Wendy 24:39

Yeah, yeah. And it does talk to those segments as we think about personalizing the experience and not just what products I buy. Mara, I can't thank you enough for this. I think not only is it a CVS story, but I think it's that story about why there is this engagement and lots of innovation Shan going on in this space at the moment with so much competition for the shoppers’ dollar. I've watched your path from coffee to jewels, two of my favorite things, and now to my health and wellness. So it's great to have you here. Thank you for coming.

Mara S. 25:16

Thank you, Wendy, it's always great to talk with you.

Wendy 25:19

What Mara said is something I think we all understand, you know, loyalty programs based on value proposition. I think that's all pretty clear. We all know it, whether it's Amazon, whether it's paying to be a member of Costco, whether it's CVS now with a new program, Target’s new program, there's always this value proposition, you know, the more you spend, the more opportunity you have. But I think the essence of what Mara also said from her own passion about her favorite places, is that this is also about building a level of engagement, a level of community, and a level ultimately, which he tempted us with at the end of funds in this complex landscape that we live in. Now. We know in all our How America Shops®, research that people are shopping in more places than they have ever shopped, in spite of the fact that people are trying to save time that they're stressed, they've got so many things on their plate, they will go anywhere, to just about anything. So it's never been more and more important to build a relationship and multi tiered, multifaceted relationship with a shopper and a place where they buy and the brands that they buy at that place. Because commoditization is clearly with us. And the only way to build profitability longer term is to build that level of engagement, where the shopper that you understand and can personalize, build a relationship with longer term. That's the opportunity in the future to create those personalized, intimate community building programs. That's what the future looks like. And with a little fun, tossed into the mix, a little gaming tossed into the mix. Then you're you're in the sweet spot. Thanks for joining me. See you in the future. Cheers for now.

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