CVS/Pharmacy
CVS/pharmacy Leverages PopStats™ for Optimum Location Opportunities
CVS/pharmacy is not content simply to know that 10,000 people live in a one-mile
geographic area. The company also wants to know exactly how best to position a
new store relative to that population and to its competitors.
The national drug store chain gains this clear-cut insight with the help of
demographic reports, trade area maps, spatial interaction models, supply-demand
analysis, sales forecasting studies, and regression models fueled with STI:
PopStats data, its demographic data of choice.
"We're often looking at two or three sites within a one-mile radius, and we want
to zero in on the exact right spot for maximum sales opportunities," explains
Hartwell Hooper, Director of Market Research of the CVS Realty Company. "By
applying variables from PopStats, like income, age, and ethnicity, to our
analysis, we can do that, even at lower geographic levels and with extreme
confidence."
In fact, confidence in PopStats data was the deciding factor in CVS's switch
from another data product in 2004. "We conducted side-by-side comparisons of
PopStats block-group data with aerial views of our markets and saw that PopStats
was doing a much better job of capturing population growth," says Todd Galusha,
Senior Market Research Analyst. "The data from our previous vendor frequently
did not match field reports or aerial views, particularly in high-growth areas."
Expanding Business Possibilities
CVS currently operates almost 7,000 CVS/pharmacy and Longs Drugs stores in 45
states. Despite national economic conditions in 2008 and 2009, CVS has
continued to expand their square footage at an annual rate of two to three
percent. This equates to 250 to 300 projects per annum, with about a 50-50
split between new locations and relocations.
"We see the slowing economy as a growth opportunity, because real estate prices
are lower," notes Hartwell. "With our bi-annual delivery of PopStats data, we
can literally see which areas are growing and declining as the economy
fluctuates."
CVS is also able to see seasonal changes in specific trade areas using PopStats
data, such as Cape Cod and parts of Arizona. "Some trade areas have huge spikes
of seasonal population," notes Hartwell. "With the seasonality data in
PopStats, we can identify those changes and make strategic business decisions
that support sales growth."
Along with gaining confidence in its data, CVS also gained greater customer
service. "Never before could we go to the source of our data with questions;
normally, we were three to four layers removed from the source," explains
Hartwell. "Now we can speak directly with Robert (Welch) to discuss any issues
we might have such as how he came to certain population numbers and how to use
some of PopStats' specialty data. Synergos Technologies' unique level of
customer service raises our confidence in the data even more."
Taking PopStats Beyond Real Estate
In late 2008, CVS's real estate division launched an interactive online mapping
program powered with PopStats data. Today, the real estate division can access
demographic maps and reports on demand. Several other departments are actively
using the web-based tool to make strategic decisions related to individual
stores, such as:
- Merchandising. Uses the demographic tool to make decisions on stocking
different products in different stores.
- Pricing. Uses the population data to examine the customer mix around
individual stores and make strategic pricing decisions.
- Advertising. Uses the online analytic program in a variety of ways, including
determining in-store signage needs and deciding when and where to make targeted
promotional offers to specific customer groups.
"We want to bring value to every part of the company, especially in this
economy," says David Hansen, Market Research Manager. "With access to the best
data, other departments can also make better decisions."
"We have been getting excellent feedback on our analytic services," notes
Hartwell. "Other departments appreciate having easy access to accurate and
timely demographic information to help boost their strategic business decisions
- just as much as we do."
Find Ideal New Locations
To more accurately target ideal locations as CVS does, contact Synergos
Technologies today about the STI: PopStats data suite.
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