CVS Health Corp CVS has a plan to be viewed less as a pharmacy chain and more like Amazon.com, Inc. AMZN by selling annual memberships with free shipping.
CVS has been testing a membership program called CarePass in Boston and the company is now ready to expand the initiative nationwide. For an annual cost of $5 per month or $48 per year, consumers can receive free delivery on discounted CVS-branded items and prescription drugs. Other perks include a monthly $10 coupon and an exclusive hotline for pharmacy related questions.
Why It's Important
CVS wants to target millennials in its program and early results in Boston showed signs of success as 20% of users were born between 1981 and 1996. The millennial demographic is described as "time-starved" and CVS wants to make it "easier to do business" with the group, CVS Pharmacy President Kevin Hourican told CNBC.
"We think this program extends the convenience advantage," the executive told CNBC. "We are a very convenient shopping location because of our footprint, and this expands our convenience one step further."
CarePass pilot members spent on average 15% to 20% more at CVS than they otherwise would have. The higher level of sales more than offset shipping and promotions associated with the feature and investors will likely be looking for signs of success in future earnings reports.
CVS Health's stock traded around $55 per share Monday morning.
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Photo courtesy of CVS Health.
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