CVS is planning major tech upgrades in the coming year. EVP and CFO Shawn Guertin announced estimated capital expenditures as high as $3 billion to “invest in technology and digital enhancements to improve the consumer experience as well as our community locations” during a Feb. 9 call with investors.
The news comes on the heels of significant loyalty growth for the retailer; the number of CarePass subscribers rose more than 40% year-over-year in 2021 to hit 5.6 million, according to President and CEO Karen Lynch. Part of the credit belongs to the integration of CarePass with Aetna Commercial, making it easier for Aetna customers to join CVS’ program — and ease-of-use may be an ongoing theme for the retailer’s tech efforts.
“We also simplified the CarePass enrollment for all consumers, which is driving more growth in subscribers,” said Lynch during the call. “For our HealthHUB and MinuteClinic patients, we simplified and digitized the check-in process for patients. Our self-service digital tool enables individuals to complete traditional paperwork in advance of their appointment. Almost 80% of patients are already utilizing this capability.”
Shoppers pay for CarePass membership, unlike the free ExtraCare loyalty program, so removing friction on that front can be valuable for driving additional loyalty members. CarePass further incentivizes members to spend with the retailer through perks like same-day Rx delivery and a 20% discount on CVS Health brand products.
Additionally, bringing more traffic to HealthHUB and MinuteClinic locations is an important strategy given the increasingly competitive nature of the retail healthcare/medtail space. CVS already is using Aetna to offer virtual visits with HealthHUB and MinuteClinic staff. These can serve as a starting point for finding a consistent team of specialists based on the customer’s health needs.
With companies like Best Buy becoming increasingly involved in the medtail space, friction-free digitally focused care could become a consumer expectation. The electronics retailer is currently targeting the senior market with the acquisition of care-at-home technology platform Current Health, but these tools also could lay the groundwork for more general telemedicine offerings.