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Big Questions Answered helps us understand important CVS Health initiatives by taking a closer look at new products, powerful innovations and the big changes the company is making to achieve its strategic imperatives and build a world of health around every consumer. The company's senior leaders answer big questions from host Matt McGuire.
Matt McGuire
The Hispanic population in the U.S. is rapidly growing. It’s currently at more than 65 million people — an 84% increase from its population in 2000. And CVS Health is ensuring the health and wellness needs of this community are being met.
In 2014, the company acquired Navarro Discount Pharmacy, a chain of 33 drug stores in South Florida that serve the Hispanic communities where they’re located. As CVS Health learned about the unique needs of this population, it used those insights to launch more than 200 CVS Pharmacy y más stores in cities across Florida, California, Nevada, Oklahoma, Texas and Puerto Rico. These stores serve Hispanic communities and have pharmacies, bilingual staff and signage, and more than 1,000 culturally relevant products.
On today’s episode, we’ll discuss:
• The difference between CVS Pharmacy y más and Navarro stores.
• How CVS Health is best positioned to serve Hispanic communities.
• And the pilot programs the company is launching to continue serving this market.
Welcome to Big Questions Answered, a podcast that helps us understand the important initiatives at CVS Health. I’m Matt McGuire from the Enterprise Communications team. I’ll be your host as we take a closer look at new products, powerful innovations and the big changes we’re making to achieve our strategic imperatives and build a world of health around every consumer. Thanks for joining me today as we get our big questions answered.
I’m here today with Alfredo Martinez, the Associate Vice President and General Manager of Hispanic Markets at CVS Health. Alfredo was born and raised in Mexico City, and he has more than 25 years of retail and merchandising experience with companies in Mexico and the U.S.
He and his cross-functional team, which includes colleagues in marketing, merchandising and store execution, focus on strengthening the way we serve the growing Hispanic population in the U.S. at CVS Pharmacy y más stores, Navarro stores and the CVS Pharmacy stores in Hispanic communities. Alfredo, thank you for stopping by today.
Alfredo Martinez
Hey, Matt, thank you for having me. I'm very excited to share my story with you guys.
Matt McGuire
So, to kick things off, could you give us a bit of background on CVS pharmacy y más stores and Navarro stores, and walk us through how the stores are similar and how they're different?
Alfredo Martinez
Yes. So, our journey to start in servicing the Hispanic customer started 10 years ago when CVS acquired the Navarro, a pharmacy chain that is based in South Florida, a chain that has been in business for many, many decades. Very close to the community. High equity as a brand in that community. And we have a little different business model than what you see in a standard CVS. We have a larger assortment and spaces allocated to categories like grocery, like fragrances and OTC, for example. And then there are some services that you don't see in a standard CVS. Like, we serve coffee to our customers who are shopping with us every morning. And, of course we have, you know, the connection with the local pharmacies.
And, from that learning, we took some elements from Navarro and developed y más eight years ago. So, we took similar business model, but adapted it to the CVS spaces, and that's how y más was developed. So, y más is our approach to serve the Hispanic customer under the CVS umbrella — same standards, same spaces. And it's been a great journey so far.
Matt McGuire
Oh, that's great. I love the idea of using the same standards when serving Hispanic customers. So, I feel like I understand why these stores would do well in Hispanic communities — the store names, the products, the coffee at Navarro, which would probably draw me in if I lived near one. But what other aspects of these stores help them appeal to shoppers in Hispanic communities?
Alfredo Martinez
Yes, I think it's about products and services, right? So, the Hispanic customer is coming, shopping with us to get educated and to get recommendations, particularly on their health care journey, right? So, they connect with the pharmacist in a different way when they ask for education on a particular medication that they’re taking or recommendations on how to change their diet based on whatever the health care journey they're going through. So, those attributes are very important as well as affordability, right? Hispanic customers tend to have lower incomes compared to the non-Hispanics. So, affordability is a key attribute for them. Services is related to the connection to the pharmacies, right? We have bilingual pharmacist in every Navarro and CVS y más store because even though our Spanish customers speak English, so they feel comfortable with the language, always connect with someone in your first language, particularly related to healthcare. It drives a sense of belonging, right? It drives a deeper and more engaging connection. So, we think that having bilingual staff at the pharmacist level, at the store manager level, it's important for our customers.
Matt McGuire
Interesting. So, to your point about value and affordability, I was doing a little research before sitting down with you and I read that CVS Pharmacy y más stores have hundreds of value sized products and value size packs. Could you tell me what some of these products are and what their appeal is?
Alfredo Martinez
Yes, so we are a great option for our Hispanic customers in some of the categories, as I mentioned, that we carry in items that we are relevant for them with specific brands that they recognize. And we promote items that show value. So, to your point, size is important. Based on the frequency of of shopping, based on where the deal they can get, based on size of packaging. So, that is one of the main drivers of traffic to our stores — the value, the assortment and particularly the brands that they recognize for their everyday diet.
Matt McGuire
Nice. So what as a company, are we learning from y más and Navarro, and have we begun incorporating any of it into CVS Pharmacy stores — especially stores in largely Hispanic communities?
Alfredo Martinez
Yes, we have seen the Hispanic customers going into new places, right outside of the traditional states. When you think about the Hispanic communities or the Hispanic customers, we tend to think about the traditional states where this community has been based for many, many decades — that includes California, Texas, Arizona, Florida, of course. But we started to identify that these communities are going to the rest of the U.S. —new states — and we want to find a way to serve them better. I was in Sioux City in a couple of years ago visiting a factory. And Sioux City is in the intersection of Nebraska, South Dakota and Iowa. And I was going through the city, and I saw a famous Mexican pastry brand called Bimbo, and they have a distribution center there. So, it makes me realize that even in those days when we didn't think about the community being relevant enough, we started to see those communities going to those places to the extent that now these brands are setting distribution centers for those cities, for those states, right? So, we are identifying through our Customer Insights team where these spaces, where we can serve them better, new cities, new states, and then how this customer is expecting to be served, right? Where is the shopping experience that they're expecting from us.
Matt McGuire
Yeah, absolutely. That's an interesting story, too. So, I understand that we're utilizing this information about what works in Hispanic communities to improve the customer experience more broadly with pilot programs later this year. Can you tell me what do we hope to learn from these pilots?
Alfredo Martinez
Sure. I think we're always in our journey to learn more about their preferences. So, we are working on, you know, different concept stores, different concept spaces, where we defined new services, new spaces that are relevant for these customer. We've updated trends, right? This is a community that is a moving very quickly in terms of trends. They index high in different categories. I mentioned grocery, but there's also beauty and health care categories that, this customer, this community, index high. And we are gathering these updated insights to develop the stores or concepts spaces — moments where they can connect with us in a more updated way. So, we start with one concept and then we apply the learnings into the rest of the stores.
Matt McGuire
Nice. So, Alfredo, to close out this conversation, I’d like to ask you a question that I’m sure you’ve been asked at least once or twice in your 25-year career. As you travel across the U.S., and stop by CVS Pharmacy y más stores, Navarro stores and CVS Pharmacy stores in largely Hispanic communities, what are you seeing? Why is it so important that the company continues to invest in the Hispanic community?
Alfredo Martinez
Yes, I think this is very fascinating topic for me. It's an exciting topic for me. Business-wise, this makes sense, right? These communities expanded rapidly. Their economic buying power is growing 2.5 times faster than the non-Hispanics. And they are integrated into U.S. economy with trends in categories that are part of our business model. So, it just makes sense for us to continue investing because it's good for business, right? We are a loyal customer, fun, and in many catagories, higher spenders than non-Hispanics, like in beauty.
Matt McGuire
Bigger spenders, a rapidly growing population, those right there are some good reasons to continue focusing on and investing in Hispanic communities. Alfredo, thank you for stopping by today. It has been great talking with you.
Alfredo Martinez
Thank you, Matt. Thank you for having me here and sharing my story.
Matt McGuire
And a big thanks to you for tuning into this episode until next time. I'm Matt McGuire. I look forward to joining you again to get more big questions answered.