CVS 2001 Annual Report Download - page 9

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We have intensified o ur fo cus
o n quick, personal,
courteous service.
prescriptio n to re- invigorate fro nt- store gro wth. As
a result, the fo urth quarter of 2001 already reflected
impro ving mo mentum in the fro nt- end of o ur business.
We ’re re- energizing o ur seaso nal and general
merchandise business in several ways. We bro ught
to gether a new team of professio nals to better manage
this impo rtant c atego ry. The new mix of merchandise is
expected to pro duce impro ved results, with o ur successful
2001 Christmas seaso n reflecting just the beg inning o f
that trend.
We also are increasing o ur focus o n tailo ring o ur mix of
products based o n sto re lo catio n. Urban sto res, fo r example,
offer different pro duc ts than tho se in the suburbs. In stores
near high-business areas, we are sto cking the kinds of
products so ught by lunchtime custo mer traffic.
We are accelerating o ur advertising spending in 2002,
buying more print space, offering “ho tter” prices, and airing
mo re radio and TV advertising. We are increasing o ur bro adcast
levels to suppo rt new market initiatives, and to raise awareness
aro und key pro ducts as well as o ur ExtraCare®pro g ram.
Creating and Keeping
Loyal Customers
To increase custo mer lo yalty, we are
maximizing o ur ExtraCare
®
card program.
Ro lled o ut in February 2001, the
ExtraCare®pro gram already has mo re
than 25 million cardho lders, 11 millio n mo re than pro jected by
year’s end. The card already is used in abo ut 50% o f
transactio ns, and cardho lders are spending mo re at CVS
than no n-cardho lders. Our suppliers value the
ExtraCare®pro gram as well bec ause they c an
benefit fro m rich trend data regarding sho pper
preferences.
Custo mers who o pt into the program
receive periodic mailing s with targeted health-
care information and co upo ns based o n their
stated preferences and purchasing patterns.
They also receive o ne ExtraBuck®fo r every $25
they spend during designated sho pping spree
perio ds. ExtraBucks®are equivalent to do llars that
custo mers can use to purchase fro nt- end merchandise of
their cho ice. We are planning further enhancements
that will create additional value and co nvenience fo r
o ur custo mers.
With o ur co ntinued stro ng market share in key
catego ries and o ur plans to drive new gro wth, we
lo o k fo rward to healthy fro nt- sto re growth fo r the
fo reseeable future.
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