BRAVE COMMERCE | Episode Unpacking CVS Media Exchange’s Unique Retail Media Approach with Parbinder Dhariwal
In this episode of BRAVE COMMERCE, Rachel Tipograph and Sarah Hofstetter are joined by Parbinder Dhariwal, VP and GM of CVS Media Exchange (CMX), to explore the distinctive approach CVS takes to the rapidly evolving retail media landscape. Parbinder discusses how CMX leverages CVS’s extensive loyalty program to differentiate itself from other retail media networks. With 74 million active ExtraCare members and a vast network of digital and physical touchpoints, CVS is uniquely positioned to deliver personalized and seamless shopping experiences across channels.
Parbinder shares insights into how CVS integrates its loyalty data with both on-site and off-site media, ensuring every interaction is measurable and attributing value back to the retailer and its partners. He also discusses the significance of CVS’s omnichannel strategy, which is built to meet consumers where they are—whether online or in-store. This conversation delves into the crucial role that loyalty programs play in driving retail media success and how CVS is setting new standards for the industry.
Tune in to hear about the future of retail media in a world where cookie deprecation is imminent and data-driven personalization is key. Parbinder offers a deep dive into how CVS is not only keeping up with industry trends but leading the charge in innovation and consumer connectivity.
Key Takeaways:
- Loyalty as a Differentiator: Discover how CVS’s ExtraCare program provides a foundation for personalized consumer experiences, driving both digital and physical growth.
- Omnichannel Engagement: Learn about CVS’s approach to blending online and in-store interactions, ensuring that consumers can seamlessly transition between channels.
- Future of Retail Media: Understand how CVS is preparing for the cookie-less future, focusing on data-driven targeting and measurable attribution in both on-site and off-site media.
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Speaker 1: That’s the premise that loyalty provides. Loyalty as a baseline,
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Speaker 1: as a foundational element for retail media networks is actually
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Speaker 1: truly the differentiator. As we go forward with retail media networks,
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Speaker 1: as we continue to invest in this particular platform, that
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Speaker 1: will be the change agent. And we see that. We
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Speaker 1: see that with many, many different retailers looking to launch
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Speaker 1: loyalty programs or looking to invest further in their loyalty programs.
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Speaker 1: We have one. It’s robust. It’s been around for 20
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Speaker 1: plus years. We have a lot of engagement with our
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Speaker 1: consumers on that particular loyalty program. So we just want
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Speaker 1: to make sure that we continue to utilize that as
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Speaker 1: best we possibly can to continue to provide consumers what
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Speaker 1: they want.
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Speaker 2: Welcome to today’s episode of Brave Commerce.
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Speaker 3: I’m Rachel Tippegraph, the founder and CEO of Micmac.
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Speaker 2: I’m Sarah Hofstetter, president of Profitero.
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Speaker 3: And this is a show that talks about what’s relevant
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Speaker 3: in e-commerce for the world’s biggest brands. Sarah, we know
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Speaker 3: your shopping habits on this show, but where do we
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Speaker 3: talk about who you’re most loyal to from a retailer standpoint?
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Speaker 2: I do have my shopping habits and I can be
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Speaker 2: a switcher. I am very deeply connected to CVS. I’ve
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Speaker 2: tried not to be. But just when I think I’m
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Speaker 2: getting out, they suck me right back in, those receipts
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Speaker 2: with the coupons.
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Speaker 3: It’s like they know when you have allergies. They know everything.
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Speaker 2: But that said, it’s about getting you at the right
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Speaker 2: place at the right time. And what they have been
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Speaker 2: able to do with 1P data, not just as a consumer,
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Speaker 2: but just in general, the way that CVS knows their shoppers,
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Speaker 2: they’re the OG of 1P as far as I’m concerned,
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Speaker 2: much more so than others. And I think there’s been
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Speaker 2: a mad rise race over the past few years by
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Speaker 2: other retailers and obviously plenty by others to try to
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Speaker 2: figure out how do you replicate something like that forget
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Speaker 2: about the upcoming cookie-less internet it was more the wow
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Speaker 2: if you could really understand your shoppers in a special
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Speaker 2: way not only can you sell media against it but
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Speaker 2: you’re going to be able to increase basket sizes increase
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Speaker 2: purchase And particularly for a retailer like CVS, that is
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Speaker 2: a high-low where you’ve got like a really competitive private
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Speaker 2: label capability, but you’re in drug and beauty where brand
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Speaker 2: names rule the day. It’s a very interesting dynamic to
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Speaker 2: see when consumers trade down to a private label, when
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Speaker 2: they don’t, and CVS has got it all. 74 million
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Speaker 2: extra care registered users. That’s crazy.
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Speaker 3: It’s wildly impressive. And so, you know, it started in
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Speaker 3: consumer personalization. Greater care leads to greater loyalty. And now
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Speaker 3: they’ve taken this massive database and began to monetize it
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Speaker 3: in the CBS media exchange. So we’re going to bring Parves,
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Speaker 3: who leads the practice, onto the show to hear how
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Speaker 3: CBS is leveraging all of this first party data they
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Speaker 3: sit on. Today, we are super excited to have Parbinder,
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Speaker 3: who also goes by Parbs, Dariwal, who is the VP
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Speaker 3: GM of CBS Media Exchange. Hey, Parbs.
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Speaker 1: Hey, how are you? Good to be on the show.
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Speaker 1: Thank you for having me.
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Speaker 3: Yeah, we’re super excited. I think Sarah and I have daily,
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Speaker 3: maybe weekly touch points with CBS media. Very curious to
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Speaker 3: learn more about CBS Media Exchange because maybe it’s also
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Speaker 3: touching us. You joined CBS shortly after they announced that
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Speaker 3: they were going to have their foray into the world
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Speaker 3: of retail media. And it feels like every retailer has
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Speaker 3: now launched a retail media practice. So how do you
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Speaker 3: feel CBS is different?
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Speaker 1: Yeah, it’s a great question. First of all, I just
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Speaker 1: say the retail media category is definitely emerging. We launched
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Speaker 1: CMX back in 2020, August 2020, coming up to our
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Speaker 1: fourth birthday. And I joined a couple of years later.
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Speaker 1: And the goal being is, how do we scale this, right?
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Speaker 1: And how do we scale it as fast as possible?
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Speaker 1: But if you look at what CMX is doing, we’re
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Speaker 1: really predicated on, in terms of our value proposition, on
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Speaker 1: how do we grow consumers within our retail environment, both
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Speaker 1: digital and physical environment, but leveraging our extra care consumers.
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Speaker 1: So our business is predicated upon the 74 million extra
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Speaker 1: care members who pretty much rely on everything to do
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Speaker 1: with CVS Pharmacy for their everyday health and wellness and
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Speaker 1: beauty needs. But you’ve also got to think about the
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Speaker 1: way in which the consumer comes into our business as well.
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Speaker 1: constantly engaging. We have almost 5 million interactions every single
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Speaker 1: day who are coming into our stores and store environments.
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Speaker 1: And then, you know, almost 140 million customers are coming
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Speaker 1: onto our website every single month. So we’ve got an
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Speaker 1: enormous amount of interaction. Our differentiator, I would say, versus
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Speaker 1: other retail media networks is that we are built on
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Speaker 1: our loyalty program. We have a clear understanding of the
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Speaker 1: way in which consumers are moving between channels. And consumers
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Speaker 1: are moving between channel. They’re moving between digital, physical. It
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Speaker 1: depends on convenience. And I would say, look, all retailers
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Speaker 1: are not made the same, just as all retail media
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Speaker 1: networks are not made the same. So we’re setting ourselves
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Speaker 1: up in a very differentiated manner in that regard.
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Speaker 2: Yeah, I would agree. I mean, would look at you
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Speaker 2: guys as almost like the OG of really having a
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Speaker 2: healthy understanding of your consumer experience. The long coupons was
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Speaker 2: only the beginning of it all, otherwise known as my
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Speaker 2: moments of pride when I would show my family how
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Speaker 2: much money I saved. But one of the things that
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Speaker 2: we’ve certainly seen when we talk to a lot of
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Speaker 2: our clients who are the suppliers who sell their products
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Speaker 2: at CVS, they’re always wondering like how much of the
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Speaker 2: traffic is in-store versus online. The in-store experience is so special,
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Speaker 2: so unique. online behaviors for CBS were definitely on the
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Speaker 2: later side of the uptick, but you guys have really
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Speaker 2: been hustling on this. So as we think about the
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Speaker 2: role of retail media online, how do you think about
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Speaker 2: it from an Omni perspective?
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Speaker 1: Yeah, and it is purely an Omni perspective. And I
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Speaker 1: think that’s important to know because we want to be
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Speaker 1: there with the consumer in the if that means that
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Speaker 1: that consumer is starting their journey in a digital environment
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Speaker 1: and completing it in a physical environment. And we see
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Speaker 1: a lot of that, right? Like we see over half
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Speaker 1: of our consumers are starting their digital journey with us
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Speaker 1: in terms of shopping and then completing it in stores
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Speaker 1: within 48 hours, right? Because that sort of just really
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Speaker 1: testament to the way in which CVS provides that level of, hey,
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Speaker 1: I need this product now. I have a need for
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Speaker 1: my health and wellness or I’m passing a CVS. and
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Speaker 1: I’ll go and pick that product up, or I’ll just
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Speaker 1: order it online, pick up in store, or I’ll see
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Speaker 1: what store closest to me has that product in stock.
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Speaker 1: You know, we’re also seeing an enormous amount of engagement
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Speaker 1: from our extra care members. So remember, like 74 million
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Speaker 1: of our extra care consumers, over 85% of our e-com
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Speaker 1: sales comes from that loyalty program, right? So They’re incredibly
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Speaker 1: engaged with us. That’s what’s driving our digital engagement and
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Speaker 1: digital growth, but it’s also driving our physical growth as well.
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Speaker 1: We’re seeing our digital growth and purchases on CVS.com grow
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Speaker 1: around about 33%, 34% year over year. There’s an enormous
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Speaker 1: amount of opportunity that continues to be had, but I
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Speaker 1: just want us to make sure that as we build out,
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Speaker 1: whether it’s the digital portfolio or we build out the
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Speaker 1: physical portfolio, How do we service the customer’s needs and
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Speaker 1: give them the product and how they want the product
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Speaker 1: when they want the product? And that’s where the Retail
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Speaker 1: Media Network really comes into effect as well. As we’re
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Speaker 1: on that journey with that consumer, as we see that
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Speaker 1: consumer switching channel depending on certain use case and needs,
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Speaker 1: We want to make sure that we’re connecting with that
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Speaker 1: consumer right the way through, and more importantly, for your suppliers,
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Speaker 1: for the people that you guys are working with and
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Speaker 1: who we’re working with. How do we enable that? How
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Speaker 1: do we bring those products to life when the consumers
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Speaker 1: are touching those different parts of their journey, their purchase journey?
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Speaker 2: So as you think about that connectivity, I mean, 74
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Speaker 2: million Extra Care members is pretty extraordinary. Obviously, personalized experiences
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Speaker 2: become very critical. Yeah. How do you think about the
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Speaker 2: relationship that your customers have with you and your brand
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Speaker 2: and particularly your private label brand because of the added
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Speaker 2: incentives that come with extra care membership and the private
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Speaker 2: label as it relates to price sensitivity? Where does that
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Speaker 2: come into the equation of that connectivity?
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Speaker 1: Yeah, we’re a high-low retailer and that comes into that
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Speaker 1: longevity of who we’ve been for a number of years.
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Speaker 1: I think whether it’s private label or it’s branded, and
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Speaker 1: there’s a lot of conversation that’s happening right now around
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Speaker 1: private label, just given the economic state that we’re in,
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Speaker 1: that connectivity to the consumer and understanding those behaviors, this
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Speaker 1: is what sort of goes back to the first question
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Speaker 1: you’re asking. This is what sets CMX apart. The understanding
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Speaker 1: of the consumer within the categories that they’re purchasing, but
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Speaker 1: understanding that consumer between digital and physical is That data set,
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Speaker 1: those insights across the health and wellness journey of that
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Speaker 1: consumer are incredibly important for us. It doesn’t matter whether
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Speaker 1: or not we’re utilizing that for brands in order to
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Speaker 1: target certain types of consumers to re-engage with that brand
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Speaker 1: or whether we’re using that data for our own branded products. products,
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Speaker 1: for store branded products. What we want to make sure
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Speaker 1: is that we’re providing customers with the best and most
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Speaker 1: robust journey across the CVS ecosystem. And we’re providing connectivity
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Speaker 1: to product, product that they’re going to want, product that
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Speaker 1: they’re going to use, product that they’re going to continue
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Speaker 1: to engage with them. That’s the premise that loyalty provides.
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Speaker 1: Loyalty as a baseline, as a foundational element for retail
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Speaker 1: media networks is actually truly the differentiator as we go
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Speaker 1: forward with retail media networks, as we continue to invest
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Speaker 1: in this particular platform. that will be the change agent.
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Speaker 1: And we see that. We see that with many, many
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Speaker 1: different retailers looking to launch loyalty programs or looking to
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Speaker 1: invest further in their loyalty programs. We have one. It’s robust.
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Speaker 1: It’s been around for 20 plus years. We have a
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Speaker 1: lot of engagement with our consumers on that particular loyalty program.
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Speaker 1: So we just want to make sure that we continue
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Speaker 1: to utilize that as best we possibly can to continue
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Speaker 1: to provide consumers what they want.
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Speaker 3: So if the heartbeat of CBS’s media exchange is CBS’s
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Speaker 3: loyalty program, as Retail media also starts to move more
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Speaker 3: and more off-site. So it’s no longer about just cbs.com
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Speaker 3: or CBS physical stores, but Meta, TikTok, Google, and everything else.
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Speaker 3: How does CBS view the opportunity in off-site media? We’ll
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Speaker 3: start there.
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Speaker 1: Yeah. So in a couple of different ways, whenever we’re
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Speaker 1: working in an off-site capacity, we’re always making sure that
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Speaker 1: we can do as best we possibly can, because there
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Speaker 1: are some world gardens that we know and love out there.
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Speaker 1: We want to make sure that every single impression that
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Speaker 1: we serve is measurable. There’s an attribution model around that.
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Speaker 1: Earlier this year, we launched a program that gives us
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Speaker 1: the ability to target pinners across Pinterest using CVS-specific data.
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Speaker 1: That has an end-to-end attribution model. Consumer sees the ad.
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Speaker 1: We see the consumer on Pinterest. We make sure that
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Speaker 1: we drive that full attribution model end-to-end, whether we see
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Speaker 1: that attribution in a physical store or in a digital capacity.
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Speaker 1: We also want to make sure any other off-site partnerships
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Speaker 1: that we launch, be it through clean room environments or otherwise,
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Speaker 1: that we have the attribution model. Off-site is a big component.
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Speaker 1: It’s a big component for CMX. We do drive considerable
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Speaker 1: scale in an off-site capacity because we have scale throughout
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Speaker 1: loyalty program. And then we also continue to innovate as
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Speaker 1: it relates to off-site. How do we provide more self-service tools,
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Speaker 1: the opportunity for our suppliers to buy us a little
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Speaker 1: bit more seamlessly without more sort of managed service touch points?
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Speaker 1: So we’re bringing that to life as well. And how
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Speaker 1: do we partner with the right brands that are going
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Speaker 1: to drive more connection for our consumers in the beauty, health,
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Speaker 1: wellness categories? But then also, how do we continue to
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Speaker 1: drive that attribution model? And the attribution model is key
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Speaker 1: because I think that, as you talk about retail media,
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Speaker 1: as you look at what we can provide with That
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Speaker 1: is a clear differentiator for our channel versus any other.
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Speaker 3: And as retail media moves into these environments that have
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Speaker 3: been heavily dependent on cookies for attribution, how do you
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Speaker 3: think that changes what CBS is trying to do?
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Speaker 1: The promise that retail media provides is is really a
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Speaker 1: data foundation layer, I would say, for the industry, for
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Speaker 1: the ad industry as a whole. If done correctly, we
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Speaker 1: can really stitch together data sets from retailers to truly
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Speaker 1: understand how consumers are maneuvering between different retail. But how
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Speaker 1: do we utilize that data then as being the foundational
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Speaker 1: layer for the way in which we target effectively that consumer?
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Speaker 1: Personalized approach, because that’s really… where I would say retail
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Speaker 1: sort of 3.0, and there’s a lot of talk about
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Speaker 1: retail 4.0, but that’s where we see retail 3.0, I
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Speaker 1: would say, really coming into its own. It’s setting yourself
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Speaker 1: up as a retail media network to really provide that
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Speaker 1: foundational layer for suppliers to target consumers off-platform, utilizing the
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Speaker 1: data sources that we have access to and in abundance.
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Speaker 1: We truly understand the consumer, right? And That’s why loyalty
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Speaker 1: programs as a whole are incredibly important because that first
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Speaker 1: party data asset is not available in many, like in
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Speaker 1: other retail media networks that don’t necessarily have that. That’s
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Speaker 1: a clear differentiator. It should be something that, you know,
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Speaker 1: if I was starting a retail media network today, I’m
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Speaker 1: truly unsure that it’s built foundationally upon that. That sets
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Speaker 1: us apart from any of the other competitors within our space.
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Speaker 2: One of the things that you alluded to earlier in
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Speaker 2: the conversation was, how much we love walled gardens. I’m
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Speaker 2: guessing a little bit of sarcasm there. No, no, no.
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Speaker 1: We don’t know what sarcasm is.
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Speaker 4: Oh, man.
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Speaker 2: We’ve got a cultural gap here, my friend. And when
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Speaker 2: you start dealing with me and Rachel, the sarcasm drips
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Speaker 2: sometimes a little faster than the tea. So as the
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Speaker 2: retailers do become new walled gardens, brands are demanding more
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Speaker 2: transparency from retailers to increase the spend. You mentioned the
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Speaker 2: trade desk, you’re dropping all the right names, saying all
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Speaker 2: the right things. What do you think the industry needs
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Speaker 2: to do to come together and actually accomplish these obstacles?
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Speaker 2: Like if you were putting together a symposium of all
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Speaker 2: the people that needed to happen, what would it look
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Speaker 2: like to you?
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Speaker 1: Yeah, and I would just sort of really underscore and
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Speaker 1: no sarcasm in this statement is the saying versus the doing.
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Speaker 1: Whilst we’re saying all of the right names, we’re also
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Speaker 1: building those partnerships. And I would say that whether it’s
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Speaker 1: the trade desk or whether it’s Pinterest or the work
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Speaker 1: that we’ve done around standardization and methodology for measurement, we’re
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Speaker 1: not just saying, but we’re doing. And we’re not just doing,
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Speaker 1: we’re doing it fast. I am incredibly impressed by the
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Speaker 1: team that we have here at CMX. The team is
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Speaker 1: driving an enormous amount of change, not just within our
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Speaker 1: business as CVS Pharmacy, but the amount of change that
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Speaker 1: we’re driving across the industry. If you look at the
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Speaker 1: IAB standards that came down, I think sort of February,
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Speaker 1: they were published. We were the first health and wellness
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Speaker 1: retail media network to publish our standards against that and
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Speaker 1: publish the fact that we’re matching, if not beating the
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Speaker 1: baseline measurement methodology that the IAB is recommending. We truly
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Speaker 1: believe that transparency will continue to grow the industry. It’s
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Speaker 1: a pillar upon which we stand. And we will continue
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Speaker 1: to drive. We drive transparency through to not just our consumers,
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Speaker 1: but also our suppliers. I, again, truly believe that transparency
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Speaker 1: will set us apart in terms of growth trajectory as
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Speaker 1: an industry versus other walled gardens that are out there
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Speaker 1: that have, I would say, may have not been as
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Speaker 1: transparent when they first set out. And we can do
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Speaker 1: the transparent. We can do transparency. We can do it
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Speaker 1: incredibly well because we We have the data. We have loyalty.
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Speaker 1: We understand the consumers. They’re shifting across the omni-channel. And
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Speaker 1: we want to make sure that we bring that to bear.
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Speaker 1: So there’s a lot of work that’s been done here.
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Speaker 1: The IAB have done a phenomenal job of bringing the
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Speaker 1: vast majority of the industry together. I’m very, very respectful
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Speaker 1: of the work that they have done. I’m also respectful
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Speaker 1: of the other retailers that have done work in order
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Speaker 1: to get those standards to a good place and the
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Speaker 1: speed at which we did that. You’ve got to bring
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Speaker 1: them to market, right? And you’ve got to be able
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Speaker 1: to stand by them. We do. We absolutely stand by them.
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Speaker 1: So we launched our standards in market earlier this year,
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Speaker 1: around about March. We’ll continue to innovate as it relates
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Speaker 1: to measurement and providing more transparency to our suppliers. We’ve
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Speaker 1: got nothing to hide. We have a medium that works.
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Speaker 1: We fully understand our consumers and the way in which
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Speaker 1: they’re shifting between channels. We want to make sure that
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Speaker 1: we bring that level of understanding of those consumers to
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Speaker 1: brands because It helps them make better decisions in their
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Speaker 1: overall marketing mix as well. Not just by spending on
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Speaker 1: retail media, but how do they use that data to
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Speaker 1: spend in other channels, other channels that could be working
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Speaker 1: for them?
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Speaker 3: Well, we’ve had a few of your colleagues who participated
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Speaker 3: in the IAB retail media standard. So it’s great to
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Speaker 3: hear you talk so favorably about it. We got to
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Speaker 3: ask you, Parb, our famous last question, which is what’s
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Speaker 3: the bravest thing that you’ve ever done?
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Speaker 1: Yeah, I thought long and hard about this. Obviously, a
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Speaker 1: Brit kind of plugged that one earlier. I’ve moved countries
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Speaker 1: and companies a few times. We often think about moving
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Speaker 1: between companies and we see that as, you know, sort
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Speaker 1: of change and, you know, change is often a good thing.
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Speaker 1: But when you move family as well as company, that’s
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Speaker 1: often a scary value proposition when you move into a
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Speaker 1: new place, new environment, new neighborhood. It’s been one of
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Speaker 1: the most challenging things for me. And I’ve moved, just
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Speaker 1: so you’re aware, I’ve moved from London to New York,
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Speaker 1: New York to Barcelona, Barcelona back to New York. And
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Speaker 1: you’re moving a house, right? You’re moving a family. You’re
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Speaker 1: moving everything that goes with it. I have an awful
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Speaker 1: amount of respect for my parents, who were also immigrants
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Speaker 1: at the time in the 60s when they came over
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Speaker 1: to the UK. And I had the opportunity of moving
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Speaker 1: with a company. My parents didn’t have that opportunity back then.
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Speaker 1: And So it’s brave in terms of my understanding of brave. But,
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Speaker 1: you know, there are, you know, people, my parents are
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Speaker 1: a really good example in terms of their success and
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Speaker 1: how they move between countries as well. But there’s others
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Speaker 1: as well that don’t have the luxuries that we do.
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Speaker 1: But that’s kind of, I would say, the bravest thing
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Speaker 1: that I’ve done.
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Speaker 3: Well, as someone who’s moved as far as from New
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Speaker 3: Jersey to New York, I would definitely call what you’ve
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Speaker 3: done brave.
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Speaker 1: Thank you. Thank you.
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Speaker 3: Parbs, we appreciate your insights. I think that they’re isn’t
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Speaker 3: a listener here that doesn’t think about retail media and
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Speaker 3: the future every day. And you’re obviously at the forefront
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Speaker 3: of what’s going on. So we appreciate your time.
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Speaker 1: Thank you as well. I really appreciate your time. You
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Speaker 1: guys have got a tremendous platform and look forward to
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Speaker 1: continue to listening. So thank you for having me on.
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Speaker 3: Thank you. If you like what you heard and you
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Speaker 3: want to go check out some great brands that are
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Speaker 3: available at CBS, you heard us on the show talk
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Speaker 3: about AJ at Bayer. So go check out his episode
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Speaker 3: or go listen to Eric Tanowski from Kenview on the show.
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Speaker 3: If you like what you’re hearing, tell a friend, write
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Speaker 3: a review. Thanks for listening.
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Speaker 4: Hi, I’m Jackie Cooper, Global Chief Brand Officer at Edelman
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Speaker 4: and the host of Touch of Truth, a new podcast
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Speaker 4: launching on the Adweek Podcast Network. My dad gave me
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Speaker 4: this incredibly smart piece of advice. Meet everyone once. As
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Speaker 4: a result, I’ve met some of the most fascinating and
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Speaker 4: inspiring people on the planet. Now on Touch of Truth,
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Speaker 4: will challenge your way of thinking. Touch of Truth is
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Speaker 4: available wherever you listen to podcasts. New episodes come out
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Speaker 4: every Tuesday. I do hope to see you there.