- CVS

SUMMARY
Upon its acquisition of Albertsons’ Sav-On and Osco pharmacies, CVS was faced with the daunting challenge of converting over 620 stores to the CVS look and feel, which included liquidating a significant number of non-compliant product brands. Based on a previous successful partnership and RGIS’ existing reach in the marketplace, CVS selected RGIS to provide the majority of the conversion teams for this six-month project, including all of the product liquidation specialists. Throughout the project, RGIS trained and deployed over 2,200 employees across twelve states—including 1,000 merchandisers in record time in California alone— to the successful completion of this project. With assistance from RGIS, CVS was able to successfully meet an aggressive deadline for its Southern California market launch in November 2006 while continuing to expand its existing presence in eleven other states across the country.


CVS COMPANY OVERVIEW
CVS is America's largest retail pharmacy, operating more than 6,200 retail and specialty pharmacy stores in 43 states and the District of Columbia. With more than 40 years of dynamic growth in the retail pharmacy industry, CVS is committed to being the easiest pharmacy retailer for customers to use. CVS innovatively serves the healthcare needs of all customers through its CVS/pharmacy stores; its online pharmacy, CVS.com; its retail-based health clinic subsidiary, MinuteClinic; and its pharmacy benefit management, mail order and specialty pharmacy subsidiary, PharmaCare.


PROBLEM

Shortly after CVS acquired nearly 700 Sav-On and Osco pharmacies from Albertsons, the company was faced with the overwhelming job of converting 623 of these stores to a CVS “look and feel” in time to support CVS’s aggressive revenue expectations for the newly converted stores. At acquisition time, CVS had 35 conversion crews in place; this represented fewer than half the number of crews that would be required to complete the conversion project. The stores to be converted included a significant number of stores in southern California that would represent CVS’s market launch in this region.

Objectives
Over a six-month period, assemble a group of CVS and third-party conversion teams to transform 623 Sav-On and Osco stores, across twelve states, to the CVS model. Liquidate approximately 30-percent of the product at each store due to non-compatibility. The liquidation and conversions were to take place during store hours and required daily store operations to be minimally impacted, including a number of 24-hour stores.
 

SOLUTION
The RGIS Process
An established presence in many of the target CVS conversion locations and success in partnering with CVS to complete the Eckerd integration in 2005 were key factors in selecting RGIS as the partner-of-choice to undertake a majority of the CVS conversion projects. In fact, RGIS’ reach in California, where more than half of theSav-On/Osco conversion project took place, was unmatched by any other vendor. Of the 623 stores that were converted, 306 (49%) were RGIS-led locations, 182 (29%) were CVS-led locations and another third-party vendor led the remainders. In the RGIS-led conversions, RGIS provided the managers, product specialists, and merchandisers for each project. In addition, in the CVS-led conversions, RGIS provided assistant crew coordinator support, product specialists, and approximately forty percent of the retail merchandisers. By virtue of its unique position as a worldwide leader in the inventory industry, RGIS provided the product specialist/liquidation support for 100 percent of the CVS conversion project.

Pre-Conversion
In July 2006, RGIS, in conjunction with CVS, began training RGIS crew managers and product specialists. Managers were trained in CVS floor plan standards, project scheduling, reporting, ordering, and CVS’s shelf tagging requirements to be implemented by the merchandising teams. Product specialists were trained in recognizing and removing non-compatible products from the CVS shelves. After implementing fixture labs and cosmetic labs in California, Missouri, Illinois, and Michigan, RGIS and CVS ran training boot camps to train teams on the disassembling and assembling of specialized fixtures. Following a two-week, in-store shadowing process, crews were certified based on three post-lab store conversions.

Schedules were developed to address the strict team timing requirements that were key to the success of every store conversion. Timing was coordinated to enable product specialists to arrive exactly 48 hours ahead of merchandisers to provide ample time for liquidating non-compatible products before the shelves were reset with new products.

Conversion
In August 2006, RGIS began its first store conversion in Saugus, CA. Over the next six months, RGIS deployed 33 certified crews across the country, including 160 merchandising managers and, at the project’s peak, 2100 merchandisers to convert 306 stores to the CVS model and liquidate approximately 30 percent in non-compatible product inventory. Daily progress at each site was reported and assessed against an established Time/Action Plan for each store. Turnaround expectations were enhanced by RGIS’ use of laptops with Air Cards to facilitate wireless Internet access for conveniently adjusting product and fixture orders directly from each store, when necessary.

The project reached a peak of 70 overlapping store conversions, with each store successfully coordinating the activities of its liquidation and reset teams. Throughout each project, product specialists pulled, scanned, and boxed non-compatible inventory; teams of fixture specialists moved existing fixtures and constructed new fixtures where needed; and merchandisers handled planogramming, tagging shelves, and displaying new products.

Post-Conversion
The RGIS-led conversions recorded a strong finish in March 2007—on schedule and within budget. As a result, stores that ranged from 5,000 to more than 75,000 sq. ft., in areas as diverse as Compton, CA and South Chicago, IL. Beverly Hills, CA and Minot, ND are now branded and compliant with a CVS look and feel. According to Sav-On/Osco Conversion Project members Ken Roberts and Jerry Humm, CVS has recognized RGIS as a “key contributor to the successful conversion of former Sav-On/Osco drugstores to the CVS/pharmacy format.”
 

SOLVING CVS’ PROBLEM
By virtue of its size, expertise, and reach, RGIS was selected to undertake the leading role in this CVS conversion project. Existing RGIS offices were able to provide most of the project specialists who spearheaded the liquidation process at each store. In many cases, availability of local RGIS talent resulted in a significant savings to CVS in travel costs. RGIS is extremely proud of the part it has played in helping CVS to successfully strengthen its position as the nation’s largest retail pharmacy chain—one of that company’s chief goals in undertaking the Sav-On/Osco acquisitions. Through successful store conversions in California, and especially Southern California, where CVS did not yet have a presence, RGIS’ attention to accuracy and its commitment to reliability helped to launch a new market for CVS and promote positive market growth for the CVS brand in that region.