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From in-store to dotcom: The war of retail pharmacy

Throughout the past few decades, industries and consumers alike witnessed the emergence of the cola wars, burger wars, and many other memorable brand rivalries.

At the time of the “cola wars,” healthcare was a substantially smaller portion of the overall U.S. economy. But times have changed. In the last 40 years, healthcare has doubled its influence in the economy, growing from 9% to 18% of GDP. 

Many people in the U.S. would say their most frequent touchpoint with the healthcare industry is with their local pharmacy—and as a consequence, a pharmacy war has been ongoing for years. Two giants, CVS and Walgreens, stand as the two largest pharmacy firms in the U.S., based on prescription drug sales. Both have articulated customer experience strategies and have invested significant resources in improving the experience customers have with their brands. But these strategies have differed, and have led to different results.

Universal metrics 

Recently, our consultancy set out to develop and validate a patent-pending model that shows how brands receive more value from customers when they help customers achieve their goals, which we call Customer Performance Indicators (CPIs).  There are 15 such CPIs, goals that people aim to achieve in their lives whether they are acting as a consumer (which accounts for a small portion of their time) or simply living their best lives (the majority of their time).

Like a brand’s fingerprint, the importance of each CPI to its customers, and the ways to advance customer success on these goals, is unique to each brand. While exploring over 150 brands across industry, a telling narrative about the two retail pharmacy giants emerged.

At an overarching level, CVS and Walgreens are rather similar in their abilities to assist their customers in achieving customer goals. For instance, from our research, we found that people most value a pharmacy that can help them achieve three specific goals: makes my life simpler, gives me options, and easy access to the information I need/want. For each of these, CVS and Walgreen’s customers say that the two companies are quite similar in their ability to help them achieve these CPIs.

However, CVS outperforms Walgreens on three other goals, makes me feel good, motivates me, and saves me money.  Customers are quick to note the CVS ExtraCare rewards program motivates them to shop CVS and is great at helping them save money.  A familiar and consistent store layout and friendly/helpful employees are also frequently cited by CVS customers as ways the brand makes them feel good. 

As we turn to digital channels, we see CVS distancing itself from Walgreens in terms of helping customers achieve CPIs. CVS spent years innovating in the digital space for customers and has spoken about the enhanced financial value of having customers interact with the brand through digital channels. Furthermore, CVS has opened a Digital Innovation Lab where new digital tools are created to make the customer experience more convenient.

These efforts have clearly bore fruit in terms of customers recognizing how CVS helps them achieve their goals. CVS’s website/mobile app falls in the top five brands for overall CPI score across more the three dozen websites/mobile apps evaluated through our research.  Bolstering CVS’s statements about the value of customers who interact digitally, CVS’s website/mobile app also achieves one of the 20 strongest Future Customer Value scores across more than 150 total brands evaluated by Gongos – the second highest across websites/mobile apps. 

More specifically, CVS considerably outperforms Walgreens on delivering against four CPIs: easy access to the information I want, makes my life simpler, saves me time, and saves me money. When asked to explain how CVS’s website/mobile app helps them achieve their goals, customers cite the easy layout, intuitive navigation, easy linkage to the CarePass membership program and ExtraCare rewards program, and savings from ubiquitous coupons.

Reaching across the aisle

Walgreens, no doubt, intends to close the gap with their largest competitor. Last year, Walgreens announced a partnership with Microsoft and Adobe to create a “world-class digital experience and customer insights platform to deliver personalized healthcare and shopping offerings.” Gongos will be keeping an eye on how these and other developments impact Walgreen’s customers’ CPI achievement as we refresh our findings annually.


Since March 2020, healthcare has been at the forefront of news, politics, and everyone’s daily lives.  As our society continues to define the “new normal,” leading pharmacies will be at the forefront of these changes. Customers will continue to expect their pharmacy to be even better at helping them achieve CPIs and the pharmacies that excel will reap the rewards of more value from customers. We look forward to watching these trends unfold, and to measuring success across these new universal customer metrics.

Steve Crewdson is senior research lead & Susan Scarlet is VP, strategic branding, Gongos.

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