Target Rx?


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Target, the mega-discount department store retailer, has had more than its share of operating and consumer trust woes over the past two years ( This month, in a deal worth close to $2 billion, Target and CVS Health have entered into an agreement where CVS Health will purchase and operate Target’s pharmacy and clinic businesses.

Briefly, CVS Health will rebrand and operate the more than 1,600 current Target in-store pharmacies, and they will also operate pharmacies in new Target stores that offer pharmacy services. In addition, CVS will rebrand about 80 Target “MinuteClinic” locations; and the two companies will co-develop small stores which would be branded as TargetExpress and include a CVS pharmacy. And, what about the 14,000 in-store Target health care employees? They will be offered comparable positions with CVS.

This is a deal that seems to be beneficial for both parties. For CVS, the arrangement is expected to dramatically increase their sales and prescription volume. For Target, though their pharmacies received high performance marks from consumers (while CVS received much lower performance marks), the deal enables them to offload an attention-diverting, peripheral, highly regulated, and small (less than 5%) element of their business. Further, the deal enables a cash infusion to help make up for its $5 billion write-down in Canada.

In official FAQ communication coming from Target, the company has identified several potential customer benefits:

– Target customers will have access to CVS Health’s pharmacy care services and medical clinic services

– CVS Health’s low-cost generic drug option will be available to Target customers who pay cash

– CVS Health programs (Pharmacy Advisor, Specialty Connect, and Maintenance Choice) will be available to Target customers to help achieve better medication compliance/adherence through improved convenience and enhanced pharmacy care consulting

Both companies have assured their customers that there will be a smooth transition, saying they are “committed to maintaining an exceptional level of service.” After the deal closes, CVS Health’s loyalty program, ExtraCare, will be available at all Target store pharmacy locations. Services such as prescription transfers are also expected to benefit customers, with access to medications at both CVS pharmacy locations in Target stores and CVS Health stores.

Some important consumer questions remain, however. Many of them are data-dependent. The ability to micro-segment Target shoppers, by location, will potentially offer insights to CVS Health regarding what programs and products to emphasize. The Target-CVS deal doesn’t indicate whether such detailed customer profile databases will be shared; but it certainly would benefit both sides. Also, there could prospectively be selective promotion (again requiring shared customer databases), but that remains to be seen.

Target and CVS are operating at a time when understanding customer personas has become increasingly pivotal, and it will be valuable to engage hybridized current and new Target-CVS customers on both a requirements and enterprise cultural blended basis.

Taking data (and qualitative/quantitative customer research) to the next logical step, the more both chains can learn about the in-store behavior of these new customers the better for all. For example, ethnographic study of hybrid Target-CVS customers would offer a good deal of insight regarding product categories, store layout, promotions, etc. Quantitative advocacy research would enable them to learn more about melded brand, communication and shopping opportunities (

What is fairly certain is that the experience for these Target-CVS customers, whether new or current, will need to equal, and hopefully exceed, shopping experiences in each chain. That’s what will help determine whether customer basket, and store, sales increase or remain where they are.

As is so often the case, customer experience data will be essential to producing positive results (

Michael Lowenstein, PhD CMC
Michael Lowenstein, PhD CMC, specializes in customer and employee experience research/strategy consulting, and brand, customer, and employee commitment and advocacy behavior research, consulting, and training. He has authored seven stakeholder-centric strategy books and 400+ articles, white papers and blogs. In 2018, he was named to CustomerThink's Hall of Fame.


  1. “Target” was the final jeopardy answer on tonight’s Jeopardy quiz show. The question was, in effect, what major retailing chain ‘missed the mark’ and closed all of its 116 stores in Canada? Only one out of the three contestants got the right answer.


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