Personalization at scale requires moving from shoppers to signals, and Parbinder "Parbs" Dhariwal, VP and General Manager at CVS Media Exchange, shares why the retailer’s media network is focused on a future where every aisle, every screen, and yes, every long register receipt, is part of a larger conversation between brand and consumer.
Transcript
This is PYMNTS on Air, a PYMNTS podcast, in-depth conversations, expert panels, and exclusive research brought to life by PYMNTS Intelligence. In this Parbinder 'Parbs' Dhariwal, VP and General Manager at CVS Media Exchange, tells PYMNTS CEO Karen Webster why the retailers media network is focused on a future where every aisle, every screen, and yes, every long register receipt is part of a larger conversation between brand and consumer.
Karen Webster:Turning every digital and physical touch point into a measurable marketing opportunity. My conversation with Parbs Dhariwall, vice president and general manager at CVS Media Exchange, will explore how CVS is redefining what retail media can be. With its vast customer reach, trusted health and wellness brand, and the power of extra care loyalty data, CMX is building a next-gen media ecosystem that bridges digital engagement and the in-store experience right down to the printed receipt. We'll discuss the impact of retail media on retail profitability, how it drives deeper personalization, and represents the next great evolution in commerce.
Parbinder Dhariwal:Looking forward to it. Thanks for having me, Karen.
Karen Webster:So retail media is a hot topic, obviously, in retail. It's been called the next growth engine for retailers. You know, even rivaling other traditional ad channels in profitability contribution to margin. Let's start with the basic question. Maybe it seems like a silly basic question, but how do you define retail media networks and why are they so important now to the industry overall?
Parbinder Dhariwal:Yeah, I think defining retail media, I think if let's define it through the role that retail media takes on, um, that I would say has never really been taken on from any other um any other channel previously. So if you think about what retailers have in terms of a relationship with the customer, and they have uh information on that customer through whether it's through transactional data or loyalty data or otherwise, they also have transaction data, um, actual purchase behavior data on that particular customer as well. And that relationship plus the loyalty plus the transaction data really sets retail media apart from any other medium. Not even social is able to piece all of those constituents together. And that's what really changes the role that retail media takes. More so, understanding customer journey and understanding customer journey in the face of what's happening across retail is also something that is really unique to retail media and its business. And it's really look, it's the next wave. We saw it with search, we saw the wave with social, and we've seen those waves come and some you know maintain a continued growth and stability. But we're now we're seeing retail media, and the differentiator here is all of the things that I've talked to you about, which is that relationship from a brand perspective right the way through to transactional um uh behavior that we can uh that we can map to add attribution.
Karen Webster:So I'm a CVS customer, so I know all about being an extra care member. Um, we'll talk more about that in just a minute. But when you think about the power of retail media using first party data, um how does that how does that shift the way you think about allocating budgets across the spectrum for acquiring and retaining customers? Traditional advertising, obviously the retail media networks where it can be very personalized and contextual, but other strategies as well.
Parbinder Dhariwal:Yeah, it's again, it's very varied. I think you know, whether it's retain or acquire uh particular customers or there's uh new product launches that you have. I think every brand at every different stage with different consumer sets and different um audience uh cohorts have have different objectives. I think whether or not we're we're we're doing any or all of those within the campaign parameters, and really understanding and and you know the the old sort of advertising 101s still come into effect. What's driving the KPI? What's driving that we what are the outputs that we need to drive from an advertiser perspective? And how can we bring all of that together? When we start to dig a little deeper than that and go another layer down, is okay, well then what are some of the channels that are gonna help hit some of those constituents and KPIs? You know, if there's just, you know, I want to be where the consumers are and where they're shopping, and I want to be only within the CBS environments, well, then there's gonna be really two constituents. You you you push the advertiser onto your own and operated CBS.com in our instance, or you push advertisers into our store network, right? Where can we're seeing you know almost five million consumers come through on a daily basis. So the the crux of how we connect the consumer to uh the advertising message is is really it really starts, that journey starts with understanding what the advertiser and the brands want to achieve. The piece that I would say across this, and and I think something that differentiates CMX above and beyond a lot of the industry players is to your point, and thank you for your business. Uh, the the specific connective point that we have with extra care. CMX is built on loyalty. It's predicated on really understanding transactional behavior from a digital to a physical, physical to a digital, but everywhere and every everywhere and everyhow. And that is something that sets us very uniquely apart from the rest of the industry because loyalty is a connective tissue. It gives us an enormous amount of signal, regardless of what kind of traceable or non-traceable tender that that consumer is using. And more importantly, it really enables us to provide much more personalized experiences to their journey within the CVS ecosystem and market as an overall, right? We're also not, you know, totally sold and married to the fact that a consumer, even though they're an extra care consumer, will buy products at CVS. They do buy across rest of market. And we're seeing some tremendous success of the data set that we have, the signals that we that we garner, and then more importantly, the audiences that we're build for brands to drive total market growth.
Karen Webster:How do the KPIs differ from how you establish measures of success for the retail media network and other advertising channels? Because I would imagine that they're quite strategic. It relates to obviously the persona, what you know about them based on the extra care data that you have, other first-party data that you can you can obviously contextualize and enrich that with. But there's probably also something related to products and things that you're interested in driving more sales of, more margin from, that factors in as well. How would you describe the difference in KPIs?
Parbinder Dhariwal:Yeah, it's so um the can I can I, if you don't mind, I'll answer that just sort of ever so slightly differently. I think when we when you have the effectiveness of the data set that we do, and and so just so you're aware, like extra care has 90 million addressable consumers within within the data set. And our data set is really married to the beauty, health, wellness, personal care categories, right? Like it's very specific. It's not broad, it's it's specific to certain categories. When we think about KPIs or more importantly, even insights, the insights that we can garner from that data set really drive our engagement with the brands. I'll give you an example. If we know that there is a consumer who comes into our store environments and we know that they buy a certain type of lip gloss and they buy it monthly, and we know that they will never change from that particular brand, it's gonna make sense for us to push that particular brand of lip gloss to that consumer. However, we might also know that that consumer purchases a facial care product, uh cleanser, for example, at the same time. And we've seen based on their past history that they switch brands. They switch brands maybe due to price or maybe due to a particular brand or so on. But they'll have to be. Or social influencers, social influencer, or influencers, or yeah, what they've seen on their latest uh on their social feed. Um we know that that consumer is primed for brands in the in the facial cleanser space to be positioned an ad that is going to move them away from a particular brand to another. They're switchers, they're they're not loyal in a particular category to a particular brand. So how do we move them? But similarly, they are loyal in the lip gloss space. But we also know, which is actually fascinating, um, we also know that a significant number of those customers will also treat themselves to candy on the way out. So just as we know that they're in the mode of buying lip gloss and facial cleanser, they might grab themselves a bar of chocolate on the way out. So they're also primed for delivering for us to deliver message to those consumers from some of the sweet confectioners. So that level of insight and the way in which we can utilize the insight and layer on that around people's beauty, health, wellness, uh, and personal care desires and needs every single day is is really what drives our differentiation and actually helps us drive the KPIs, back to your question, around how we work with brands and how we deliver those KPIs back to brands, because it has to be a partnership. And I think that's the piece that retail media has really changed the perspective on the industry, the ads industry as a whole, is how do we partner to ultimately drive growth for retailer, growth for the brand, and much more personalization for the consumer as well.
Karen Webster:It's amazing. It's it's impossible to walk into CBS, pick up a prescription, and you know, we have other things on your shopping list, not to buy like four other things that were never on your shopping list. But that all obviously goes into your database and you can look at patterns that, you know, they're not impulse purchases, but it's like, oh, right, I need this, or oh, that looks interesting. I've never tried that. Um, that kind of serendipity is hard, is hard to capture um unless you actually have the mechanism at the point of sale to really go back to the loyalty membership, and then use that data to power those insights and other things that may be relevant to not only that consumer, me, but categories of consumers like me.
Parbinder Dhariwal:Yeah, it's it's well, I would say some people say that they can do it, but there's a lot of guessing in there. And you know, we we it's actually an ad slogan that we had recently saying it's you know, it's not it's not guessing, it's data. The messages that we push to every single one of our 90 million extra care consumers is personalized based on their previous buying behaviors, based on the brands that they are loyal to, the brands that they will potentially switch from, and more important, or switch from and two, and more importantly, the the brands that they're going to be much more open to receiving message from. Because we know that that when you drive that level of personalization, you drive that with the right message and the right creative, and you deliver that in the right frequency, and actually more importantly, on the right channel to them. And we know that that consumer, we see them on Instagram or any other meta property, or we see them on Reddit, or we see them on the on the open web. We're able to think about delivering all of those personalized messages to them. And the last thing I'll say on this is consumers expect it. They expect a level of personalization and that you as a brand CVS know me. And sometimes you need to know me better than I do. And the advertising needs to show up in there, in the way in which we deliver that level of sort of personalization uh to that consumer.
Karen Webster:How do you think of the retail media network as a as a traffic driver, right? As a channel, as establishing channel preference. I mean, obviously, when people walk into the store like me, you buy more things, you fill the basket, you do things that you wouldn't otherwise necessarily do online when it's a little bit more intentional. But yet both of those channels are quite important. How do you think of the ready retail media network in in establishing channel preference or establishing brand preference across channels?
Parbinder Dhariwal:Yeah, it's it's definitely part of the mix, right? It's uh it's part of the mix in terms of driving velocity within stores. It's within the mix on driving category growth for brands and for the merchant organization. It enables us to think about cross-category growth as well. So we know how we can move consumers from one part of the store to another based on some of the messages that we've been identifying. I'll give you an example of that in our store environment. Um, in around about 2,000 of our uh 9,000 locations, we have a waiting area screen. That waiting area screen is normally located in and around the pharmacy area. Uh, average dwell time at the pharmacy is probably around about three minutes as consumers are waiting to see a pharmacist and pick up their meds. Um, that is a very prime opportunity for brands to build message for consumers and push that consumer back into the store and back into the aisles. Because more often than not, I think in the vast majority of our store locations, the pharmacy counter is at the back of the store.
Karen Webster:Yeah.
Parbinder Dhariwal:You've got to come back through the store in order to exit the store. Um, the the way in which we've seen really strong success in growth, in whether it's sales uplift or incremental sales, um, is through those screens. Um there's five million people that come through our stores every single day. If we can message to those consumers in a way that is, you know, it's additive to their shopping experience. It's informational in terms of the way in which we're providing inform uh uh providing message to them. And then more importantly, pushing them back into the aisles in order to buy product, it's a powerful medium, right? So we continue to think about additive ways based on our consumer journey. And and the piece that I would say, which is I think is really important when we think about retail media as a whole, is that retail media needs to fit into it's the hand that fits into the glove of the retailer. You've got to truly understand the retailer and the consumer journey within the retailer, and then how does the retail media business support that journey? Create the right level of friction, but support it, support it in terms of uh driving traffic and velocity. And we see the vast majority of our transactions are happening in store. So, how do we use mediums and channels to drive consumers in store, then also capture their attention while they're in our store environments as well.
Karen Webster:We've talked about the things that work well. What are some of the things that don't work so well?
Parbinder Dhariwal:Oh, that's a that's a loaded question, I believe. Um there's a lot of things that don't work well. Um, I think the um, you know, there's there's a lot of chat around measurement within this sector um and what measurement is and what measurement isn't. Um my take on this is that there needs to be transparency around the way in which everybody measures. Uh, there needs to be transparency around what you're modeling and what you have that you're not modeling in terms of your overall data set. Um, I think there needs to be more transparency around your data set and what how that's how that data set's made up and um and and giving brands more visibility around that. Um I you know, really it's not the industry's not really been around a long time.
Karen Webster:Yeah, it it is still it is still new.
Parbinder Dhariwal:It's still new. We're still learning, we're growing. I see that there is a you know a strong level of collaboration that happens across the retail media industry. Um and a lot of learning and shared learnings that happen as well. But I I think most importantly, you know, brands need to lean in. It's it's a little more complex than some of the other mediums that and channels that they might be buying today. And together with retail media networks, um, internal merchants and marketing folks within those retailers, the brands themselves, the shopper marketing teams, really need to come together to find how do they really leverage retail media to not just be another channel, but an underpinning to the way in which they're thinking about all of their advertising needs, just given the wealth of data that is sitting within these retail media networks, and not just the wealth of data of first party at the front end, but the attribution data that can come at the back end of that as well. And if we crack that nut and I see it in pockets, the success is uh is exponential.
Karen Webster:Harps, where is there still friction from the consumer perspective that you think needs to be resolved and some of the things that you think deeply about with your team in making not only the offers more relevant, but easier to understand, know about, and take advantage of?
Parbinder Dhariwal:Yeah, I think friction, um, I think this is part and parcel of you know retail media as a whole, because of where we were born out of and born from within retailers. Friction from a consumer standpoint is when we're messaging to a consumer, we've got to make sure that the that message is joined up across all of the different touch points. So whether it's marketing teams messaging or retail media messaging or other loyalty promo messaging that's going out to consumers, having that as a you know, consistent touch points across all of those different mediums so you don't over you know create more frequency than you need to with consumers, that you don't um create a negative sentiment with the brand by over-messaging. I think that's really important. So while personalization is the key driver here, personalization not being not over frequence, frequency and message, I think is really key and joined up. So that is still something that we as all as retailers need to work, continue to work hard on. Um, and I think we'll get there. And with, you know, at CBS, we've made some really big strides on that. I'll give you, I'll give you an example here. We've earlier this year, um, we launched our temple strategy, which was a redefined tempole strategy. It was under the umbrella of a one CBS approach. Uh one heart approach, uh, which is the our internal branding around this initiative, really puts the consumer at the center of what we do and triangulates the touch points on that consumer. Those triangulation is three three areas. Number one is the merchant organization, the kind of the merchandising that we put together for that consumer for that event. So um, you know, we just had our uh Epic Beauty event, we have that twice a year. What's the merchandising strategy there? And it's all driven through the merchant organization. The second leg to the stall is the marketing organization and how the marketing organization says, okay, well, we're going to pull together the assets here, and these are the channels that we're going to operate in, and this is how we'll go to market and build awareness for this particular event. And then the third leg of the store is the retail media network. So the retail media network will come with very specific offers. We'll will really um uh blow out the message across the uh a ton more channels. We'll make sure that we continue to just elevate the overall uh experience of the event and so on. But that level of triangulation has driven incredible results for us as a business. And we'll continue to see growth in that area going into next year, but um more of that, more of the ways in which the individual teams work together to create less friction with the consumer and and uh and show that everybody's joined up as uh as we're messaging to market.
Karen Webster:I want to go back to your lip gloss customer. You know that they buy the same lip gloss, and maybe they do that you know every month or whatever frequency is is appropriate. Um what about taking that information and putting that on subscription? Hey, you can have this sent to you. Now that doesn't get them in the store necessarily, but it will still get them in the store because they probably come into the store to buy lip gloss and other things. I'm just curious how you think about taking some of that data and thinking about activating different approaches to creating more of that um sticky connection with a customer you know does the same thing month after month, week after week.
Parbinder Dhariwal:Yeah, it's a really, really good point. And and um I don't I don't have visibility into what the overall sort of product roadmap is there. Um one thing that we do ensure that we have is you know, our digitally enabled customers often drive into a store environment in terms of their overall purchase. So we know, for example, um just to give you an example, just to give sort of help bring this to life, and I'll come back to you, come back to your point around the subscription model. We know that 52% of our customers who start a search in an online environment across our app or across our web come into the store environment within 48 hours to purchase the product. Now that gives us a sense of understanding that wherever that consumer starts their journey and by whichever frequency they buy that product, we know how to connect all of the dots on that. And and I would say, yes, that primes us very much so for you know building subscription models and otherwise um uh to to bring customers back. And if you think about it, really pharmacy and and what we have dispense at the back of the store is really a subscription model too, right?
Karen Webster:Absolutely, yeah, absolutely.
Parbinder Dhariwal:And um, but we're what we're trying to do is is again, it it's understanding the journey for the customer and understanding how that customer moves between different mediums in order to buy different products, depending on the product, depending on the need state, depending on the time, right? Like there's many different sort of factors that go into that. Understanding that and bringing that to life is is something that has a lot of value for brands, but it also has a lot of value for the customers as well. But yeah, and obviously a feature from that could be the one that you suggested.
Karen Webster:Harves, I have to ask about the paper receipts. Oh my gosh, it's like just keeps coming out of the point of sale. And I love them, but I forget about them.
Parbinder Dhariwal:Isn't it?
Karen Webster:Do you consider that part of your retail media network or no?
Parbinder Dhariwal:It's it's not, it's not. And and and um I was gonna joke by saying, you know, we're planning on making those receipts longer. Um, but um, I don't think they're already really long. Um, jokes aside, I think there is an opportunity to digitize that that receipt. Um and you can have that sent to um uh to your email, you know, in the same vein. There uh some people like those receipts.
Karen Webster:I love those receipts. I can see people in front of me in line. They're they're covered, they covet, they like fold them, they don't just throw them in the bag, they fold them nicely and put them in their in their handbags. It's I I I get it, but it's um I I I always forget to redeem them. That's my problem. It's a differentiator for us. Well yeah, let's let's let's say that for a fact. It's uh it's for sure. I'm sure that is. I mean, final, final point on the retail media network. When you think about it, this is an ecosystem that you're creating. And you know, thinking about nurturing and growing an ecosystem is in and of itself a you know really interesting um test of business model and the levers that you're using to generate more stakeholders in the ecosystem, brands, consumers, obviously, what you're looking to do as a business platform. How does taking an ecosystem approach to the retail media network change how you think about your product roadmap and how you want to grow and monetize that group of stakeholders?
Parbinder Dhariwal:Yeah, what a great question. Um, I think about this a lot. And um the I truly believe as a leader within this space that when we build ecosystems or platforms or functionality within the retail media business, it should benefit and drive the entire enterprise. Whether we're building AI tooling and we just launch some AI tooling, um, whether it's you know we have an AI media planning tool, an AI audience building tool, an AI optimizer optimizer tool, which optimizes campaigns in flight. Whether we're looking at that level of technology or we're looking at our overall ad tech stack or the what we're doing in terms of our data enhancement programs, everything that we do should really enhance the entire enterprise. And we should we will not as a as a uh as a business look at this ecosystem to be self-contained. It should have tentacles within the rest of the organization and drive growth for the enterprise. So that's really the yes, we are here to drive engagement for our consumers. Yes, we are here to drive uh more velocity within our store environments, but but but I think that a lot of the the nuance work that we do has clear benefits um for the rest of the uh enterprise too.
Karen Webster:Parbs, thanks so much for a great conversation. It's nice to see the work in action as a customer. I can sort of see the evolution of of the programs, and it's uh it's nice to see. So think of me when you're designing your next uh set of set of products and and uh and campaigns.
Parbinder Dhariwal:I will do. Thanks, Karen. Thanks for your time.
Karen Webster:Thanks, thanks, Parbs. Bye bye now.
Narrator:That's it for this episode of the PYMNTS Podcast: The Thinking Behind the Doing, Conversations with the Leaders Transforming Payments, Commerce, and the digital economy. Be sure to follow us on Spotify and Apple Podcasts. You can also catch every episode on payments.com forward slash podcasts. Thanks for listening.