CVS Health’s Larry Merlo discusses rebranding, tobacco ban at TEDx event
WOONSOCKET, R.I. — During a recent TEDx event, CVS Health president and CEO Larry Merlo discussed the realignment of the company’s brand to "CVS Health" and its decision to pull tobacco products from its shelves.
The talk was given at a TEDx event using the TED conference format but independently organized by a local community.
At TEDx events, a screening of TED Talks videos — or a combination of live presenters and TED Talks videos — sparks conversation and connections at the local level. TEDx events are planned and coordinated independently, under a free license granted by TED. TED is a nonprofit devoted to spreading ideas, usually in the form of short, powerful talks.
Multicultural shoppers ‘key to the future’
Once considered a niche opportunity, the multicultural marketplace has become a mainstream imperative due to unprecedented growth in population, buying power and culture sustainability, according to a recent Nielsen report. These dynamic consumers are not only transforming the U.S. mainstream consumer, but also are reshaping how marketers and advertisers must use culture to connect and build loyalty.
“Multicultural shoppers may be the key to the future, not just because of their numbers, youth and economic clout, but because their unprecedented influence on the attitudes and consumption habits of non-multicultural consumers is upending the outdated assumptions and enlarging and expanding the multicultural market opportunity,” said Nielsen’s Monica Gil, SVP and GM multicultural growth and strategy, and Saul Rosenberg, chief content officer, in the report.
Already more than 120 million strong and increasing by 2.3 million each year — or 6,310 every day — multicultural populations are no doubt the growth engine of the future of the Unites States. Fueled by both immigration and birth rates, Hispanics, African-Americans, Asian-Americas and other multicultural people already account for 38% of the U.S. population, according to the Nielsen report titled, “The Multicultural Edge: Rising Super Consumers.”
What’s even more important for marketers is the multicultural buying power, which increased from $661 billion in 1990 to $3.4 trillion in 2014. That’s a 415% increase.
Not only do multicultural people possess significant buying power, but they also lead the way in effective years of buying power, exceeding that of non-Hispanic whites, according to Nielsen. In other words, multicultural populations are the fountain of youth for the United States, and will continue to be so for many decades to come. For marketers, it is essential to consider not only the short-term ROI of that spend, but also the long-term compound effect of a loyal, younger multicultural population with a much longer life span on the total long-term ROI of that spend.
Digitally connected ‘super consumers’
Super consumers, as defined by Nielsen, are a subset of consumers who drive the most value and are the most involved in a given category. They are the top 10% of households who drive at least 30% of sales, 40% of growth and 50% of profits.
Multicultural consumers are disproportionate super consumers in 15 major studied categories — including family planning, dried vegetables and grains, and hot sauce. Nielsen predicted that many more categories are likely to follow. The key to total market growth, according to Nielsen, is understanding how purchase behaviors are driven by multicultural consumer values, lifestyles, tastes and preferences.
Nielsen also suggested that marketers identify cross categories that appeal to multicultural super consumers, as doing so can be a shortcut to reaching them where they are most passionate and enables marketers to develop cross-category promotions and strategies. For example, Nielsen found that multicultural consumers who were super consumers of both the dried vegetable and grain category and the baby needs category over-indexed by greater than 20% on 13 additional categories, including men’s toiletries, refrigerated meal starters and shelf-stable meal starters.
These super consumers also are super consumers of technology and social media. This comes as little surprise when considering how technology can provide a bridge across both cultural and national borders.
According to Nielsen, multicultural consumers today are leaders in technology adoption, and these heavy consumers over-indexed against non-multiculturals on smartphone usage (82% versus 70%), mobile app duration (index of 130) and number of apps used (index of 142).
More specifically, heavy multicultural consumers are 32% more likely to be in the top segment of mobile users, averaging 73 website visits per month, and are 42% more likely to use an average of 46 apps per month. In all areas of mobile behavior, the percentage of multicultural consumers over-indexed non-Hispanic whites by 32% on number of sites visited and 42% on total number of apps used, according to Nielsen.
Individual social media apps also were tracked for the report, and these heavy multicultural consumers over-indexed non-multiculturals on such social applications as Facebook, Twitter and Instagram.
Clearly, multiculturals represent a significant opportunity for marketers and, as Nielsen stated, “companies that lead with multicultural insights to devise authentic sustained marketing strategies will reap the most profitable returns on their investment.”
Clicks, omnichannel shopping equal convenience
Today, convenience isn’t just about having a smaller box to shop in, or an easily navigated merchandising scheme where consumers can quickly identify what they’re looking for, grab it and go. Today, convenience is about clicks — as in: What are the fewest clicks to the buying decision? And how can the retailer best facilitate a shopping experience in their stores on the shopper’s smartphone?
Because today, convenience is omnichannel shopping, particularly on the smartphone.
“While the vast majority of retail purchases still take place in stores, the purchase-decision process increasingly flows through smartphones,” eMarketer noted in its latest report, “Omnichannel Trends 2015: Mobile Is the New Retail Hub.” “There are a few exceptions, … but for considered purchases, people are researching online before and during their time in a store.”
Digital has become a crucial part of the shopping experience. eMarketer cited a Forrester Research projection that by 2017, nearly $1.8 trillion in in-store sales, or more than 60%, will be influenced by digital.
eMarketer estimated that there were 145.9 million mobile shoppers in the United States in 2014, up 23 million from 2013. But they’re not buying on their phones — eMarketer estimates only 1.6% of total U.S. retail sales will be traced to mobile. Shoppers are using those phones to facilitate the shopping trip, however. Almost 2-in-5 are using the store locator function on their phones (39%), others are getting social feedback on a potential gift (38%) and a few are in search of in-store deals through their smartphones (33%).
More and more of those in-store deals will be delivered by way of such tools as iBeacon and other in-store proximity tools, eMarketer suggested. In a recent Placecast/Harris survey, 15% of mobile phone or smartphone owners indicated that they had interacted with such technology. And according to beacon platform Swirl, the majority of the top 100 retailers are actively testing beacon technology, many of them with systemwide tests. “Several department store chains and apparel retailers are leading the way, but retailers as varied as supermarkets and drug stores have significant deployments,” eMarketer noted.