Dive Brief:

• Building on its previous tech advancements, CVS plans to spend up to $3 billion on "digital enhancements to improve the consumer experience as well as our community locations," Shawn Guertin, executive vice president and chief financial officer, said during a Q4 earnings call Wednesday.
• The company reached 5.6 million subscribers to its CarePass program in Q4, a 40% increase from last year, Karen Lynch, CEO and president of CVS, said during the earnings call. Lynch attributed the increase in users to the pharmacy chain's partnership with Aetna.
• Nearly 80% of patients are using CVS' self-service digital tool to complete necessary forms ahead of their HealthHUB and MinuteClinic appointments, Lynch said during the call. Meanwhile, the company now serves 40 million customers via digital channels, a 10% increase over the past six months, she said.

Dive Insight:

Though the COVID-19 pandemic has been challenging for most retailers, CVS saw an increase in revenue last year. The drugstore chain attributed its growth to a rise in booster administration at its locations and declining COVID-19 expenses in its payer division. And as the company works on its digital strategy, Lynch noted that more than 2 billion visitors came to cvs.com last year, a 55% jump from 2020.

The retailer recently launched the CVS health zones initiative to address "social determinants of health in high-risk communities," Lynch said during the earnings call. The company currently is running this initiative in six areas, but it plans to expand into more options this year, Lynch added. However, that initiative comes as the company prepares to shut down 900 stores over the next three years to align with evolving customer shopping patterns. The retailer will begin shutting down about 10% of its brick-and-mortar locations in the spring.

"We will connect consumers in more places, in more ways and on their terms, with our digital-first technology-forward approach as well as an enhanced omnichannel health experience. These strategic moves will accelerate the growth of our foundational businesses," Lynch said during the call. 

But as CVS restructures its physical footprint and concentrates more on its digital strategy, Walmart is venturing further into the healthcare sector. In 2020, Walmart announced the national expansion of its Walmart Health stores after piloting the concept in Dallas, Georgia. Earlier this month, the retailer announced its partnership with Quest Diagnostics to introduce healthcare lab testing services via its website, allowing customers to buy more than 50 tests ranging from digestive and heart health to allergies and infectious diseases.