The CPG Guys Podcast
Episode: Omnichannel Merchandising in the Digital Age with CVS Health's Zach Dennett
Date: October 11, 2025
Host: Peter V.S. Bond
Guest: Zach Dennett (VP of Merchandising, Consumer Health & Wellness, CVS Health)
Episode Overview
This episode dives into how CVS Health is pioneering omnichannel merchandising in the digital age. Host Peter V.S. Bond sits down with Zach Dennett to explore digital transformation, the blending of online and offline consumer experiences, leveraging data and behavioral insights, and the accelerating impact of influencers and social media on merchandising. The conversation covers localization, tech investment, personalization, rapid innovation, and the interplay between retail media and merchandising at CVS.
Key Discussion Points and Insights
1. Zach Dennett’s Role and Primary Focus at CVS Health
[04:54]
- Team First: Zach emphasizes building the right team environment and providing what colleagues need to succeed.
- Three Strategic Pillars:
- Assortment & Localization: Personalizing product selection for each store via advanced tech/algorithms.
- Pricing & Promotions: Simplifying and optimizing both for everyday value and for promotions, mindful of economic pressures.
- On-Shelf Availability: Ensuring products are physically available for customers at every location, in close partnership with supply chain and store execution.
- Growth Engines: Highlights delivery marketplaces (DoorDash, Instacart, Uber Eats) and supplemental benefits/Medicare Advantage as fast-growing sectors.
"We are investing heavily in the tech, we are investing heavily in the algorithms and the processes that enable us to localize the right assortment and the right stores."
— Zach Dennett [05:33]
2. Omnichannel Experience: Merging Instore and Digital
[09:12]
- Consumer Mindset: Customers don’t see themselves as “channel” shoppers — they just shop, expecting seamlessness.
- Loyalty Example: 80% of coupon redemptions happen digitally, even for instore purchases.
- RX Attach: Blurring lines between pharmacy and front-of-store via digital, ensuring customers’ needs are met across both.
- Delivery Marketplaces: Reputation, trust, and physical footprint all influence which retailer a customer chooses in a marketplace environment.
"Customers don't shop channels, customers shop combined experiences...let's give you an example on loyalty... 80% of coupon redemptions are currently digital."
— Zach Dennett [10:00]
3. Digital Influence on In-Store Purchases
[12:27]
- Digital Permeates All: Nearly every consumer is digitally influenced—even if not actively “digitally engaged” with CVS specifically.
- Massive Multiplier: The digital influence on purchases is 3x the sales directly originating from the CVS app (conservatively measured).
"The digital influence is three times as big as the actual sales from the app."
— Zach Dennett [14:03]
4. Personalization in Action
[16:13]
- Hosts share how the CVS app delivers unique, personalized offers, sparking good-natured rivalry about who gets better deals.
- Zach appreciates the anecdote, framing it as a testament to the personalization engine.
5. Sourcing & Merchandising Innovative Brands
[17:30]
- True Innovation: Real, unique solutions (not copycats) are highly valued.
- Community & Scale: Preference for brands with existing digital followership, ready to scale.
- Examples:
- Mary Ruth Organics: Identified a real consumer pain point—created liquid vitamins as an alternative to pills.
- Neurogum: Brought in early, later saw a viral spike; demand for different flavors/versions followed.
"We need clear differentiation and real innovation...once you get a product that's solving a customer need in a new way, then we start looking and asking, do you have an existing community?"
— Zach Dennett [18:13]
6. The 360 Customer Care Journey and Interdepartmental Collaboration
[22:23]
- CVS tears down silos between front store, pharmacy, and clinics to deliver seamless care.
- Brands are seen as partners offering complementary solutions.
7. Retail Media Synergy with Merchandising
[24:17]
- Strong team alignment between merchandising and CVS Media Exchange (CMX).
- Combining retail media, marketing, and merchandising amplifies both consumer reach and sales results (high incremental ROAS).
- Tentpole campaigns (e.g., Big Fall Wellness) work best when all forces are united.
"When you combine merchandising and CMX and marketing...you really get the magic...the incremental ROAS...is a great use of brand money."
— Zach Dennett [25:44]
8. Loyalty Data & Behavioral Insights Shaping Merchandising
[27:48]
- Loyalty data and Extra Insights fuel every merchandising decision, from real-time offers to long-term planograms.
- Two success stories:
- Femcare: Customer insights led to increased menopause focus and reordered planograms—major market share gain.
- Vitamins: Loyalty data showed younger, gummy-preferring shoppers; CVS rapidly adapted and saw double-digit share increases.
- Local assortments are built using granular loyalty data—what’s right for one store won’t work for another.
"Everything we do in merchandising is informed through a deep understanding of the customer supported by Extra Insights."
— Zach Dennett [27:51]
"The data is obviously not always clairvoyant, and we get to add merchandising art on top of it – but it's a really great basis to start to layer on merchandising intuition."
— Zach Dennett [30:54]
9. The Power and Challenge of Influencers & Rapid Trend Cycles
[33:43]
- Younger generations trust influencers over traditional experts.
- Platforms like TikTok and Instagram can create rapid product spikes.
- CVS constantly tracks trending topics to catch trends early and, if necessary, override inventory algorithms.
- CVS believes its pharmacists remain trusted authorities across generations.
"Speed of trends are changing dramatically and the rate at which a product goes from never heard of to its major spike to back down is becoming faster and faster..."
— Zach Dennett [34:42]
10. Looking Ahead: Merchandising in the Next 3–5 Years
[39:17]
- Foundation remains: localized assortment, optimized promos, in-stock product, and customer-centric service.
- Future focus:
- Using stores as fulfillment hubs to enable fast delivery.
- Reimagining product innovation: adapting agile, digital-style micro-testing (rapid iterations) in physical retail.
- Collaboration with manufacturers will shift toward faster innovation cycles to meet ever-accelerating trends and consumer demands.
"If trends are going faster, innovation is going to have to be 10 times faster... Not in the lab, but in real life with real customers who are spending real money. And if we can start doing that, I think that’s going to make retail a really interesting place."
— Zach Dennett [41:22]
Notable Quotes & Memorable Moments
-
On Omnichannel Mindset:
"Customers don't have in their mind 'I'm an e-commerce shopper, I'm an in-store shopper.' Customers are shopping CVS and it's our job to show up for the customer how they want to be."
— Zach Dennett [09:45] -
On Personalization & Loyalty:
"It's about giving the experience that is right for each of us. So it certainly works in our case."
— Peter V.S. Bond [16:50] -
On Trend Monitoring:
"What’s trending on TikTok is now something that we have access to and we're able to see what are some of the very early blips...is that something we're interested in?"
— Zach Dennett [35:47] -
On Future Product Innovation:
"There are going to be some manufacturers who lean into this and figure out how do you change the product innovation cycle to make it 10 times faster?"
— Zach Dennett [41:09]
Timestamps for Key Segments
- [04:54] Zach’s team focus and CVS’s three merchandising pillars
- [09:12] Omnichannel milestones & merging digital with in-store
- [12:27] Digital’s (massive) influence on store sales
- [16:13] Personalization & loyalty anecdotes
- [17:30] Criteria for and examples of bringing emerging brands to CVS
- [22:23] Collaborating for the full health journey
- [24:17] Coordination between merchandising & retail media (CMX)
- [27:48] Loyalty data powering assortment and success stories
- [33:43] Influence of social media, influencers, and rapid trends
- [39:17] CVS’s merchandising evolution: delivery, hyper-local, and rapid innovation cycles
- [41:22] The vision for much faster product iteration "in real life"
Final Thoughts
This episode gives a detailed look into the sophistication of CVS Health’s omnichannel merchandising, emphasizing how digital and data are reshaping category management, product innovation, and the customer journey. Zach Dennett’s insights spotlight the importance of tech-enabled localization, personalization, partnership with retail media, agile trend-tracking, and the need to adopt digital mindsets in merchandising and innovation cycles—painting a compelling picture of the future of retail.