CVS to open technology lab

CVS Health (NYSE:CVS) will be opening a technology development center in Boston this winter to further efforts in mobile applications and health-related technology initiatives.

CVS Chief Digital Officer Brian Tilzer told BetaBoston that the Innovation Lab will employ about 100 staffers, some moved over from the headquarters in Woonsocket, Rhode Island, and other new hires.

"We may not hire all 100 next year, but we're going to hire a lot," Tilzer said. The lab's focus will be on "building customer-centric experiences in health care."

CVS has tripled its investment in digital and multichannel e-commerce since he joined the company last year. The company has been creating apps, testing video conferencing with docs in Minute Clinics, and communicating about prescriptions via text messages.

"We see digital as the way we can connect our patients to the full (base) of health care services we offer, so they can access them in one place, when where and how they want…accessing all the services we offer but in a super convenient way. That's the vision we have for digital, but the question is how do we do that," Tilzer told the Boston Business Journal. "Our belief is it has to happen in an iterative way – we test, we learn, we try things and we see what she uses, what benefits her, and what helps her change her behavior from a health care perspective. We needed a lab that could support this rapid innovation."

CVS introduced personalized digital versions of its weekly print circular to shoppers in October 2013, and plans to improve on the product by adding new features to further personalize each ad.

The My Weekly Ad is garnering redemption rates that are seven to 10 times the rate of non-personalized offers.

The next step, according to Tilzer, will be to digitize the retailer's offers now printed on its notoriously lengthy register receipts for mobile use.

CVS isn't the first retailer to open an innovation lab—Walmart (NYSE:WMT), Target (NYSE:TGT) and Lowe's (NYSE:LOW) are early leaders there—but its choice of Boston is unique. Companies have been locating technology-focused division in or near California's Silicon Valley. But CVS wants to have the center close to its Woonsocket, Rhode Island headquarters so Tilzer can spend time at the facility and connect with startups that are developing new health-care-related products and services.

The new 15,000 sq. ft. office will be located at 116 Huntington Avenue, centrally located between the medical community in Longwood and the tech community in Cambridge.

The retailer will also select stores to function as labs. "These are stores that will participate disproportionately into the development of these solutions," said Tilzer. "We need locations where we can get real customer feedback in the right environment … and have the stores and customers participate in the rapid innovation ...Those programs that end up being successful, we'll scale them across our chain as rapidly as we can."

The locations are unidentified but will be in Boston, New York and Menlo Park, California.

CVS recently changed its name to CVS Health and stopped selling tobacco products in stores.

*A version of this story originally appeared in FierceRetailIT's sister publication FierceRetail.

For more:
-See this BetaBoston article
-See this Boston Business Journal story

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