CVS Chief Merchant Musab Balbale on Why the Front Store Is Its Future | Live from Shoptalk 2025

Hello, everyone.

This is Omnitalk Retail.

I'm Chris Walton.

And I'm Man Mazinga.

And we are finishing up our day one coverage from Shop Talk.

All downhill from here, guys.

Yes.

Not like you have anything coming up after this.

No.

Yes.

Yes.

The work is never finished, Dan.

But, yes, we are here once again live from the avalara booth.

Booth 14.

No, 1554.

Wow.

I got Shop Talk dyslexia coming my way.

But standing between us, Anne, is a man who should need no introduction because he's gonna be on stage with me in about 30 minutes as well.

Maybe an hour, actually, technically.

But I've got Musab Babale, the senior vice president and chief merchandising officer at CVS Health.

Musab, happy first day of Shop Talk.

And thanks for being with us at omnitok.

Thanks.

It's exciting to be here.

Did you guys see the two puppies?

No.

I have heard about the two puppies.

I heard, though.

That is like taking bizarre experiences to a whole new level.

I mean, they're puppies, though.

They're puppies.

They're going to get people.

Get people to stop.

Did you want to take one home?

We talked about that.

We talked about, you know, coming home with a surprise puppy for the kids.

Get some merchandising ideas for CVS Health.

Or not with the puppies.

We're staying.

We're staying away from that category.

Not in your baliweg.

No, no.

We got toys, we got food, we got.

We got pads, but not the puppy itself.

Draw the light of dog food.

Right.

Well, Musab, let's.

Let's dive into a little bit about what you.

You oversee in your role at CVS now, what departments are underneath you?

What kind of work are you doing day to day?

Yeah.

So I'm general manager of our front store business.

So that is everything in this retail experience.

That's not the pharmacy.

Yeah.

So across the categories, across our digital business, everything that sort of interacts with the consumer.

Okay.

And tell us a little bit about.

There's been some big news.

You guys are testing some new formats with.

What do you think about that front of store experience?

Like, where do you want to take it?

What do you want to do with it?

You know what's really interesting, and we're going to talk about this in a little bit, is that our stores are oftentimes thought of as pharmacies.

Yeah.

Any sense of how much of our traffic is from the front store?

What would you guess?

I don't know.

This is why I'm Very glad that we have you because I haven't seen it.

I don't even know when I prepped the interview.

What would you guess?

What would you guess?

Like, I don't know, 60% of the business.

What the traffic, the traffic that goes to front of store.

Front of store traffic.

What percent of the traffic is driven by front of store items?

Yeah.

65.

You guys are close.

Three quarters of our traffic in the retail experience is front of store.

So the front of store is incredibly powerful as part of our total sort of retail.

Yeah, that's why I go to store.

It's kind of mind blowing.

I mean, I remember you told me it's majority of it, but yeah, it's kind of mind blowing when you think about it.

So then you start thinking about what are we actually.

And like people talked about us as a pharmacy or health and wellness destination.

Last time I was at a cvs, aside from my job, was to like save my marriage for Valentine's Day.

Right.

Or as a parent getting like pens and crayons for my kids, what we really are, as much as anything else is the local community store.

Like we're there for your last minute needs, for things you need immediately when you run out of sugar or cereal or anything else.

Health and wellness is a core part of our DNA and we're not walking away from it.

But our genome is more than just health and wellness.

It's like those everyday essentials that just make life easier and more possible.

Right.

So I want to talk to you more about that.

But too I also want to get a sense of your background because we always like telling our audience like how people got to where they are and your background is really unique.

Talk about it.

So I joined CVS about three years ago.

Three years ago.

I was with Walmart for six years before that came to Walmart because Walmart acquired Jet.com, as part of a startup.

I was with Vitamin Shop before that.

So a long time in retail and CVS is like, was really attractive because the people and the mission and just the opportunity we have to really transform what we do.

Yeah.

So I'm curious, how does, how do, how does one compare the CVS experience to the Walmart experience?

What's the same, what's different?

I've never got to ask anybody that.

Walmart's an incredible retailer.

And like what I take away from those six years is, you may remember this, but in 2014, 2015, everyone was talking about Amazon and Target.

Yep.

And people had written Walmart off.

Yeah, they had and what Doug has done over the last like 6, 7, 8 years is mind blowing.

Like, we forget how much transformation there's been in that business.

We're like the early part of that journey.

Like, there's a lot to continue getting right at cvs.

But Walmart is this incredible example of like, don't write, don't write a retailer off.

Like they can come back and really surprise you.

Yeah.

Okay.

I want.

I'm still not done with my question about store.

I have more questions for you, Musab.

So you're doing this pilot where you're doing pretty much no front of store, just pharmacy.

And then you're going to continue to expand your pharmacies inside of Target stores.

You're going to continue to build full size CVS stores.

How do you think about the merchandising strategy for those new and future front of store locations?

And then will you still sell stuff in like, will there be things for sale, like impulse purchases for sale for the pharmacy?

Like, how much can you share with us about what we can expect for these new store formats?

All right, so let me take a step back.

So we have 9,000 locations around the country.

Right.

That's a lot of locations.

And even on the strip, we've got three CVS's.

Yes.

Been to them.

Yes.

So as you think about the CVS's within, let's say a 10 minute drive from your house.

Yes.

They serve really small trade areas.

And most of the time when you talk about mass retail or organized retail, you think about a single box concept across the country.

Country.

But the opportunity for us is to not think about one experience everywhere, but to think about what's the right experience for that particular location in that small trade area.

And that is so hard to do.

Like five years ago you couldn't do that.

The technology didn't exist.

But now the technology with AI and other things allows us to think about every single one of our stores as a sole proprietor, but with the efficiency of scale.

And so the small box formats, or health and wellness formats, or our healthcare delivery formats, they all have to kind of fit within the community and the locale that they're serving.

So we're gonna have full boxes without pharmacies, we're gonna have our standard CVS that most people think of as CVS and a pharmacy in a front store.

We're go standalone pharmacy locations where there might be a pharmacy desert and we don't really need retail there.

But it's all about finding the right consumer value proposition for the small space.

In which we serve.

So what kind of technology or processes or people do you need to invest in then to make all of those options possible?

This is what's so fun about my job.

So what we're embarked on now is really investing in machine learning to take the complexities out of our system and then add them back in.

So we have 190 million store SKU combinations.

We have 900 billion value SKU combinations across our fleet.

And so what we are trying to do is use technology to look at external data like who are the competitors, how customers are shopping, look at internal data, what people are buying, how frequently they're buying, and then automatically design planograms for that store that are really relevant, that take the human out of the process.

Okay, so you want.

Okay.

Interesting, interesting.

I didn't know that part.

All right, so you and I are speaking on stage.

We've already teased it today.

What do you.

In addition to what you've already shared, what else do you hope the audience takes away for those that can't watch?

Yeah, I think my number one takeaway is that similar to what we talked about is Walmart a couple years ago, people look at this channel, look at the challenges that are happening in the channel and immediately jump to a conclusion.

Our aperture at CVS is to compete in retail.

We know consumers don't think about channels, they think about retailers.

And the role we specifically play is to serve as a community destination for your everyday needs.

Okay.

Includes healthcare and beauty and the pharmacy experience for sure.

But it's a lot more than that.

And like that focus on our original value proposition.

We think back to like what CVS was when it first started, I think will continue to create meaningful need for us going forward.

So it's not.

So if I hear you right, it's not the convenience trip per se, it's more what whatever the local community needs from CVS that's driving the strategy here.

Yeah, I think convenience is a strong part of it.

It's probably a portion of it, right?

Portion of it, yeah.

And convenience is certainly becoming harder to compete in with at home delivery.

But if the club channel serves to like build your pantry and the box channel serves to build your basket and like e commerce Pure play allows you to rifle shot single items.

We are there for like immediate gratification and that.

Immediate gratification, interesting.

It might be like acute immediate need, like I'm sick and I need a nyquil right now.

It might be like I've run out of the cereal that I want and I Need it or run out of toilet paper.

And I need.

Might just be.

I only need a few things.

And this is so much easier and faster for somebody to come in and out of than a big box store.

So, Musab, is there an.

Is there a category that you feel like is kind of leading the trend?

Whether that's like, food, beauty, healthcare, like, of all the categories that you're expanding in or you're gonna adjust based on the geography, is there one that you feel like we're really gonna index higher in food?

Yeah.

So let me say, across the board, when I look at, like, our market share data, we're seeing really positive success across all categories.

Okay.

I think the place that we continue to have more opportunity to expand is really around consumables and general merchandise.

Okay.

So our health and beauty assortment tends to be pretty strong today.

We've gotten, I think, a little weaker historically in our general merchandise and consumables category.

And if you look at what the team has done on seasonal, like our Easter assortment right now, Halloween, Christmas, Valentine's Day, that assortment continues to get stronger and stronger and it keeps bringing people in.

So it's really.

It's all those categories that bring in customers outside of health and beauty that will continue to expand and get stronger over time.

Wow, that's really interesting, Musab.

You know, Ann and I always talk about, like, the five reasons stores exist, you know, and immediate gratification being one of those.

And it's oftentimes the most untalked about of the five dimensions, you know, and so that's really interesting to hear you say that you're thinking about cvs and the design of CVS to promote immediate gratification in the community is, you know.

We'Re joking about the dog.

The puppies.

Yeah.

But, like, what the puppies actually tell us is that people crave connection.

Yeah.

Now we won't have puppies in our stores, but, like, being able to interact with a colleague, being able to like that.

Do you want that on record?

Are you sure?

Yeah, yeah.

I'm pretty confident we won't have puppies in our store.

I might be wrong, but I'm pretty confident we won't have puppies in our store.

But, like, the human connection's super important.

That, like, moment to say, okay, I checked something off my like to do list between work and home is super important.

Yeah.

It's going to continue to be a really important part of retail.

Oh, my God.

I have so many questions for you on that.

But I'm going to have to save them for the stage.

All right, are there any trends or.

Let's get you out of here on this.

Are there any trends or technologies that you're particularly interested in learning more about here at Shoptalk?

Yeah, I mean, AI is certainly, like, overused as a term.

It kind of reminds me of the first dot com bubble right back in the 2000s.

That said, there's so many interesting applications.

So I was really energized by hearing Miriam talk about what she's doing at Arcade AI.

Like, she's using AI to completely reimagine how consumers shop at a much more individual level and like to do that.

There's supply chain, there's a customer interface, there's a pricing intelligence that goes behind it.

I think AI and technology is certainly going to make us more efficient, solves problems faster.

But it's really interesting as to, like, how it's going to change how we interact with the world.

And like that I think, is really exciting.

Yeah.

So that's what you're excited to learn about here.

All right, well, if you're watching this live and you got time to come check us out, we're going to be interviewing.

I'm going to be interviewing Musab here at, I think 4 20, 4, 25, something like that.

430 ish, give or take.

We'll be here until then.

Yeah.

And yeah.

So until next time.

And.

Whoa, wait.

Actually, thanks to Avalara for sponsoring all of our coverage at the show.

We wouldn't be able to do this without them.

They're still here.

1554.

And until next time.

And when we're back tomorrow, be careful out there.