Rite Aid has embarked on a game-changing metamorphosis, a boldly conceived and thus far brilliantly executed initiative that, if successful, will transform America’s No. 3 drug chain into a compelling health care retailer and an irresistible option for consumers who, until now, have regarded Walgreens or CVS as their primary drug store.


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Inside This Issue - Opinion

New direction puts Rite Aid back on track

February 13th, 2012
by David Pinto

Rite Aid has embarked on a game-changing metamorphosis, a boldly conceived and thus far brilliantly executed initiative that, if successful, will transform America’s No. 3 drug chain into a compelling health care retailer and an irresistible option for consumers who, until now, have regarded Walgreens or CVS as their primary drug store.

At the core of this new direction is an emphasis on health and wellness that, despite all the rhetoric, has until now been largely absent in the retail marketplace.

When the retailer’s fiscal year ends next month, some 300 Rite Aid drug stores will have been remodeled and refocused as “wellness stores," with an emphasis on consumer health that largely turns on an in-store “wellness ambassador” who works closely with the pharmacist and is specially trained to provide customers with information on over-the-counter medications, vitamins and supplements. To help them interact with customers and facilitate solutions, the wellness ambassadors have been furnished with iPads to help customers in making decisions based upon their individual symptoms and needs.

The wellness ambassador is the gatekeeper to a range of health care services that includes, but is not limited to, an extensive variety of immunizations — the number varies depending on state regulations but includes at least a dozen in most states — that is bigger than the range of immunizations offered by most of the company’s retail competitors.

Beyond this focus on immunizations, the wellness stores offer a range of health care programs, consultations and services revolving around the pharmacist that are designed to supplement or simplify many of the diagnostic services currently offered by immediate-care clinics. Indeed, the overall impression is more that of a health and wellness destination than a conventional chain drug store, though the wellness stores offer an extensive range of health, beauty, grocery and general merchandise products.

But Rite Aid’s new direction is not limited to the wellness store concept. In 2010 the retailer rolled out a new loyalty program that exceeds in the richness of the awards it offers anything thus far unveiled by a U.S. retailer. To date, the program, called wellness+, has been embraced by over 47 million Rite Aid customers, and it has succeeded in increasing both the frequency of shopping and the size of the shopper’s basket.

Perhaps more impressive, unlike most loyalty programs, wellness+ plays off the retailer’s pharmacy rather than the up-front mix, with the result that it has succeeded in expanding the drug chain’s prescription drug business.

There’s much more to Rite Aid’s metamorphosis-in-progress, far too much to detail here. Rather, the March 12 issue of Chain Drug Review will examine the drug chain’s various initiatives in considerable depth.

Perhaps most impressive in this metamorphosis is the team that John Standley, the retailer’s chief executive, has put in place to draw up and execute the new programs. Standley and his team have redefined the role they believe a drug store will play in the retail and health care environments going forward, determining that its primary function must be one of providing access to a range of health and wellness products and expert care at an affordable price in a convenient location.

Having so defined Rite Aid’s role, they have proceeded to create a drug store designed to implement that role. Thus far, though it’s early, consumers appear to have embraced the new concepts. The retailer plans to roll out the wellness store format as quickly as its finances allow.

The lesson amid all this is a simple one. Maybe Yogi Berra put it best with the aphorism, generally attributed to him, that it isn’t over ’til it’s over. Clearly that’s the case with Rite Aid.

Written off by most industry people as recently as two years ago, the drug chain is today opening stores that are the equal of any in the industry. The only question remaining is this one: Will the retailer be granted sufficient time and opportunity to roll out its wellness stores and related programs to a sufficiently large percentage of the U.S. population to influence the retailer’s fortunes on a meaningful scale?

The feeling here is that it will.

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